But while such changes may be easy to articulate, they are hard to implement. For all of its talk, Panasonic has been slow to dismantle its lifetime employment commitment to those hired under the traditional system. This was underlined in early 2001 when, in response to continued poor performance, Panasonic announced it would close 30 factories in Japan, cut 13,000 jobs including 1,000 management jobs, and sell a “huge amount of assets” over the next three years. While this seemed to indicate a final break with the lifetime employment system—it represented the first layoffs in the company’s history—the company also said unneeded management staff would not be fired but instead transferred to higher growth areas such as health care.With so many of its managers a product of the old way of doing things, a skeptic might question the ability of the company to turn its intentions into a reality. As growth has slowed, Panasonic has had to cut back on its hiring, but its continued commitment to long-standing employees means that the average age of its workforce is rising. In the 1960s it was around 25; by the early 2000s it was 35, a trend that might counteract Panasonic’s attempts to revolutionize the workplace, for surely those who benefited from the old system will not give way easily to the new. Still, by the mid-2000s it was clear that Panasonic was making progress. After significant losses in 2002, the company broke even in 2003 and started to make profits again in 2004. New growth drivers, such as sales of DVD equipment, helped, but so did the cultural and organizational changes that enabled the company to better exploit these new opportunities. The company continued to make solid profits until 2009, when, like most enterprises, it was hit by the global recession. Panasonic’s response to this showed how much the company had changed. The company quickly announced that it would close 27 plants and lay off 15,000 employees, half of them in Japan, signaling perhaps, the final end of it’s lifetime employment commitments.
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