Always a leader within Japan Inc., Sony announced plans on March 9 to trim a larger proportion of its workforce and production capacity than most of the industrial-electronics firms. Sony says it will delist three subsidiaries, including Sony Music Entertainment, and make them wholly owned companies so they can develop greater synergies with other companies in the group. Some analysts hope Sony's revamp will have a salutory effect on other Japanese corporations. For example, the Big Five's plans to shrink their boards of directors follow a similar move by Sony in 1997. Inside Japan Inc., a social contract that dates back to the 19th century binds workers and companies for life.
Managers regard firing someone as worse than committing a crime.
Selling a business implies failure. Tsuneo Iyobe, head of personnel at Mitsubishi Corp., a trading house that's loosely linked to Mitsubishi Electric, says he hasn't even set a target for staff reductions for fear of demoralizing people. The partial sale was applauded, but some analysts said getting out of the business altogether would have been better. To a certain extent, Toshiba is manipulating investors. Toshiba and Hitachi have both reorganized their businesses into groups with greater autonomy and bottom-line responsibility.