Kenwood 2001 Annual Report Download - page 5

KENWOOD Corporation Annual Report 2001 03
(3) Create a new Kenwood style in business through
restructuring.
Create a Flexible and Revitalized Organization
through Restructuring on a Large Scale
In order to "establish a corporate culture of vitality and
action," we are focusing our attention on the restructuring
on a large scale and strengthening of the management
system. The new Home Electronics Division, Car
Electronics Division, Communications Division, and
Devices Division which have the functions for both of
manufacturing and selling were formed on May 21, 2001.
These organizations are not companies in the legal
viewpoint, but are "quasi-companies" that are expected to
operate independent of each other. Each division
manager is given to full authority within their business, from
production to sales, in order to accelerate the decision
making process and clarify accountability. Each division
bears the responsibility for profits and losses in its
business including manufacturing and selling, and it must
undertake management of its business by using its
balance sheet and cash flow chart and improve the cash
flow of its division.
In addition to the strengthening of the organizations by
market or by products, the coordinating power of the
activities of the divisions are solidified.
First, factories throughout the world, once controlled by
wasting time. Of these, losses in subsidiary investments
have originally been included in the consolidation financial
position and thus the net consolidated loss stood at 15.0
billion.
Although Kenwood believes in making a constant return
to all shareholders, the severe financial status has forced
the company not to pay dividends for the year, giving
priority to amortization of negative legacy and revitalization
of the organization. In the future, expanding profits and
sharing the rewards will be the company's major focus.
The Mid-term Restructuring Plan
Aggressiveness & Speed
...A full-blown business reform for an early resurgence
In order to leave behind the current deficit operation,
Kenwood made a mid-term restructuring plan and
announced a plan to replace the president and change the
task of each director in March 2001. The new top
management was formed in April and we are now
undertaking the challenge of reforming the management
system fundamentally based on the above restructuring
plan and endeavoring to improve profitability and cash flow.
The three objectives to be pursued in the mid-term
restructuring plan are:
(1) Establish a corporate culture of "vitality" and "action,"
(2) Withdraw from non-profitable businesses, and