Table of contents

Abstract Globalization is an inevitable phenomenon in human history. In about two decades, the process of globalizing, which has been bringing the world closer through the exchange of goods and products, information, knowledge and culture has expanded significantly. Regarding to this, the world has become flatten by virtue of the interconnectivity among markets all over the world. By dint of that, businessmen approach the world market instead of the domestic one. However, doing the business in the giant market requires a lot of efforts and changes to adapt to the new environment. Among of them, the decision to apply which types of organization that best fits the situation has raised out a question for many leaders of the international or multinational corporations. The organization structure of a business has its voice in the success of the company who has aim at penetrating the world market because organizational structure involves how a business organizes, categorizes and delegates tasks to achieve a specific goal. Moreover, a company's organizational structure determines how business decisions are made and implemented at all levels of the business and the modes in which it operates. In term of this, it is important for companies to find the organizational structure that best fits their need. Realizing that, we have desire for making research in the organization of an international company named Toshiba Corporation to clarify how a successful multinational corporation is constructed. Therefore, a lot of useful knowledge and valuable experience will be concluded.

PART I: TOSHIBA CORPORATION INTRODUCTION 1, Overview: Toshiba is considered the world leader and innovator in pioneering high technology. Additionally, the company has its fame as a diversified manufacturer and marketer of advanced electronic and electrical products spanning digital consumer products; electronic devices and components; power systems; industrial and social infrastructure systems; and home appliances. Toshiba Corporation was founded in 1875 and more than 130 years of operation, Toshiba has recorded numerous firsts and made many valuable contributions to technology and society. Today, Toshiba Corporation has become the world's 10th largest integrated manufacturer of electric and electronic, operating a global network of more than 490 companies, with 203,000 employees worldwide and annual sales of 6.4 trillion yen (US$77 billion). Beside being the giant in the word business, the company integrated in many CSR-related organization such as Business for Social Responsibility (BSR); Council for Better Corporate Citizenship (CBCC); Electronic Industry Citizenship Coalition (EICC) 2, Business Description Located in Japan, Toshiba Corporation expands it business in continents all over the world, condensed in Europe, Asia and Oceania.

Toshiba Corporation contributes a lot to the society and the economy of Japan while it has its role in creating jobs for more than 120,000 people. Also, the revenue of the company mostly comes from the home country, which accounts approximately a half in the total revenue of sales. No. of Employees by Region Sales by Region

(As of March 31, 2011) 3, History Toshiba's early history can be divided into two strands. In the first place, 1875 saw the establishment of Tanaka Seizo-sho (Tanaka Engineering Works), Japan's first manufacturer of telegraphic equipment. The founder of the company, Hisashige Tanaka (1799 - 1881), was well known for inventing mechanical dolls and a perpetual clock. Under the name Shibaura Seisaku-sho (Shibaura Engineering Works), his company became one of Japan's largest manufacturers of heavy electrical appliances. In 1890, Hakunetsu-sha & Co., Ltd. was established as Japan's first plant for electric incandescent lamps. Subsequent diversification saw the company evolve as a manufacturer of consumer products. In 1899, the company changed its name into Tokyo Denki (Tokyo Electric Co.).

In 1939, these two companies, leaders in their respective fields, merged to form an integrated electric equipment manufacturer, Tokyo Shibaura Denki (Tokyo Shibaura Electric Co., Ltd.). The company was soon well known as 'Toshiba,' which became its official name in 1978. 4, Products and services Toshiba, a world leader in high technology, is an integrated manufacturer of electrical and electronic products, which include: Digital Products: LCD TVs, High-definition recorders, Storage devices, Notebook PCs, and Servers Electronic Devices: NAND flash memory drives, System LSIs, Power devices, Optical semiconductors, and Liquid crystal display Social Infrastructure: Nuclear/Thermal/Hydroelectric power generation systems, Electric distribution/Industrial systems, Transportation/Social systems, Water supply/Sewerage & Environment systems, Broadcasting/Transmission network systems, Rader systems, IT solutions, Image diagnostic systems, etc. Home Appliances: Refrigerators, Washer-dryers, Kitchen appliances, Air-conditioners, and Lighting equipment

PART 2: TOSHIBA ORGANIZATIONAL STRUCTURE 1, Overview of Organizational structure: Organizational structure refers to the way companies arrange their departments. The larger a company is, the more complicated the organization is and the more management levels there are. How to organize the structure of a company depends on a number of elements and serves for a specific role. Among roles of organizational structure, there are efficiency, harnessing experience, decision-making, communication and span of control. Organizational structure helps the company make the most of various resources. Moreover, structure by functional departments such as: marketing, accounting, finance and so on can be used to take advantages of groups experience to accomplish tasks and projects. And, organizational structure in a company also enhances decisionmaking process, improves communication and span of control. To sum up, organizational structure is especially important for big companies like Toshiba which means a lot of factors must be taken into consideration. And it is more vital for this company when it goes internationally. There are two main dimensions of organizing a company: vertical differentiation and horizontal differentiation.

