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Inward looking Renesas needs to spin outward

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sharps_eng
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re: Inward looking Renesas needs to spin outward
sharps_eng   4/24/2012 8:51:09 PM
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The Chinese seem to have a 'team'approach to managing things including their country. It is hard to pin anything on an individual. Small companies work well as the team functions effectively, and individuals allow themselves to be subsumed in the excitement of the dream. In larger companies, new people coming in don't bring that feeling with them, they may be walking wounded from layooffs elsewhere and unless the growing company consciously creates small exciting teams for these incomers to join they will simply convert the happy little company into a copy of whatever sick corporate they just left. The anthill does work as long as everyone has their place and is cared for, and their 'royalty' can behave very badly and enjoy many benefits and still be tolerated. But if the ants become hungry and aware of gross inequality, and if someone offers them an alternative dream, as happened in 1917, then look out! Is there any Japanese history of revolution from below? I seem to recall this is where Samurai came from? So is there a national spirit that leaders can awaken to present an alternative dream instead of 'more of the same'?

sranje
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re: Inward looking Renesas needs to spin outward
sranje   4/23/2012 9:01:29 AM
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Great article and fishball graphic

WW Thinker
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re: Inward looking Renesas needs to spin outward
WW Thinker   4/22/2012 9:48:42 PM
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The assertion of "Renesas won't survive" should be correct. It is only a matter of when, assuming that the management style doesn't change. Many of the comments also hit the right note by saying that hte culture issues play a big part too. Flip side of the "consensus management" is: if one does not make the decision, he/she doesn't not have to bear the consequence especially when the result is bad. Simply put, no accountability is a big, if not the biggest, factor of why so many large businesses in Japan keep failing. Top management like Akao and Sebt are certainly responsible for the failure of Hitachi Semi (haven't people noticed that majority of the top management team came from Hitachi, not from Mitsubishi and NEC), Renesas Technology and now Renesas Electronics. What is the chance for Renesas in the marketplace which only get toughter than ever, under such kind of management team? You don't need to have Ph.D. degree to know the answer.

akatou
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re: Inward looking Renesas needs to spin outward
akatou   4/21/2012 4:41:52 AM
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Renesas won't survive. I think it is a done deal. All along, their revenue after merger has been smaller than the sum of pre-merger. What is worse, red figures on their PNL has kept on inflating. The mergers in the past achieved nothing. The 'Smart Society' is cool as a buzz word, but if you look at their product line, it shows no intention of focusing at a particular segment. It is merely an attempt to justify keeping all the products that they have now. In short, they still have way too many products.

t.alex
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re: Inward looking Renesas needs to spin outward
t.alex   4/21/2012 3:46:39 AM
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Renesas already had problems since the merging of Hitachi and Mitshubitshi. There are so many overlapping products. Resources are not spent on making a few good products but still maintaining so many product lines. Any new merging will just make it worse.

DMcCunney
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re: Inward looking Renesas needs to spin outward
DMcCunney   4/21/2012 2:22:10 AM
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"Wouldn't it be logical to think it's better to find potentially a bigger and exciting opportunity at a smaller company?" Sure would, if the opportunities existed. But the ones I spoke of are the ones *not* retained by the new ventures when the dust settles. What opportunities *exist* for them? My concern is actually broader and deeper. The single biggest difference I can think of in Japanese culture from the US is that Japanese are members of *groups*. They derive nearly everything from their group membership. This goes far back in Japanese history. Think of the samurai portayed in Kurozawa films like "The Seven Samurai" set in the Edo period. Tha samurai were at the top of the social order, but they derived their status from their service to a lord. They were part of a group defined by being subjects of that lord. If a samurai's lord was killed, he became ronin - masterless - and if he couldn't find another lord to take him into service his propects were bleak. He was no longer part of a group. In current Japan, the *company* a worker works for defines the group he belongs to. When the tradition of lifetime employment began to erode and Japanese workers faced layoffs for the first time, it was traumatic in a much deeper manner than it is here. They were not simply losing their job, they were being tossed out of their *group*. Reports of suicides by laid off salarymen come as no surprise. Japan has not evolved the mechanisms to cope with numbers of people who are *not* part of a group. There was no need, as it was an infrequent occurrence. It is far more frequent now, as changes in the underlying economy mean you may not be able to count on lifetime employment, and you may change groups more than once. But you have to have another group to join, and defined mechanisms for making the transition. I think Japan needs to develop both. "But would Japanese management accept that?" They may not have a choice.

