How Has Strategy At Hitachi Affected Its Structure Commerce Essay

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Through the history, classical and neoclassical theorists viewed conflict as something to be avoided because it interfered with equilibrium. Contingency theorists view conflict as inescapable, but manageable. Chandler, for instance, studied 4 large the U.S. corporations and proposed that an organization would naturally evolve to meet the needs of its strategy, that form follows function. Implicit in Chandler's ideas was that organizations would act in a rational, sequential, and linear manner to adapt to changes in the environment. [1] Effectiveness was a function of management's ability to adapt to environmental changes.

Experts also have studied how organizations adjusted to fit their environment. In highly volatile industries, they noted the importance of giving managers at all levels the authority to make decisions over their domain. Managers would be free to make decisions contingent on the current situation. For this, Hitachi's corporate credo is to contribute to society through the development of superior, original technology and products. With this in mind, Hitachi seeks to maintain and develop trust relationships with its stakeholders, including shareholders and other investors, customers, business partners, employees and regional communities. It will fulfill its responsibility to stakeholders by disclosing information in a fair and highly transparent manner, and by conducting various communication activities. [2]

Hitachi plays a crucial role in social innovation business field, including information and telecommunication, social infrastructure systems business, which support the social innovation business along with motors, inverters and power semiconductors. During the 2 past years, the conversions of Hitachi's five largest companies into wholly owned subsidiaries will foster close ties, and facilitate the intergration of business strategy and structures, leading to improved competitiveness and a stable earnings base. Regarding to the business management structure, Hitachi will likely to be formed in-house company that would facilitate business execution based on an intergrated strategy centered on its 5 main companies: Hitachi's Information & Telecommunication Systems Group, Hitachi Information Systems, Hitachi Software Engineering, Hitachi Systems & Services, and Hitachi Electronics Services Co., Ltd., which is already a wholly owned Hitachi subsidiary.


1/ Survey Software Solutions Inc.,. Organizational Theory and Behavior. [online] (Last updated on 30th June 2010) Available at: <> [Accessed on 11th September 2010]

2/ Hitachi. Disclosure Policy. [online] (Last updated on 16th August 2009) Available at: <> [Accessed on 11th September 2010]



How can Hitahi use job characteristics model?


> As a matter of fact, Hitachi considers its employees as its most valuable assets. Their talent, know-how, and expertise make it possible for Hitachi manufacture high-quality products that meet certified international standards. This relates to the change is that Hitachi's employees are required to learn how to use its new system and procedures in a very short period of time, which has caused increased stress, apart from the fear that this change can bring about understaffing in the near future. [1] People are really trying hard to fit into the new system and rules, but their expectations are not always matched.

In 2002, Hitachi identified 4 keys areas for harnessing the synergy of its technologies, knowledge, people and other resouces: - IT-based quality lifestyle solutions, - Sustainable environmental solutions, - Advanced health-care solutions and, - Intelligent management solutions.

Also, physical and mental health is vital for balancing professional and personal life. Hitachi improved and expanded its childcare and nursing care support systems while offering family leave and reduced working hour programs to create more attractive workplace environments. They improve processes to prevent traditionally long working hours and deploy initiatives to promote physical and mental health, as well as provide training to enhance workplace communications, too.

Those dimensions contribute to the meaningfulness of the work, in other words, the higher the task variety, identity, and significance, the more meaningful the work is to the employee. The extent of discretion and freedom employees has over their tasks and the higher this is, the more the employees feel responsible for the outcome of their work. As a consequence of providing positive psychological states, Hitachi supposed that positive outcomes would occur for the individual and the organization: high motivation, high-quality performance, high job satisfaction, low absenteeism, and low labour turnover. The model is used to assess the motivational potential of employees' jobs and thereby suggest which of the jobs could be redesigned. [2]


1/ Arrod Amazon Co., Ltd. Hackman and Oldham's Theory on Job Characteristics Model. [online] (Last updated on 30th July 2009) Available at: <> [Accessed on 11th September 2010]

2/ JRank Corp.,. Job Characteristics Model. [online] (Last updated on 15th April 2009) Available at: <> [Accessed on 11th September 2010]




Which environmental forces affected Hitachi's decision to change its strategy and structure?

> In Japanese tradition, Hitachi's structure is formal and its organization charts show the lines of authority for each business unit of the corporate body. When Hitachi takes over another corporation, its management is usually more formal than that of the existing company.