2, Toshiba architectural structure:

Board of Directors

Audit Committee Office

Audit committee

Compensation Committee

Nomination Committee

President& Chief Executive Officer

Corporate Audit Div. Strategic Planning & Communication Groups Corporate representatives: America, Europe, Asia, China Corporate Strategic Planning Div Corporate Communications Office

Innovation Div

Information& Security Group

Legal Affairs Group

Export control Gr.

HR group

Finance & Accounting Group

Procurement & Logistics Gr.

Productivity & Environment Group

Technology& Intellectual Properties Gr.

Marketing Group

Quality Div

New lighting system group Smart Community Gr Materials & Devices Div.

CSR Div.

From that management chart, we can see that Toshiba structure is centralization. Centralization is the structure that relies on one individual to make decisions and provide directions for the company. It often has several individuals taking charge of making business decisions and running the business. Primary decision makers or executives are often housed in a central headquarters with officers and meeting areas for leaders to discuss business. On the one hand, this way of organizing Toshiba has many advantages, namely focused vision, fast execution, reduced conflict, control and accountability. A more centralized structure keeps all levels of a centralized organization focused on one vision or purpose. Furthermore, with fewer people involved in decision-making process, decisions are made more quickly and efficiently by a group of leaders. Whats more, conflicts may be reduced because only a small group makes important decisions, less dissent occurs among lower to mid-level employees. And also, such a group will retain more control over companys operation and development. Concerning this, Toshiba has to adjust its control system in accordance with the management structure. I will analyze a bit about controlling. Controlling is among the most basic and important managerial functions. Its importance is due to its advantages of checking errors and taking the corrective action so that deviation from standards are minimized and planned goals of organizations can be achieved in desired manner. As a result, the management of any organization must establish and develop its control systems tailored to its organizations targets and resources. Control systems which consist of formal, target-setting, monitoring, evaluation and feedback systems will provide managers with information to determine if strategy and structure are working effectively and efficiently. A good control system should be flexible so that managers can respond as needed. Also, it must provide accurate information about the organization. Last but not least, it has to provide information in a timely manner. Toshiba has expanded the scope of personal control to corporate governance policy so that this expansion can cater for Toshibas global targets. Specifically, Toshibas corporate governance policy aims to enhance management efficiency and transparency.

The board of directors consists of 13 members, among whom six are non-executive directors. The non-executive directors include three outside directors, the chairman, and two full-time Audit Committee members. Each committee has a majority of outside directors and the Nomination and Compensation Committees are both chaired by outside directors. Notification has been filed regarding all outside directors as being independent directors stipulated in the Securities Listing Regulations of the Tokyo Stock Exchange. Pursuant to the Companies Act of Japan, the Nomination Committee is responsible for making proposals on the appointment and dismissal of directors. At Toshiba, the Nomination Committee is endowed with greater authority to make recommendations on the appointment and dismissal of the President and members of the committees. The outside directors receive prior explanations on the matters to be resolved at board meetings from the staff in charge. They also attend the monthly liaison conferences of executive officers in order to oversee Toshiba's management. The personnel transfers of the staff members of the office are determined by prior consultation with the Audit Committee. The Corporate Audit Division, which is in charge of internal audits, consults with the Audit Committee in advance to formulate annual auditing policies and plans. The Corporate Audit Division also participates in discussions on the audited divisions and shares audit information through semi-monthly liaison meetings with the Audit Committee. Along with these activities, the Audit Committee normally draws on field surveys conducted by the Corporate Audit Division for detailed information.

