PHILIPS VERSUS MATSUSHITA: A NEW CENTURY, A NEW ROUND
...d South America. Philips had to sell its businesses, had to close down inefficient facilities, and downsize in the corporate structure. This has been a struggle for the company since 1960s. In order to globalize product development and production, the parent company had to gain tighter control over NOs, especially the north American Philips Corp. Then CEO Van der Klught anticipated that the intense restructuring would pay off soon. On the contrary, heavy losses provoked a class-action law suit by American investors. This created a conflict and in 1990, the CEO and half of the management board were replaced. Earlier divestment of some of Philips high-tech businesses and a major cut in R&D personnel left the company with few who understand the technology of the new priority businesses. The company needed a more structured and simpler manufacturing and marketing organization. Its core businesses and plants were scattered and the PD/NO Matrix was not working. Matsushita has always looked for expanding its product line ad distribution system. Its divisional structure has been exemplary and the company is great at adapting to different markets with different situations. The management link was strong, the central prod...