Quasi-divisionalization: escaping the slow big company (1994)

The hard problem of speed at scale

At the heart of this reform was the question of how to reconcile size with speed of decision. Judging that there is a limit to how large a business a single chain of command can handle, Asahi Glass recast the company as a collection of self-accounting business units and pushed authority and responsibility down to the front line. It was an attempt to cut out, through performance measurement and delegation together, the supplier-side slackness ingrained in an era when anything made could be sold. That it introduced an appraisal system rewarding people by the numbers suggests a judgment that attitude alone does not change a company's constitution.

That said, dividing authority among business units sits in tension with the cohesion of a materials maker and with the long time horizons of research. Asahi Glass went on rebuilding the organization afterwards — a fast-decision structure for the electronics business, then the in-house company system — and in the 2010s pushed as far as shifting the portfolio away from dependence on glass toward life sciences. The 1994 quasi-divisionalization stands as the opening move of that long reorganization, and the problem of how a large company acquires speed kept being asked in new forms thereafter.