Though the Audit Committee obtains reports on the results of audits conducted by the Corporate Audit Division, it also conducts its own audits if deemed necessary. What is more, Toshiba also provides opportunities for management and employees to exchange opinions directly with each other. Its top executives will different ways of dialogue with employees, customers and others. For example, Top Executive Innovation Visits which was held firstly in 2005 is the event in which top executives tour production sites and actively exchange views with employees in various activities. Or Toshiba find ways to collect opinions and requests of employees through forums and help its staff to resolve any grievances by providing counseling services. Returning to dialogue with customers, at Toshiba all those concerned including top executives have access to information on customers complaints, opinions and requests about products and services through daily sales and repair services; via telephone or the internet with the aim of improving the quality of products as well as repair services. Besides, Toshiba also apply the bureaucratic control and output control in its management structure focusing on centralization. In terms of bureaucratic control, Toshiba group has created an organization for the internal control reporting system and assessed the effectiveness of internal controls over financial reporting. The Board of Directors will assume the responsibility of determining the basic management policy, approving the mid-term business plan and annual budgets prepared by the executive officers. Thereby, the executive officers will follow up annual budget implementation and appropriately evaluate performance evaluation by means of meeting and the performance evaluation committee. In view of the introduction of the internal control reporting system in accordance with the Financial Instruments and Exchange Act of Japan (J-SOX) from the fiscal year ended March 2009 onward, Toshiba has established an organization at the corporate level to promote the assessment of the effectiveness of internal control system over financial reporting; and each in-house company and group company both inside and outside Japan has put in place an organizational structure in response to J-SOX and made the assessment accordingly. Based on these assessments, Toshiba will endeavor to improve reliability of Toshiba Groups financial reporting. Together with such goals as expanding the growth of its core business and establishing new sources of profit, Toshiba is also aiming to become an even stronger global contender. In order to achieve such ambitious goals, Toshiba has brought out many measures so that they can transform Toshiba Group into a top-level diversified electric and electronics manufacturer with a strong

global competitive power. As a consequence, this requires a very careful and concrete output control which can be in charge of setting goals for sub-units and expressing these goals into such indexes as profitability, productivity, growth and so on. The Board of Directors delegates authority and responsibilities to Executive Officers in an appropriate manner and Executive Officers clarify the authority and responsibilities of the Executive Officers and employees in accordance with the rules concerning responsibilities of division and the rules concerning managerial duties. Executive Officers set concrete targets and roles of organizations and employees. Then, Executive Officers make decisions on business operations based on appropriate procedures in accordance with the Board of Directors rules, the Corporate Decision Making Rule, the In-house Company Decision Making Rule and other rules. If one individual or group has excellent performance, rewards will be available.

Part 3: TOSHIBA STRUCTURAL CHANGES 1, Definition of structural changes Restructuring generally refers to the reorganization of corporate operations to achieve higher levels of operating efficiency. This process involves the elimination of noncore businesses and business processes, the consolidation of related operations and business functions and, to a great extent, reengineering of existing processes. A company reengineers its operations first by viewing its markets and evaluating its strengths with regard to those markets. After that, it will determine how it would operate under this situation The process of reengineering lies in establishing a detailed strategy to transform the operation as it exists today into the ideal operation it has defined before. Equally important, it is necessary to perform the process carefully to guarantee that projects bearing the greatest benefit are pursued first, and that each project will have a minimum adverse or negative effect on the existing operation and the transformation strategy 2, Toshiba structural changes 2.1.From centralization to decentralization Phase 1: 1980s to 1990s The first change in the organization of Toshiba Corporation took place in the 1980s. As a matter of fact, Japan suffered from an economic recession which rooted from 1960s. The economic recession had strong impact on the health of all the businesses and corporation located in Japan. Among of them was Toshiba Corporation. During this time, the pre-tax profits of Toshiba Corporation slid from $36 million to $13 million. It was time for the leaders of the company to decide a change. In April of 1984, Toshiba reorganized the production, marketing and research and development sections, incorporating them into one centralized location. In October, the company added a new Information and Communication Systems Laboratory in its organization. The Laboratory was functioned to develop and integrate office automation products. By virtue of the efforts of the company, in 1984 the sales of standard consumer products such as VCRs, compact disc players,

