Philips vs Matsushita

PHILIPS VS MATSUSHITA
1) Philips and Matsushita have followed different strategies
a) Philips had responsive national organizations
b) Matsushita had centralized, highly efficient operations in Japan

2) Philips started 1892 by two brothers in Holland.
a) Gerard was tech innovator and his brother an Anton an excellent salesman.
b) Tradition of caring for workers (10% of profits to workers)
c) One product focus and focus on new technology
d) Small size of home market meant soon went international
e) 1919 sign “Principle Agreement” with GE and after this evolved from centralized into decentralized company.
f) Also broadened product line significantly at this time.

3) Philips organizational development
a) Early tradition of shared but competitive leadership by commercial and technical functions due to sibling rivalry between Anton and Gerard
b) Agreement that strong research was critical to Philips’ survival
c) 1930s in anticipation of war transferred overseas assets to trusts in UK and USA. Mgmt moved to USA and research labs to UK.
d) National Organizations (NO) became more independent during war and bombing destroyed Philip’s industrial plant in Netherlands.
e) This independence continued post-war and this was helpful in sensing and responding to local market differences in marketing and eventually in product development.
f) The importance of NOs to sales was reflected in a cosmopolitan corporate management who normally had several extended foreign tours of duty.

4) Philips: Attempts at Reorganization
a) Reasons for change
 i) Creation of common European market eroded rationale for country level subsidiaries.
 ii) New transistor based technologies demanded larger production runs at fewer larger facilities
 iii) Ability to bring innovations to market began to falter (e.g. microwave oven)
b) From 1970s to 1990s, 7 chairman tried reorganizing:
 i) 1970s, Van Reimsdijk and Rodenburg. Tilt power in matrix towards Product Divisions (PDs) and away from NOs. Closed...