Toshiba

Toshiba Corporation is a Japanese multinational enterprise and the seventh-largest manufacturer of electrical and electronic products in the world. Founded in 1875, Toshiba today consists of 10 in-house companies covering a wide range of products, including bullet [Page 1584]trains and power stations as well as electronic consumer goods such as rice cookers, washing machines, and television sets. The company can draw on innovative ideas from more than 30 separate research and development (R&D) laboratories and 352 subsidiaries and affiliates globally. Unusual among large Japanese corporations, Toshiba has faced up to the challenge of globalization and has restructured and streamlined its organization, as well as having developed a shareholder value-oriented business philosophy.

Toshiba was founded in 1939 by the merger of Shibaura Seisaku-sho, which was a producer of electronic goods and which was founded in 1875, and Tokyo Denki, which was a consumer goods producer. Both companies were leaders in their respective fields. The new company was called Tokyo Shibaura Denki (Tokyo Shibaura Electric Co., Ltd.) and the name was not officially changed to Toshiba until 1978.

Since World War II, Toshiba has been part of the Mitsui keiretsu, which represents the typical Japanese conglomerate of affiliated companies. The company grew quickly during the postwar period. This growth was fueled by success in the domestic market as well as through the acquisition of heavy industries firms in Japan. The company's business fields are broad. Toshiba has developed in various directions, such as into the semiconductor industry, medical systems, power systems, and later into mobile communications and the digital media industry. The brand name Toshiba, however, is most strongly related to the company's electrical consumer products. The company's breakthrough as a manufacturer of consumer goods came in 1955, when it launched the first electronic rice cooker on the Japanese market. Within seven years, half of Japanese households owned one of them, a success which laid the foundation of Toshiba's ongoing role as an innovator and leader in consumer products.

Like many other Japanese multinational corporations, Toshiba's postwar success was guided and supported by the Japanese government, typical Japanese management practices, and a highly motivated workforce. In contrast to other Japanese manufacturers, Toshiba seemed reluctant to develop overseas [Page 1585]production. For many years, the company not only highly concentrated on the Japanese market but also strongly promoted a Japanese relationship-oriented management style inside the corporation.

Toshiba has grown to be the seventh-largest manufacturer of electrical and electronic products in the world. Toshiba's corporate headquarters (building in center) are located in Hamamatsucho, Tokyo.

This focus, however, did not prove to be very successful for the company, and in the 1990s Toshiba was not only confronted with the Japanese recession but also with increasing global competition. The strong appreciation of the Japanese yen put the company, with its many domestic manufacturing sites, under further stress.

In 1996, Taizo Nishimuro became president of Toshiba. He was an unusual choice. Nishimuro was not only the first president who did not have an engineering background, but he had also spent 10 years abroad and spoke fluent English. His appointment symbolized a new era and an increasing readiness to meet the new challenges the company faced. Nishimuro introduced numerous reforms, such as liquidating Toshiba's unprofitable businesses and cutting the main business groups from 15 to eight. He also introduced profit-oriented evaluation systems and set ambitious goals for the company's return-on-equity and shareholder value.

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