Despite their huge presence overseas, most Japanese companies still operate within a tight vertical structure, meaning that decisions are made top-down from the home country, and a flow of information doesn’t necessarily reach divisions in different departments. Howard Stringer, the chief executive of Sony Corp., famously said he wanted to “smash” the “silos” that existed within the consumer electronics behemoth so it could create better products across different departments.
“We have the lowest birth rate in the world. The reality of this market is that domestic demand is declining and companies are being forced globalize,” said Akihiko Kubo, the president of Weber Shandwick in Japan. “A company can’t apply the same model it has been using domestically to its global operations.”
“We are very keen to see if there is anything we can learn from this,” said Hideyuki Yamamoto, a Japan Tobacco Inc. spokesman, who declined to say whether the company had hired an outside consultant since the Toyota controversy erupted in January.
Japan Tobacco, the country’s third-biggest cigarette maker, has also learned from its own unpleasant recall experience, which forced it to institute new measures to deal swiftly with crises and help manage their risk. Two years ago, 10 people in Japan were poisoned after eating Chinese-made frozen dumplings made by Japan Tobacco’s food division. A number of dumplings, or gyoza in Japanese, were found to contain pesticide, and thousands of people complained of falling ill following the initial reports.
“We have laid out a structure where bad news can be shared as quickly as possible with top management,” said Mr. Yamamoto. “We have learned that if anything could undermine our corporate reputation we must share it with top management quickly.”