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In April 1997, a system of internal division companies was introduced as a new management organizational structure. As technology progressed with greater speed, integration among different product groups increased and they themselves became more complex, and business globalized, we reorganized Business Divisions into “business clusters” in order to carry forth business activities through collaboration under a single management focus. The aim of the system was thus the rapid implementation of strategic business management. Four companies were launched as distinct internal divisions: the AVC Company, Home Appliances & Housing Electronics Company, Air Conditioners Company, and Motors Company.
The division companies took on the following four fundamentals of management.
(1) The positioning of each division company is to be equal to that of current division companies, and the structure and management are to be the same as independent joint-stock companies
(2) The company is to function under its own autonomous responsibility and the examination and reporting of business planning and settlement of accounts are to be conducted within the internal division company
(3) Management of each division company is to be delegated to its president, who is to manage optimally according to his or her own discretion
(4) The basics of the internal organization of a division company are that of a divisional system
This organizational reform meant putting in place a structure in which Business Divisions were largely defined as “internal division companies,” “division companies,” and “affiliated companies.” Panasonic’s “independent and responsible management system,” the company’s very core, was thus restarted as “cluster management.”
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