4. Initiation of Planned Management
1949-
(2) Addressing Trade Liberalization
- 1961
- The movement towards trade liberalization became increasingly prominent, posing a significant threat to Japan's automotive parts industry, which was still vulnerable in terms of quality and cost. To confront this challenge, our company formulated the “Second Five-Year Plan,” and called for the motivation and unity of all employees to tackle this issue head-on.
As Japan entered the 1960s, the economy faced an era of trade liberalization, exposing it to fierce competition from imported goods. To cope with this, it was essential to elevate both quality and cost standards to international levels. However, in terms of cost, we were still about 20% higher than international standards, necessitating substantial improvement.
The First Five-Year Plan, being our company's inaugural long-term plan, involved considerable challenges. Fortunately, we were able to achieve our target figures, benefiting from the concurrent rise in motorization. Building on this success, we promptly began drafting the next plan. By January 1961, the “Second Five-Year Plan” was completed.
While the First Five-Year Plan focused internally on deploying Bosch's technology within the company, the Second Five-Year Plan was an outward-looking strategy designed to respond to changes in the business environment. This plan aimed to achieve “international quality and international pricing” by 1963, thereby positioning our company as a global manufacturer of electrical components. The aspiration to become a “global enterprise” began to take shape during this period.
Reference：Overview of Second Five-Year Plan
When announcing this plan, President Torao Hayashi approached the severe business environment with a strong sense of urgency. He concluded his message to the employees with the following words:
“It is clear that achieving the goals of the Second Five-Year Plan will entail extraordinary difficulties. However, unless we overcome these challenges, the company cannot survive. We must remember that the next five years will be a decisive period, determining whether we prosper or perish. With unwavering determination, solid unity, and our utmost efforts, we must strive to complete this Second Five-Year Plan.”
- Deep DiveEstablishing Internal Systems for Plan Realization
- In the second year of the Second Five-Year Plan, 1962, significant organizational changes were made to ensure the plan's successful implementation. To allow the president and all executives to focus on the strategic aspects of management policies, a bold delegation of authority was executed. Routine operational management was delegated to subordinates, while the president, senior managing directors, and managing directors concentrated on company policies and management planning. Each division was overseen comprehensively by its respective director. By securing the cooperation of all departments, the company established a comprehensive system to navigate through the challenges posed by trade liberalization.