Reference no: EM132989971

Mitsubishi Motors Corporation (MMC) today announced plans to revise its organisational structure. The changes will see the company's structure slim down from 230 departments to 131, which will hopefully speed up the decision-making process and clarify responsibilities.

The MMC affirms the following guiding principles in conducting business, which are the same since the company began in the 1930s. It has recognized that there have been dramatic shifts in values, the structure of society and environment since its first values were announced, and therefore some revisions are necessary to bring it up to date.

'Shoki Hoko' - Strive to enrich society, both materially and spiritually, while contributing towards the preservation of the global environment.

'Shoji Komei' - Maintain principles of transparency and openness, conducting business with integrity and fairness.

'Ritsugyo Boeki' - Expand business, based on an all-encompassing global perspective.

To support its desire to restore consumer trust in the company and a belief in how employees should be treated, MMC has created a number of restructuring initiatives.

Restoring trust, implementing reform

• A Business Ethics Committee consisting mainly of experts from outside the company will be established to supervise the company's efforts to comply with its pledge to place the utmost importance on customers, safety and quality.
• A new Quality Affairs Office will handle issues related to quality assurance and management, while a new Corporate Social Responsibility (CSR) Promotion Office, directly under the CEO, will promote and improve quality auditing and compliance issues throughout the company.
• A Corporate Restructuring Committee (CRC), headed by a Corporate Restructuring Office appointed from among outside investors, will be set up directly under the CEO for one year and cross-functional teams created for all issues related to the revitalization plan. The teams will reach through the entire organisation and make bold proposals to the CRC.

Organisations directly under the CEO (Chairman of the Board) and COO (President)

• The CEO will supervise departments related to overall management while the COO will supervise departments involved in executing business operations. Newly established departments reporting to the CEO include the CSR Promotion Office, Finance Group Headquarters, Group Corporate Strategy Office and the secretariat of the CRC.
• Newly established departments reporting directly to the COO include the Quality Affairs Office, Corporate Staff Office, Product Operations Group Headquarters, Domestic Operations Controlling and Accounting Department, and Produce Controlling and Accounting Department.

Other departments to be set or re-organized

• CSR Promotion Office, which also includes the Business Ethics Committee
• Finance Group Headquarters will include the Group, Overseas, Domestic and product Controlling and Accounting Departments
• Group Corporate Strategy Office
• Quality Affairs Office
• Corporate Staff Office
• Product Operations Group Headquarters
• Production and Logistics Office
• Global Aftersales Office
• Domestic Operations Group Headquarters
• Overseas Operations Group Headquarters.

In short, all functions will fall under the CEO or the COO. The aim is to clarify the roles and responsibilities for each part of the business. More detailed information can be found at: https://media.mitsubishi-motors.com/pressrelease/e/corporate/detail1069.html

Question 1

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How would you categorize these changes in terms of the types of change?

Question 2

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Attempt to match the proposals and the structure shown in Illustration 7.18 to any, or a mixture, of the types of organisational structure discussed in this chapter.

Question 3

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What might be the advantages and disadvantages of Mitsubishi's proposed structural changes?