RESTRUCTURING AT MAYEKAWA

Abhay Kumar 12810001Ankit Katiyar 12810010Dharm Jaiswal 12810029Shailendra Shankar Gautam 12810075Sharad Srivastava 12810076

Background

In past, Japanese manufacturers emphasized on either: Expand market share Increase sales volume

Strategies adopted are price leadership, introducing new products and diversifications. It caused an increase in investment. The result was inflated break even point and lesser profits.

In order to compensate for low profits, they have engaged in Kaizan activities. However it demands two conditions to be fulfilled: High and continuous growth of the economy Existence of a mass market

Background (Contd…)

After recent economic slowdown, they could not get either of the conditions favorable.

To reduce the Break Even point (BEP), companied has resorted to reduction of workforce (particularly white collar workers and managers). They have also cut down all investment.

It created distrust and company loses excellent people. This causes a negative effect on competitiveness of the firm and situation even gets worse. Therefore there is further need to reduce BEP.

Recently several companies have adopted a new approach. They not only have profits but are also innovative and customer focused. – 21C Company

Mayekawa – An Introduction

The family-owned company, formed in 1924.

Employs 3,300 people worldwide.

Industrial refrigeration equipment: 50% of the global market.

Reputation for creating innovative niches in other markets. When a customer asked Mayekawa to help automate the deboning of chickens, then done manually by hundreds of workers, the company spent 10 years developing a robot that pulls meat off bones. The result captured an entirely new market.

Mayekawa has become a strong world-wide business-to-business brand in fields as diverse as biotechnology, electrical engineering and thermal technologies.“

Mayekawa – Business Domains

Evolution of Organization Structure

Uniform Product Known Market

Organization Design and Changing Environment

Organization Design and Changing Environment

High Tech, Complex Tech,

uncertain Dynamic

Environment

Low Tech, Simple Tech, Uncertain

Stable Environment

Informal

Vertical

Matrix

Fractal

???

Challenge

Challenge

Challenge

Challenge

Challenge

Challenge

Diverse Product unknown Market

Mayekawa – History

1924: Kisaku Maekawa was Japanese industrialist and philanthropist who founded Mayekawa & Co. in Tokyo, Japan. Started ice making and cold storage business. Commenced production of industrial vertical low speed reciprocating refrigeration compressors.

1937: Established Mayekawa Manufacturing Co., Ltd. in Tokyo. Established “MYCOM” for brand.

1958: Commenced production of high single stage speed multi-cylinder reciprocating compressors.

Mayekawa – History (Contd…)

1964: Established the MAYEKAWA's first overseas subsidiary company, MAYEKAWA DE MEXCO S.A. in Mexico. Developed screw type refrigeration compressors.

1967: Established the subsidiary company, MYCOM CORPORATION, in Los Angeles, Calif., U.S.A.

1973: Established the assembly plant in Sao Paulo, Brazil.

1993: Established the plant in San Antonio, U.S.A.

2007: Established the subsidiary company, MAYEKAWA MFG. CO., LTD. India representative office in New Delhi, India.

Mayekawa – History (Contd…)

History of Mayekawa’s Organization Phases – Summary

The First Stage (1923-1960) – A small town factory on which the individual is the whole

The Second Stage (1960-1969) – High Growth : Departments and Divisions formed a bureaucracy

History of Mayekawa’s Organization Phases – Summary (Contd…)

History of Mayekawa’s Organization Phases – Summary (Contd…) The Third Stage (1970-1983) – Organic Thinking

Dispersion Group Network : flattening to form a more flexible

organization structure

Technology Acceptance Model

The Fourth Stage (1983-1992) – Doppo network : development of autonomous decentralization Downsizing v/s Descaling

Fractal organization Structure

History of Mayekawa’s Organization Phases – Summary (Contd…)

The Fifth Stage (1992 – now) – Doppo – Block – Zensha network IIT Roorkee Department

History of Mayekawa’s Organization Phases – Summary (Contd…)

Organizational & Managerial System

Relationship between Doppo, Block and Zensha within Mayekawa DOPPO – The Customer Adaptive Units

Legally independent companies

Strength of 10-20 people

Responsible for marketing, sales, engineering, manufacturing, accounting after service and general affairs.

Total doppos in 1993 were 100 (78 – domestic and 22 – overseas)

Every doppo is very original, detailed and comprehensive in approaching each customer

The Doppo-Block Network

The Doppos belong to one or more forums called Blocks depending on the type of market they serve or the region in which they operate

All participants in block activities are representatives of their doppos

Role is not governance but assistance and exchange between legally independent companies

Blocks decide how to bail out a member doppo with a problem, technical or otherwise

Blocks are a link between each doppo and the overall company - Zensha

Zensha – Functions of Headquarters Headquarters – president Masao Mayekawa, the staff, the

R&D, almost 160 persons in total

Provide support to Doppos and not boss them

Takes care of PR , Mayekawa welfare system, retirement funds, insurance etc.

Acts as the bank for all the doppos, receiving funds, disbursing loans, and staking new doppo start-ups

Most important function is the care and feeding of the Mayekawa culture

Common features of Mayekawa Core Technology

Shared respect for the primary values – thrift, hard work, craft pride, teamwork, and local initiative

No rules from headquarters policy reinforces the culture

Each doppo creates rules to adapt to the environment in which it finds itself

Coordination and Communication Written communication should be few in numbers and

short in length.

Two types of communication exist: Standardized data processed by computer Information interpreted by person

Most formal communication within Mayekawa is related to preparing and sharing business plans.

All members of a doppo join in preparing annual kigyokakeikaku that expresses what they want to become in future.

Process of kigyokakeikaku preparation

Zensha Block Doppo

Planning Guidelines

Refining Guidelines

Developing Plans

Doppo Plans

Block Plans

Zensha Plan

Corporate Culture & Strategic Decisions Distinctive features of Mayekawa’s culture and

strategic decisions: Human Oriented Thinking Open Mindedness Enhancing spirit of the enterprise Finding and achieving customer’s need in cooperation with

them Flexible and quick response to environment change

Special feature of HRM at Mayekawa: Almost all decisions of a doppo are done by common will of all

crew members. Every member in a doppo has kind of multifunctional role and

is also an executive. President of doppo is a coordinator of all members in a doppo.

Conclusion

A company that is always striving for survival is: Agile to change Making full use of entrepreneurship

In order to increase productivity under knowledge based society, “morale” of the people is the key.

Fragmented and specialized work needs rethinking.

A holonic management system is the tool for the tomorrow.