Human Resource Management System Reforms at Matsushita

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Case Details:

Case Code : HROB028
Case Length : 15 Pages
Period : 2001
Pub Date : 2003
Teaching Note :Not Available
Organization : Varied
Industry : Consumer Electronics
Countries : Japan

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts Contd...

The Early Retirement Plan

In mid 2001, the financial problems of Matsushita increased significantly. Matsushita posted a loss of 19.4 billion in the quarter ending June 2001 compared to 9.4 billion profit for the same period in 2000. In spite of Nakamura's previous assurances, the financial problems forced him to consider the option of reducing its workforce through an early retirement plan. Nakamura announced that Matsushita would cut down at least 3 to 4% of its global workforce through an early retirement plan that would reduce the company's personnel expenses by 100 billion by the financial year 2002. As a part of its cost cutting initiatives, Nakamura also planned to lower the interest rates paid on the welfare pension.

In July 2001, Nakamura announced an early retirement plan, which was open for all 80,000 employees working in the five major companies of the Matsushita group. The company started soliciting applications in September 2001. To qualify for the retirement plan, an employee had to be a labor union member, with ten or more years of continuous employment and had to be less than 58 years old...

The Road Ahead

The early retirement plan received mixed reactions from the employees at Matsushita and its subsidiaries. While some employees supported Nakamura's view and offered to quit under the plan, there were others who refused to do so despite being continuously counseled by the top management.

One of the employees who had worked for 30 years at Matsushita said, "An extra payment for retiring earlier than mandatory age won't pay for my livelihood in the future. Increased production in China and other countries means fewer jobs at home."

The management at Matsushita maintained that early retirement was not compulsory and it was completely left to the will of employees...


Exhibit I: Matsushita's Five Year Financial Summary
Exhibit Ii: Matsushita's Mission Statement
Exhibit Iii: Retirement Benefits in Japanese Companies
Exhibit Iv: Wage System at Japanese Companies
Exhibit V: Personnel Problems at Matsushita


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