Hitachi's go-it-alone strategy and strategy of creating joint ventures had been formed. For the changes during this century of the society, globalization, new trends of customer, advanced development of information technology and other afftected issues, Hitachi also has its strategy and structure changed.

These days, many companies are facing with declining product demand beyond their control. For example, a study of the strategies of over 95 companies that confronted declining markets suggests that companies can often be very successful if they analyze all the characteristics that shape competition in the end game and act in accordance with their own needs by changing their strategies and structures. Strategic alternatives for declining business include leadership, niche, harvest, and quick divestment. [1]

Seriously considering this, Hitachi changes. Hitachi's profitability depends in part on the structure of its strategy in which it competes. One of the significant aspects of Hitachi's strategy and structure change due to the residence in 6 basic forces of competing: the intensity of rivalry among existing competitors; the threat of new entrants; the threat of substitute products or services; the bargaining power of suppliers; and the bargaining power of buyers; the advanced development of IT and its services suppliers. [2] Though its strategy and structure are relatively stable, but Hitachi must transform by changes in buyer needs, regulation, or technology, etc. Based on this, Hitachi has shaped itself strategy and structure compatible with the changing society rather than passively react to them.


1/ Institute for Strategy and Competitiveness. Industry Structure and Structural Change. [online] (Last updated on 13th January 2010) Available at: <> [Accessed on 11th September 2010]

2/ Institute for Strategy and Competitiveness. End-Game Strategies for Declining Industries. [online] (Last updated on 12th October 2008) Available at: < > [Accessed on 11th September 2010]



Was the use of the decision-making model appropriate in deciding how to change Hitachi?

> We all actually need to make decisions from time to time. Given limited time in formulating policies and addressing public problems, public administrators must enjoy a certain degree of discretion in planning, revising and implementing public policies while still keeping those brilliant judgements. In other point, we must engage in decision-making. Over the years, many scholars tried to devise decision-making models to account for the policy making process. [1] But what exactly is it in the case of Hitachi's change model?

During the past and current global financial crisis with loss in market penetration, Hitachi seems to make its survival change plan by seeking more alliances and acquisitions, as well as introducing a new governing system to help accelerate decision-making across the sprawling conglomerate.

A high cost structure, bureaucratic management style and lack of focus are thought to be root causes behind Hitachi cumulatively losing 1.1 trillion yen ($11.7 billion) over the past 10 years. During the same period rival General Electric has generated a total profit of $165 billion. Due to this, Hitachi is aiming to focus more of its resources on railway, power and other infrastructure-related businesses likely to benefit from increased government spending on such projects and where it feels it has a technological edge.

Nakanishi, who has served as head of Hitachi's North American and European operations, said he would accelerate the forming of alliances and look to make acquisitions to help drive growth overseas, where it gets just 40% of its sales, a relatively low proportion for a major Japanese technology exporter. [2]

Hitachi's 40 major business units are now ranked "excellent," "average," "needs monitoring" or "needs counter-measures" based on their financial and operational strength. The higher the rank, the more discretion Hitachi must have in making investments or other important decisions.


1/ Wikipedia Encyclopedia. Decision Making Models. [online] (Last updated on 13th January 2010) Available at: < > [Accessed on 11th September 2010]

2/ International Business Times. Hitachi eyes M&A for growth, rejigs governance. [online] (Last updated on 06th April 2010) Available at: < > [Accessed on 11th September 2010]



What process did Hitachi use to come up with its changes in strategies, at what level were these strategies implemented, and what are Hitachi's strategies?

> Hitachi's new motto for the 21st century "Inspire the Next" created to be described its new missions of transforming society to richer lives and a better one by providing high-quality and advanced products, systems, and services with a new level of value and potential based on the latest advances in technology, especially knowledge and information technology.

Hitachi confirmed itself to change by identifying the real needs of today society and customers' trends and setting to achieve goals that surpass those needs despite challenges or obstacles. Hitachi has developed and applied its new technology without being bound by traditional thinking and focused efforts on the fields of communications and services whilst still being willing to venture into new business areas. For demonstration that being a good corporate citizen, Hitachi's new strategy and structure in the new century are the harmonious co-existence of environmental preservation and economic growth.

The value that Hitachi has intended to cherish and build upon is that of a company trusted by customers and society, a company fully responsible for its actions in successes or failures. Hitachi's delivery the wide range of complex systems using its knowledge and technologies to meet specific needs of the customers while keeping goal still thoroughful via offering systems solutions that will work over the long term for society as a whole. [1]

Hitachi intends to be the catalyst for the changing society. In another hand, ss society changes, so will Hitachi.