televisions and personal cassette recorders began to grow. In 1986, Toshibas semiconductor facilities experienced a 55% increase as well as burgeoning domestic demand. For the first time in its history, Toshiba surpassed its closest competitor, Hitachi, Ltd to become the second largest semiconductor manufacture in the world. Moreover, Toshiba was quick to capitalize on new markets as well, which resulted in the Toshibas winning the global race to develop the first onemegabyte DRAM memory chip. By 1987, the company was producing almost half of the worlds one megabyte chips. Phase 2: 1990s to 2000 In the 1990s, due to the process of globalizing, Toshiba Corporation faced with an ever-increasing completive worldwide market. While the technology field and consumer products are such a fertile land, a lot of corporation entered this potential market. During this time, two of the biggest corporations over the world, IBM and Apple penetrated Japan, which IBMs introducing the first PC-compatible laptop computer, the TJ3100 and met with great success. As a result, Toshiba was losing market share in the notebook market to its rivals. From 1990 to 1994, the electronics giants profits declined over 90% to 12 billion, their lowest level in well over a decade. The market share of the company continually deduced from 30 percent of the market in 1996 to 20 percent in early 1998. On January 30, 1998, Toshiba President announced his intention to reposition the company as a more "agile" player in the global market. This plan was expected to allow the company retaining its statue as the winner into the 21st century. Toshiba's plans aimed at improving productivity and efficiency in the semiconductor market, including such internal efforts as simplified production processes as well as taking advantage of cooperative efforts with other companies in areas such as research and development. In this project of reorganization, flexibility was considered the key concept, regarding to meeting customer needs and operating the company. Another important goal was decentralization, including the possible divestiture of Toshiba business units to increase their autonomy and improve efficiency. At Toshiba headquarters, corporate activity was streamlined to facilitate decision making, reduce costs, and increase competitiveness. The management structure was under review, and the company evaluated which businesses should be the focus of Toshiba development efforts. Additionally, top management decision making was completely separated from operational management. And the board making top-management decisions was reduced from 33 members to 12.

These changes made Toshiba corporation the success story. Chart : Top chip-maker 2000 (by Dataquest)
200 199 0 1 9 1 % increase 11.0%

Supplier

2000 sales $29.750 billion $11.214 billion $11.081 billion $10.800 billion $9.100 billion $8,000 billion $7.948 billion $7.282 billion $6.887 billion $6.715 billion

1999 sales

2000 share

Intel

$26.806 billion

13.4%

Toshiba

47.2%

$7.618 billion

5.0%

NEC

20.3%

$9.210 billion

5.0%

Samsung

51.6%

$7.125 billion

4.9%

TI

27.8%

$7.120 billion

4.1%

Motorola

25.1%

$6.394 billion

3.6%

STMicro

56.5%

$5.077 billion

3.6%

Hitachi

31.1%

$5.554 billion

3.3%

11

Hyundai

42.6%

$4.830 billion

3.1%

10

Infineon

28.6%

$5.223 billion

3.0%

Dataquest's initial 2000 market report implied that Toshiba Corp. Overtook NEC Corp. as the world's No. 2 chip supplier in 2000. For most of the 1990s, NEC had positioned the world's second-ranked semiconductor company behind Intel Corp., but Toshiba's strong 47.2% growth in chip sales pushed it just slightly ahead of its Japanese rival. Toshiba's chip sales reached $11.2 billion in 2000 from $7.6 billion, estimated the San Jose-based research firm. Toshiba was ranked No. 3 in 1999. NEC's semiconductor sales grew 20.3% to $11.1 billion in 2000 in comparison with $9.2 billion in 1999.
2.2.

In-house companies

Business domains of Toshiba are digital products, electronic Devices and components, Infrastructure systems, and Home appliance and others. Based on those business domains, Toshiba has established six in-house companies to produce these goods. They are divided into 3 groups, including digital products group(Digital products and services company ; Network and solution center), Electronic devices and components group( Semiconductor and ODD division), Infrastructure system group( Power systems company; social structure system company) The main purpose of each company is to produce the goods and do R&D. For example semiconductor and storage products company focus on main products divisions like: Discrete semiconductor division, Analog & imaging TC division, Logic LSI division, Storage products division, and last is center for semiconductor Research and development. The in-house companies follow decentralization strategy:

As you can see from the chart, all decisions are made by presidents in each in-house company. I want to focus on some reorganizations of in-house companies of Toshiba ad the impacts of changes Change 1: The new reorganization recognizes subsequent changes in the business environment and engineers a strategic restructuring of three key in-house companies into five other companies, three of them new. The in-house company system Toshiba launched in April 1999 reorganized business units and gave them the managerial autonomy and resources required to promote optimized business strategies, including M&A. Change 2: Toshiba will streamline its corporate decision making by ending the activities of the strategic staff meeting, which has supported and followed-up on decisions by the corporate management meeting. Decision making in such areas as establishing subsidiaries will be devolved to the inhouse companies, as a means to extend management autonomy and time-effective decisions. Through these measures, Toshiba aims to cultivate enhanced flexibility in the in-house company management and to accelerate decision-making speed. Change 3: The 'Mobile Communications Company,' another new in-house company, concentrates resources devoted to the rapidly growing mobile equipment business, including next-generation mobile

