NIPPON STEEL

CORPORATION
GROUP 7
 Company’s history
Trace back it’s origin back to 1901
Steel manufacturing in Japan in initial years
was nurtured by the Japanese government
and was publicly held with miniscule small
players in private space
After the withdrawal of government support
in early 50’s , two steel giants Yawata steel
and Fuji steel merged to form NSC in 1970
The reason for the company’s success was
relation with workers and unions (especially
the moderates which have the ideology of
peaceful mediation without any strike or
violent means, which hampers the
production process)
They developed the concept of “self-
management ” groups of blue collar
employees work toward safety and process
improvement, all these policies led NSC to
be viewed as the most progressive employers
Today’s situation
 The company was in bad financial situation from
1972 to 1978, this timespan also includes the “oil
shock” which strangled the global economy
 Company reserves were negative from year 1972 to
1976 with CAGR of -2.6% in this period
 Recent white paper released by Japanese
government which proposed increasing the
retirement age from 55 to 60 years for civil servants,
unions grabbed this opportunity to propose same
changes in the organization also
 Increase in financial burden for additional 5 years
and reluctance to lay of employees
 This lead to accumulation of extra workforce in the
organization.
 Options available
Rationalization: NSC had to cut down its intake of employee gradually along the years, this will lead to cost reduction ,
not hiring new recruits each year eventually they won’t have young and experienced people , 28 to 38 which forms the
backbone of the organization.
Stopgap placement measures: Its consist of five measure which are as follows accelerated career trainings, “loaning”
workers to other firm ,restructuring work assignment given to subcontracting firms, transfers of personal to help start a
new venture ,early placement of workers in their post retire job placements.
There were others ways to reduce employment costs which are lower wages, including fringe benefits, retirement
bonus, or seniority increase, each of these options offered potential for savings but there is a constant threat of spoiling
of relationship between employees and management.
There are various implications if the above stated measures are implemented
1. This will lead to reduction of autonomy and their sway in decision making which are foundation stone of company’s
success
2. Not opting for delayed retirement at 60 would undermine their morale even if they tried to delay the process, it will
also implant suspicion among the employees for the company management.
Management wanted to devise a plan which is acceptable to both workforce and union to, maintaining the operating
efficiency and morale of the employees.