junko.yoshida
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re: Inward looking Renesas needs to spin outward
junko.yoshida   4/20/2012 10:35:24 PM
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You wrote: So the biggest question might be a cultural one: given the above, can Japan accept the fact that the result will be smaller and employ less people, and what will it do for the ones left out of whatever remains when the dust settles? That's an interesting question. Culturally, and I should say, traditionally, Japanese employees in general have always preferred working for big corporations. But I believe that things are changing -- at a time when a number of "big" corporations are actually failing. Wouldn't it be logical to think it's better to find potentially a bigger and exciting opportunity at a smaller company? But would Japanese management accept that? Spinning off and/or selling off different parts of its own company require bold thinking and bold steps -- most Japanese companies have never gone there before. But I truly believe it's time.

DMcCunney
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re: Inward looking Renesas needs to spin outward
DMcCunney   4/20/2012 10:09:36 PM
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"Many problems Japanese corporations are facing today are more fundamental, structural and even cultural." Agreed, but what *can* address them? Any possible solutions start with management. One issue I can see on a cultural level is the concensus management style common in Japanese companies. I don't think Cheng's notion that "Japanese companies don't really make decisions" is exactly accurate: my feeling is that they do, but their "Bottom up, let's get everyone to agree a change is needed" style makes it impossible to make decisions *quickly*. Once a decision *has* been made, Japanese companies can implement blindingly fast, but reaching that point may simply take more time than a company in the current tech environment *has* to make it. Another issue is perceptions of the underlying problem. The proposed merger essentially asks "Can several sick companies be combined into one strong one?" Well, maybe, but the resulting strong company is going to be a lot smaller, with a lot fewer people, and focused on fewer areas. This is both a structural and a cultural problem. If underlying motives for proposing this are face saving and preserving employment, the move will founder on unpleasant realities, because the business simply isn't there to support anything like the current unmerged operations, and merging them won't magically make it appear. It may well make sense to look at spinning off various parts to focus on particular solutions for particular markets, but regardless of whether the end result is one smaller big company, or an assortment of much smaller companies, there will still be a lot less of it than there was at the beginning. So the biggest question might be a cultural one: given the above, can Japan accept the fact that the result will be smaller and employ less people, and what will it do for the ones left out of whatever remains when the dust settles?

junko.yoshida
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re: Inward looking Renesas needs to spin outward
junko.yoshida   4/20/2012 11:27:58 AM
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It’s easy to blame corporate failures on the management, which many people including the press -- ours included -- do all the time. I am not sure, however, whether many of the Japanese corporations spiraling downward these days can be simply saved by “brilliant” management. Many problems Japanese corporations are facing today are more fundamental, structural and even cultural. But if Renesas were to miss the annual sales forecast of 885 billion yen, it would be a bad news for Renesas. Currently, there are speculations going on among some in the financial community that Renesas may not make its own forecast -- already revised once earlier this year. Of course, we won’t know that until early May when Renesas discloses the number. The point is, as one of my sources told me, after this story was posted, “The fact that Renesas couldn't give the bankers better guidance is itself insightful about how the corporate planning group is really dislocated from the actual operations.”

Deviant
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re: Inward looking Renesas needs to spin outward
Deviant   4/20/2012 12:33:24 AM
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Pat...

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