Falsified quality data at subsidiaries comes to light (2017)

What tampering at the periphery put in question

At the centre of this affair was a slackening of quality that had settled at the edge of a group grown by addition in pursuit of scale. Measured against a parent approaching ¥1.5 trillion in consolidated sales, a subsidiary with ¥30 billion of revenue was a small thing. But what customers were paying for was the reliability of Japanese manufacturing itself, and when the rot was found at the periphery, size appeared less as strength than as the flip side of control that did not reach. The dullness of continuing to ship for eight months after the tampering was known reflects how far management had held the periphery at arm's length.

There is an irony in what followed, since the crisis is what prompted the narrowing. Without the quality scandal, the review of an overgrown portfolio might not have moved nearly so fast. Through a change at the top and a governance overhaul, Mitsubishi Materials moved toward questioning its own definition as a comprehensive materials maker. That misconduct became the trigger for reform leaves a question common to every diversified company: how far the periphery is something you take on as part of yourself.