Deployment of a Divisional Structure

This chapter investigates the implementation of a divisional structure in light of changes in business strategies, management systems and practices, and managers’ traditional attitudes. The deployment of a divisional structure in Japan and Germany, the advancement of diversification in large companies and its relationship to organizational structure reforms, and the overall actual conditions after the deployment of the divisional structure are all examined. Furthermore, this chapter examines case studies of representative enterprises in major industrial sectors such as the chemical, electric, and machinery industries, the precision instrument industry, the heavy engineering and shipbuilding industries, and the iron and steel industries. These discussions clarify various aspects of the deployment of Japanese and German-style divisional structures, including (1) the degree of self-sufficiency of divisions, (2) the level of influence of delegation of authority and responsibility, (3) the traditions and roles of the board of directors and collegiate management, (4) the characteristics of the board-majority system, (5) the use of a compensation system linked to divisional results, and (6) the significance of divisional results.