The record consolidated loss and the handover from Kaneko to Nishigaki (1999)

A charismatic regime prolonged, and a turn delayed

At the heart of this decision lies not so much the financial first aid of a record loss and 15,000 job cuts as the fact that a charismatic style of management — running for about twenty years since the 1978 proposal of C&C — was wound up in the unusual form of President Kaneko’s sudden resignation. C&C, which bound semiconductors, computers and communications under a single banner, had been the driving force that pushed NEC to the top of the rankings of engineering graduates’ most-wanted employers. Yet while that centripetal force held the diversification together, the prolonging of the regime also seems to have delayed the judgement to reselect the businesses in step with the reshaping of the world market.

The road NEC travelled after the arrival of the new president, Koji Nishigaki, was one of letting go — one by one, from semiconductors to PCs to mobile phones — of the businesses it had over-extended under C&C. The 1999 disclosure of the loss and the change at the top mark the beginning of that sorting-out, which might be called a “decade of divestment.” The weight of this decision lies in the fact that the charismatic regime was touched not while there was still room to spare in good times, but under the pressure of the largest loss in the company’s history. How much does long-lasting success under a single banner delay the next turn? — NEC’s 1999 appears to leave a question that speaks to Japanese companies today as well.