Breakingviews – Panasonic pushes limits of rewiring circuitry

HONG KONG (Reuters Breakingviews) – Panasonic’s complicated corporate circuitry cries out for simplification. The Japanese conglomerate is yet again reorganising a $26 billion electronics empire that spans fax machines to electric-vehicle batteries. It should streamline operations and improve profitability. With luck, it will also make it easier for new boss Yuki Kusumi to lead a broader breakup.

HONG KONG (Reuters Breakingviews) – Panasonic’s complicated corporate circuitry cries out for simplification. The Japanese conglomerate is yet again reorganising a $26 billion electronics empire that spans fax machines to electric-vehicle batteries. It should streamline operations and improve profitability. With luck, it will also make it easier for new boss Yuki Kusumi to lead a broader breakup.

The latest plan takes things even further. The new holding company arrangement features a revised organisational chart with as many as eight separate groups. Although it is designed to speed up decision making, it will still leave Kusumi grappling with too much sprawl.

Panasonic’s archaic setup has contributed to a stubbornly low annual net profit margin that hasn’t exceeded 4% since before the millennium. Fellow Japanese conglomerates have managed to do better. Sony, for one, pockets 7 cents for every $1 of sales after embarking on its own redesign that offloaded drags such as personal computers and sought recurring profit from subscriptions and services.Reuters News

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