phones and PDA. The new company is centered on the Mobile Communications & Computing Division, previously part of the Digital Media Network Company. A simple management structure promotes management speed and flexibility, which is reinforced by access to the management resources required for the highly competitive mobile business. A simple management structure promotes management speed and flexibility, which is reinforced by access to the management resources required for the highly competitive mobile business. 2.2.1. Overview of each in-house company. a) Digital Products & Services Company The visual products business is the source of trend-setting products noted for innovative features and technologies such as glasses-free 3D and peak shift control. Integration of these businesses to capitalize on their strengths in design, development, production and sales & marketing, allows the Digital Products & Services Company to create new value for the world. Under the REGZA brand, Toshiba offers a broad range of products of 3D and other digital content, including LCD TVs and Blu-ray Disc recorders ... . To make the Toshiba brand synonymous with the best and to increase market share in rapidly growing emerging economies, we emphasize product planning, marketing and sales attuned to evolving market needs. b) Network & Solution Control Center The Network & Solution Control Center focuses on the Internet services business and solutions business. In the Internet services business, the Center offers gateway technology allowing use of corporate mission-critical systems from mobile terminals, cloud-based firmware download services for digital products, and cloud-based text-to-speech services with natural voices. In the solutions business, the Center provides industry-specific solutions and addresses the needs of such customers as educational institutions, hospitals and retailers by integrating servers, business phones, unified communication systems, professional-use cameras, IP networks, etc. c) Semiconductor & Storage Products Company Optical Disk Drive Division

In semiconductors the emphasis is on four key business fields: memories, logic LSIs, analog and imaging ICs, and discrete products. Toshiba invented NAND Flash memory and leads the industry with its cutting-edge technology, supporting advances in digital products. d) Power Systems Company The Power Systems Companys capabilities cover the full spectrum of power generation systems, including high-efficiency thermal and hydro power generation, renewable such as geothermal and wind power, and nuclear power, all essential for realizing the stable electricity supply essential for powering our modern world. We are also channeling resources into R&D of promising technologies, including carbon capture and storage (CCS) and home-use fuel cells with the potential to slash CO emissions. Power turbine e) The social infrastructure systems company The Social Infrastructure Systems Company provides essential equipment, systems and services for the construction of core social infrastructure, including electricity, water, gas and transportation systems. The company is active in five fields: Transmission & Distribution Systems, including power transmission and distribution systems and solar photovoltaic systems; Railway & Automotive Systems; Automation Products & Facility Solutions...... 2.2.2 How Toshiba distribution work Toshiba has functional structure (including marketing, information security groups, legal affair group...) used for every products. Product lines are produced at different in-house companies. And Toshiba distributes those products through different area lines, which are controlled by region headquarters. In deatail, Toshiba connects with customers through its worldwide website. The distribution network is divided into different regions, which are controlled by each regions headquarter. Each country in those regions will have 1 or 2 websites separately. Clicking on each country, we will see different product lines, each is product produced at each inhouse company or division (like lighting division). Power systems belong to a product line

manufactured by power systemcompany, or semiconductor products are produced at semiconductor and storage products company.

Conclusion Toshiba is considered the world leader and innovator in pioneering high technology, which has its fame as a diversified manufacturer and marketer of advanced electronic and electrical products spanning digital consumer products; electronic devices and components; power systems; industrial and social infrastructure systems; and home appliances. Toshiba Corporation was founded in 1875 and has developed through 2 strands. Organizational structure refers to the way companies arrange their departments, and Toshiba has applied both vertical differentiation and horizontal differentiation. Toshiba has reorganized to change from centralization to decentralization in phase 1 (1980s-1990s) and phase 2 (1990s to 2000), which takes place in both in-house companies system and the head quarter system. The first change in the organization of Toshiba Corporation took place in the 1980s. As a matter of fact, Japan suffered from an economic recession which rooted from 1960s. Corporation slid from $36 million to $13 million. It was time for the leaders of the company to decide a change. In April of 1984, Toshiba reorganized the production, marketing and research and development sections, incorporating them into one centralized location. In October, the company added a new Information and Communication Systems Laboratory in its organization. Phase 2: 1990s to 2000, on January 30, 1998, Toshiba President announced his

intention to reposition the company as a more "agile" player in the global market. Overall, late movers can learn lessons from Toshiba corporation, there have been failures or successes.