Comparative Analysis Of Five Asian Pacific Multinational Corporations
The purpose of this report is to analyze the strategy, corporate organization, core capabilities and the role of the government of the five respective Asian Pacific Multinational Corporations (MNCs), namely, Mitsubishi, Toyota, Hitachi, Samsung and Hua Wei.
The first multinational corporation to be analyzed is Toyota Motor Corporation (TMC). Toyota produces automobiles such as cars, buses, trucks, along with advanced robots and it is currently Asia’s biggest car manufacturer and second biggest producer. Toyota employs the “Kaizen” strategy, which is directly translated to continuous improvement, this is essentially a two part plan, as a philosophy, it incorporates a culture where employees from all levels of the organization, actively participates in the never ending improvement of the company, while as an active action plan, comprises of events and planning involving all levels of employees, to improve certain aspects within the company. This works naturally with its core capabilities, the Toyota Production System, also known as the Toyota Management System (TMS), which allows the firm to produce twice the amount, with half the duration and cost, and using only a fraction of inventory. TMS comprises of three aspects, Just-in-time product (JIT), total quality management (TQM) and policy management.
The concept of JIT revolves around making “what is required, when it is required and the amount required”, eliminating unnecessary waste and inconsistencies, which would result in an improved level of productivity. Toyota’s TQM, also known as six sigma, incorporated different variations of inspections into its front-line production cells, resulting in the hasty discovery of errors and corrections. Toyota’s policy management system is used to provide direction to the firm and help maintain its success over the years. One aspect of that success is based on this process known as “catch-ball”, where employees are provided with a platform to exchange ideas and have their solutions potentially approved and implemented by higher management. Toyota operates on a divisional corporate organization. It began a significant overhaul of its organizational structure to streamline its work processes.
The current structure encompasses the following characteristics, Global hierarchy, which decentralizes its decision making process by providing respective heads with more decision making powers, geographical divisions, which are currently divided into eight regions globally and reports to the headquarters in Japan, enabling Toyota to make improvements according to the region requirements and product based companies, which supports the firm’s development of different brands and products.
The Japanese government has always been a prevalent figure for the automobile industry, affecting the industry in both positive and negative aspects. In 1936, the Automobile Manufacturing Industries Act was introduced in an attempt to derail the monopoly held by American manufacturers by mass producing and supplying vehicles to the meet the needs of the Japan public, in which Toyota was one of the first two companies to operate under this law, this law led to the eventual suspension of Ford and General Motors production in Japan, setting the foundation for the rise of Toyota to prominence.
Mitsubishi Corporation (MC) is a Multinational Corporation that has operations in numerous industries such as, machinery, environmental businesses, infrastructure, day to day essentials, chemicals, metals and finance. MC recently established its new management strategy, known as “Midterm Corporate Strategy 2018”, it aims to evolve their business model from “investing to managing”, setting the tone for the subsequent three years. This strategy incorporates respective environmental factors that could potentially effect on its operations, such as a global economic slump and fluctuations in commodity markets, to name a few. Its core capabilities revolves around its eight business sections, which are split into the respective businesses, with their own individual core capabilities. For the global environment and infrastructure group, their core capabilities revolves around power generation, infrastructure, transportation and water. Meanwhile, its Industrial Finance and Logistics and development group operates in respective sectors such as real estate, investment funds, leasing, urban development and logistics. Its energy group focuses on natural gas, petroleum products and crude oil, to name a few.
Mitsubishi’s organizational structure is divided into two aspects, the head office and its own seven other groups of operations, as shown in the figure below. Each respective business have their individual CEO office which in turns reports directly to the President and CEO, and the executive committee of MC.
The Japanese government is currently a stakeholder of Mitsubishi Corporation, which the firm in turn pays taxes for returned services by the government, by allowing the organization to partake in national based projects and economic associations, along with events in other sectors.
Hitachi Corporation is a Japanese multinational conglomerate that operates in eleven diverse sectors such as Financial Services, Digital Media and Consumer products, Automotive systems, Highly functional materials and components, Construction machinery, Healthcare Electronic systems and Equipment, Electronic systems and Equipment, Infrastructure, Transportation, Power systems, Information and Telecommunication systems. Hitachi’s strategy aims to promote collective inventions and profits, by focusing rigorously on a market-based approach and profit generation as the main goal, to establish that generates a high and stable flow of income by using important initiatives such as the implementation of the FIV (Future Inspiration Value) as its fundamental for their management.
In terms of Hitachi’s corporate organization, its President, along with the assistance of the Senior Executive Committee and the Group Strategy Committee, essentially oversees all eleven of the company’s subsidiaries, in which the president would report directly to the Chairman and the board of directors. With the aid of the local government, Hitachi formed an alliance with its local competitors, known as the “Very Large Scale Integration (VSLI) Projection”, which helped the organization remain gain a competitive advantage over its overseas competitors.
