Splitting every business out again under a pure holding company (2001)

Between centralization and devolution

At the heart of this reorganization is a choice between binding a diversified group into one company and cutting it into independent ones — between centralization and devolution. From the centralizing NI-90 plan of 1987, which absorbed subsidiaries into the parent, to the 2001 devolution that spun every business back out, Nisshin chose opposite reorganizations of the same portfolio within little more than a decade. Running a group by rebuilding its structure that often can be read as the mark of a company that kept re-asking, each time, what shape was optimal. But devolution, while it grows self-reliance, carries its own price in duplicated overheads and synergies left on the table — a cost management recognized at the time.

The split structure took root, to the point that president Takihara Kenji calls it a strength. Yet holding each operating company to its own profit and loss also sharpens the outline between the businesses that earn and the ones that do not. Under precisely this structure the pharmaceutical business was later folded up, and overseas milling took a large impairment. Devolution raises each business’s sense of ownership, and in the same motion it accelerates the question of what to do with an underperformer. Rather than which of the two is correct, what shows through here is the company itself: Nisshin has kept choosing the shape of its organization anew.