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ORGANIZATION

19 January, 2016 - 15:18

The organizational structure of Mitsui & Co may be portrayed as [in Figure 11.10].

The head office is very important in Mitsui. The staff divisions-corporate secretary, personnel, legal, planning, finance and systems-gather necessary information (information-gathering is a high-priority activity in Japanese companies), draft corporate policies and see that they are approved via the ringi decision-making system, and coordinate policies and information for the operating divisions and geographic regions worldwide. The overseas planning division at headquarters is crucial for Mitsui's worldwide business. It coordinates the international policies, plans and operations of each of the divisions and overseas subsidiaries. It aims to eliminate conflict and duplication while providing for broad, synergistic action. This coordinative role is in itself a matrix of communications and shared responsibility among the various units.

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Figure 11.10 Mitsui & Co 
 

The traffic division tries to arrange optimal distribution, including insurance, for each transaction. The development department draws upon the firm's full range of services to define and meet the needs of industrial development projects. It conducts feasibility studies and surveys and organizes ad hoc task forces to undertake certain projects. After the corporate role is defined, most projects are then transferred to the appropriate product divisions for implementation.

Mitsui's operating divisions (or business groups) cover: iron and steel; nonferrous metals; fuels; chemicals; textiles; foodstuffs; and machinery. They may be thought of as "business groups," because each contains a number of related divisions. For example, iron and steel is subdivided into iron ore and other ferrous minerals, pig iron, ferroalloys, semifinished steel, steel products and coal. Other divisions include construction and related materials, lumber, forestry, pulp and paper, rubber and general merchandise. The divisions operate worldwide. They do not manufacture: ... their role is trade-worldwide export and import. Each operating division has its own administrative division, which administers the group's interests worldwide and provides staff support in the form of long-range planning and policies, accounting, credit, shipping and personnel. Most division heads are executive managing directors of Mitsui.

Some of Mitsui's divisions have an overseas department and others do not, depending upon the business. Typically, those that have them began their business after World War II, were successful domestically, then exported and subsequently created an overseas department. The departments' initial task was exporting, and almost all of them later became active in a line (P&L) role overseas.

The firm has 51 domestic offices, 75 overseas offices and 28 companies. Sixty-seven offices constitute the overseas trading subsidiaries. Five of these are considered major overseas trading subsidiaries-... USA Inc, Europe Ltd, Europe GmbH, Australia Ltd, and Canada Ltd. The affiliates include consolidated and unconsolidated subsidiaries and associated companies. The head of each office and of each trading subsidiary has responsibility for all Mitsui business covering all company divisions-in his geographic location. Many of these divisions are represented by a separate department. Each office and trading subsidiary also has its own administrative division and some staff functions, such as credit and accounting. Each office, affiliate and trading subsidiary has full authority to conduct business, within certain limits set by the head office.

Completing the matrix are four overseas regions: America (includes North, Central and South America), Europe, Mideast, and Oceania (Australia and New Zealand). Management of Asia as a region is diffused throughout all head office operations. The executive officer of each region is responsible for all Mitsui operations in that region and is delegated authority to conduct business, within certain limits. The regional executive officers of America, Europe and Oceania are either executive vice-presidents or executive managing directors of the parent organizations. The head of Mideast is at a lower level, but has special management authority.

Finally, the shareowners of Mitsui differ from those of many Western firms in two respects. First, they are companies rather than individuals. Over the years, Mitsui has helped to create many Japanese companies and owns shares in them. The companies, along with other commercial enterprises, simultaneously own shares in Mitsui. Second, these corporate shareowners are primarily interested in long-term business development, compared with the unremitting focus on short-term return on investment commonly found in the West.