Reorganization of the sales and distribution network
Revolution with the company's future at stake
After the Atami Conference, Konosuke Matsushita temporarily took over for the Corporate Sales Division director, and set to work to solve the company's problems by totally revamping sales and distribution organizations.
By February 1965 he had drafted a plan for a new national sales network based on:
1) nationwide reorganization of the sales company network; 2) initiation of direct transactions between sales companies and manufacturing divisions, bypassing sales offices; and 3) creation of a new credit sales system.
Within the company, the manufacturing divisions were given more fully autonomous management, sales arms of the company were given a greater voice in product development, the sales organization was renewed and provisions were made to support sales companies and retail stores.
Matsushita was prepared to stake the company's future on this revolutionary plan, saying that he was prepared to sacrifice profits for three years if that's what it took to get the new organization running smoothly.
Many sales companies and retail stores initially opposed the reorganization. However, once they recognized the intent of the reorganization, they immediately initiated efforts to boost business under the new policies. Their commitment, combined with a general optimism in the industry as a whole, brought the company back to health.
Konosuke Matsushita is thanked for the success of the new sales organization at 1966 regional meeting of the National Shop Association.
Establishment of the five-day work week
Employees and their families take advantage of two-day weekends.
Sights set on higher wages and productivity
Konosuke Matsushita's travels abroad after the war convinced him that the company needed to place a high priority on bringing employee wages and productivity up to American and European standards. In the years from 1959 to 1965, the company made major strides in this direction by implementing a five-day work week and devoting more resources to non-wage benefits, such as health services and recreation facilities.
In April 1965, Panasonic became Japan's first major manufacturer to introduce a five-day work week. The company created a stir in the media when he announced the move five years earlier in January 1960. The reasons, he stated, were two-fold: It would help achieve the same high productivity that foreign companies enjoyed, while simultaneously improving the quality of life of Panasonic employees. "We need a dramatic increase in productivity if we want to compete with foreign companies. Having two days off every week will help us to achieve this by giving us ample time to refresh mind and body, and greater opportunities to enrich our lives."
The time for the actual change-over came as the company was battling with the effects of an economic slump that began in 1964, a situation which was reflected in Matsushita's remarks.
"It's not easy to implement a five-day work week when the national economy is facing hard times. But I want you to appreciate the merits of this arrangement and set your sights on bettering the high productivity and rational management of the United States, which has served as our model. I want you to work with vigor with the understanding that you are at the forefront of our effort to bring Japan up to the level of the United States."
The company promoted the program with the slogan "One day study, one day rest," and the company gradually adjusted its operations to a five-day work week. This policy contributed to higher employee incentive and productivity.
During the same period, the company constructed the Senrioka Health Center near Osaka. The center included sports, recreation and leisure facilities, an auditorium, a hall for marriage ceremonies, and accommodations. The company also built four lodges for employee use in resort areas. In addition, the company opened the Employee Training Institute in 1964 and the Hirakata Gymnasium in 1965.
In the area of health services, the company set up a health management department under the Matsushita Electric Health Insurance Association in 1959, and in 1963 established health management centers that served both employees and their families.
In 1967, Matsushita brought the focus back to wages and productivity. "In five years, our company's business should improve, and its wages should surpass those of electronics companies in Europe and approach those of American companies." This was realized in 1972, when the comparative wage indices, including bonuses, for Panasonic employees surpassed those of West Germany, nearing those of the U.S.
In 1966, Panasonic implemented a new wage structure in which salaries were determined by job classification rather than seniority. This structure not only enhanced employee productivity, it paved the way for moving capable employees into positions where they could exercise their skills, rewarding their work appropriately.
New employee training center and gymnasium in Hirakata, Osaka.
Resort lodge for employees in Toba City.