The Igawa restructuring and the break with self-reliance (2023)

From the volume of expansion to the efficiency of capital

What this restructuring asked was whether a company that had spent eighty years expanding could let go of the very impulse to hold everything itself. Depend on a single engine in meat, spread procurement bases across the world, invest again in a baseball club and in new businesses — the expansionist bent a single founding generation established did build the leading position in Japan, but it also deferred the question of whether each business was earning independently. That President Igawa Nobuhisa diagnosed his own company as suffering “a lack of urgency in each operating division,” and moved into selling unprofitable businesses, cutting production lines and compressing capital expenditure, can be read as an attempt to swap the yardstick of management from the volume of growth to the efficiency of capital.

That said, this reform is continuous with the controls tightened after the beef-mislabeling scandal. The reflection that the apparatus built to recover lost trust had, at some point, blunted each division’s will to attack shows how the demand to shore up the defence and the demand to recover the attack can conflict inside the same company. As of this writing, business profit has run ahead of plan and the overseas operations have begun to change from procurement bases into businesses that earn through processing. But cultural reform and the monetisation of new ventures remain in progress, and it is not yet possible to say that a new model of growth has settled in place of expansion. How different a company the reform handed to President Maeda Fumio will build from the one that chased volume appears to rest with the next several years.