Huawei is a Chinese based Multinational Corporation that specializes in telecommunication networks, Information technology, cloud services and smart devices. Its corporate strategy revolves around four sustainability-based movements, in attempts to promote economical, societal and environmental development. Its strategies are Bridging the Digital Divide, Supporting Stable and Secure network Operations, Promoting Environmental Protection and Building a Healthy Ecosystem. The main concept behind each movement is to provide all users with communication across the globe, provide access to stable network and communications specifically during critical and essential moments (E. g. : Natural Disasters), incorporating environmentally friendly components into their devices and providing employees with a planned and catered career paths in relation to their skills and abilities.
Huawei’s core competency revolves around its Research and Development team, due to the lower-cost of labor in China, this provided the organization with a competitive advantage over its competitors, both local and overseas. By planning to increase its annual R&D budget to between $15 and $20 billion, Huawei aims to be the leader in 5G technology, with more than 45% percent of its staff and employees allocated to the R&D team. Other core competencies includes its low prices for its products across the board, with its most recent Huawei Honor 8X Max being marketed for USD$299, in comparison to Apple’s XS Max which goes for USD$ 1449. Huawei’s corporate organization begins with its Board of Directors as the highest point of responsibility and decision making, which would be led and represented, along with its Executive Committee, by a rotating chairmen as the leader of the company. There is also a present Supervisory board which ensures that the responsibilities of the board are met and fulfilled, along with the financial and operation status of the company.
One major event that worked in favor for Huawei was in 1996, when the Chinese government introduced a policy to support its local telecommunication developers and ban foreign competitors from its market. Huawei was then promoted by its government and used in the Chinese military as the “champion” product, and managed to establish new R&D offices as a result.
Samsung Electronics is a multinational conglomerate that is the main subsidiary of the South Korean based giants, Samsung Group. The organization is current Asia’s largest electronics producer and is divided into four divisions, Semiconductors, Home appliances, Digital Media and Information & Communications. Samsung’s corporate strategy comprises of three aspects, effective reading of the market, scanning and utilizing opportunities and the development of new products. For starters, in terms of market readability, Samsung has been able to identify and replicate vital aspects and features in its main competitor’s smart phone designs, Apple. After realizing that its Asian consumers in particular, enjoyed a device that offered a writing feature, Samsung leaped at the opportunity and introduced a hybrid phone/tablet series which incorporated a stylus pen that could be used to write on its mobile devices. With more than 36 research and development centers globally, Samsung has invested more KRW 14. 84 trillion into securing core technological features for its future.
Samsung’s core competencies are its innovations, speed and synergy. The organization’s delegation ability, setting of ambitious goals, utilizing common systems, employee’s unwavering sense of commitment and sacrifice, sense of urgency and using foresight for investments and to seize any opportunity, results in the organization’s competence in nurturing a fast and reliable environment. Samsung’s synergy is orchestrated by its owner/leader and led by the organization’s Chief Strategy Officer (CSO), along with its diversity of electronics under its control, provides a huge amount of flexibility for the organization. This concept is further elevated and incorporated by its unified and main network for marketing, segregation of vital operations by region, along with the digital amalgamation of its products with their services, and horizontal categorizing and vertical incorporation.
Improving and updating its own current technologies significantly, has always been one of Samsung’s key aspects, although the organization does not produce revolutionary and new generation technology, Samsung’s innovation comes into play when the organization sets its long-term goals in the organization’s pursuit of information, promoting an everlasting system for the creation of knowledge. Through its use of reverse engineering, hiring foreign input and engineers and technology licensing, Samsung is able to attain its goals to obtain knowledge from external sources.
Samsung’s organizational structure is divided into three different areas, Consumer Electronics, Device Solutions and Information Technology (IT) and Mobile Communications. Other than its three main divisions, Samsung also has two other divisions, Corporate Management office and the Advanced Institute of Technology. Corporate Management office handles the logistical and overall management of the entire Samsung group while its Advanced Institute of Technology is its Research and Development hub, it is responsible for the development and innovation of new and advanced products.
In order to develop its economy rapidly, the South Korean government worked with companies like Samsung, to protect such organizations from external competition and provided assistance financially for the subsequent five year duration, due to a series of economic growth plans. With the support and focus by the South Korean government, the giant companies profited immensely from the policies and the country’s economic exports surged dramatically.
Conclusion & summary of lessons learned
To conclude, the aforementioned are the summarized analysis of the respective five Asian Pacific Multinational Corporations. Their strategies, core competencies, corporation organization and role of the government have all been analyzed in detail with the aforementioned results. Each aspect that were used to utilize the corporations, played a huge and significant role in the development and the extent of their success. Factors such as strategy and core competencies were major factors for the five corporations to gain competitive advantage over their competitors while internally, the organizational structure that is responsible for the daily run ins of the organization, is another factor to a company’s success. The role of governments also have a significant role in the extent of the corporation’s efforts and operational reach, as rules and policies can be created by governments to either assist or to inhibit their success.