TOKYO, Jan. 31, 2022 — (JCN Newswire) — NEC Corporation (TSE: 6701) today announced corporate structure reforms to further accelerate and strengthen the execution of business strategies in support of achieving of the 2025 medium-term management plan. ‘authority with clarification and reinforcement of responsibilities’ should be introduced through a new corporate structure which will be effective from April 1, 2022.
With advances in digital transformation (DX), customer needs are shifting from improving operational efficiency and business innovation within companies and organizations to creating new values and activities, including cross-industry initiatives. Moreover, the competitive environment is becoming increasingly global and complex. In order to react quickly to such changes in the environment, it is essential to allocate NEC’s resources flexibly and quickly.
Since the introduction of the business division system in the 1960s, NEC has operated without significantly changing its basic organizational structure. Due to the pursuit of individual optimization, the organization has become subdivided, and the authority and investment capacity of individual subdivisions are insufficient. Amid rapid changes in the market environment and major shifts in NEC’s business portfolio, the company will undertake drastic reforms with the aim of establishing a corporate structure based on the strategic pillars of the management plan. in the medium term 2025 during the 2023 financial year.
First, in FY2022, NEC will reduce the number of organizations by approximately 2/3, from approximately 150 to approximately 50, by consolidating current organizations at the divisional level into units related to markets, products, services and functions. Additionally, the number of tiers from CEO to staff will be reduced from the current 8 tiers to 6 tiers in principle.
Through these reforms, the authority and responsibilities of leaders, including heads of departments, will be significantly enhanced, dynamic resource allocation in response to changes in the market environment will be achieved, as well as the acceleration of decision-making and the execution of initiatives. . In addition, by decoupling positions and internal levels, and allowing more flexible allocation of human resources, NEC will promote the selection of young people for management positions.
The new organization will be based on a hybrid structure between a hierarchical model and a project model, aiming for a system in which highly specialized teams led by schedule managers flexibly execute projects in order to carry out strategies quickly. For professional positions, from the managerial class to the personnel level, NEC will award titles according to the level of specialization of a position and facilitate the transition to employment-oriented human resource management.
At the same time, in order to accelerate the DX strategy, NEC will unify digital-related products, services and technologies, including the network field, as well as strategic consulting, engineering and field marketing functions, within the “Digital Business Platform Unit”, which is a transversal organizational unit related to digital, aimed at strengthening and extending DX offers to customers.
In addition, as part of strengthening the business functions, NEC will integrate the internal DX reform project team with the internal IT development and operation functions, and establish a department that will lead the business transformation, including NEC’s own DX. In addition, marketing strategy functions, thought leadership functions, communication functions and business design functions will be integrated into the business planning department. This will be done to build market analysis capabilities to formulate strategies that can respond quickly to changes in the environment, as well as to strengthen the global communication of messages based on the NEC Group objective and NEC 2030VISION, while that NEC promotes the theme “Sixteen the Future together”.
In fiscal 2018, NEC introduced human resource management by job type for recruiting, training, placing and evaluating executives, based on the concept of “right time, right place, the right person”. Now, in order to increase the quality and quantity of human resources with global competitiveness, NEC aims to introduce employment-type human resource management for all employees in fiscal year 2023. In the future, NEC will continue to work on reforms to promote the optimal organization and system for the achievement of the medium-term management plan 2025, while taking measures to ensure global differentiation and a sustainable increase in competitiveness.
About NEC Corporation
NEC Corporation has established itself as a leader in the integration of information technology and networks while promoting the brand statement “Orchestrating a Brighter World”. NEC enables businesses and communities to adapt to the rapid changes occurring both in society and in the marketplace, as it provides the social values of safety, security, fairness and efficiency to promote a more sustainable world where everyone has the chance to reach their full potential. For more information, visit NEC at https://www.nec.com.
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