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The Rise and Fall of Toshiba: A Case History of a Japanese Giant

Owen Simmons

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Published in Entrepreneur And Gentleman: A Case History Of A Japanese Company

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Toshiba was once a global electronics giant, but it has fallen on hard times in recent years. In 2017, the company was forced to sell its prized semiconductor business to cover massive losses from its failed acquisition of Westinghouse Electric Company. In 2021, Toshiba was again embroiled in scandal when it was revealed that the company had been inflating its profits for years.

Entrepreneur and Gentleman: A Case History of a Japanese Company

by Akira Sueno

4.5 out of 5

Language	:	English
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Print length	:	256 pages

What went wrong at Toshiba? This case history examines the factors that led to the company's decline, including its failed acquisition of Westinghouse Electric Company, its accounting scandal, and its poor corporate governance.

The Failed Acquisition of Westinghouse Electric Company

In 2015, Toshiba acquired Westinghouse Electric Company for $5.4 billion. The acquisition was intended to give Toshiba a foothold in the U.S. nuclear power market. However, Westinghouse was a troubled company, and the acquisition quickly turned into a disaster.

Westinghouse was plagued by delays and cost overruns at its nuclear power plant construction projects. In 2017, Westinghouse filed for bankruptcy, and Toshiba was forced to take a massive financial hit.

The Accounting Scandal

In 2021, Toshiba was revealed to have been inflating its profits for years. The company's accounting practices were so egregious that they violated Japanese law.

The accounting scandal led to the resignation of Toshiba's CEO and several other top executives. The company was also fined by the Japanese government.

Poor Corporate Governance

Toshiba's decline can also be attributed to its poor corporate governance. The company's board of directors was dominated by executives who were not independent of management. This allowed management to make decisions that were not in the best interests of shareholders.

The board of directors also failed to provide adequate oversight of the company's financial reporting. This allowed the accounting scandal to go undetected for years.

Toshiba's decline is a cautionary tale about the importance of good corporate governance. Companies that do not have strong corporate governance are more likely to make bad decisions that can lead to financial losses and reputational damage.

Toshiba's decline is also a reminder that even the largest and most successful companies can fall on hard times. When a company starts to decline, it is important to identify the root causes of the decline and take steps to address them. Otherwise, the decline can continue until the company is no longer viable.

Entrepreneur and Gentleman: A Case History of a Japanese Company

by Akira Sueno

4.5 out of 5