Chapter 3
Introducing the Associates system
[ Japanese - English ]
go to Table of Contents
>>
Cheerful, Enjoyable, Lively, and Exciting. I did it!
>>
Adapting Locks Out Adaptability
>>
The Parent Company Must Also Change
>>
Simple is Beautiful
>>
Conveying Personnel Evaluation Authority to Section Managers
>>
Leaders of Overseas Subsidiaries Determine Their Own Compensation <<
Start of a Full-fledged Associates system
>>
Where Company Members Dare to Ask Questions
>>
3-6.  Leaders of Overseas Subsidiaries Determine Their Own Compensation

  As another part of measures to transfer authority, I changed the system for determining the compensation for presidents of overseas subsidiaries in the same year (1996) to one where they themselves decide their remuneration.
  Until that time, each executive would apply for an amount and I would make the final decision. However, in the new system, they are paid as they request and I only hold the rights for personnel decisions involving leadership.

  There are many subtle issues in the relationship between the parent company and overseas subsidiaries. One question is whether the parent company can hold the final responsibility after transferring the authority for deciding compensation to the subsidiaries? Conversely, if this authority wasn't transferred, could the parent company still take full responsibility?
  Another question after authority is transferred is, "To what extent should the areas the parent company is currently concerned with be corrected?" Which decision holds the greater risk? The balance of these various issues have to be taken into consideration.
  If we return, for a moment, to a more simplistic situation and think about the issue, as the president, I have decided my own salary to date. I think that if a president isn't able to decide his/her own salary, he/she must not be able to do much.
  Are there not many companies in which the president doesn't have this authority? Yet the companies give them the authority to make decisions involving several millions of dollars, in some cases tens of millions of dollars.
  Why do companies act like misers regarding salaries? At the most, the difference will be several million yen. In fact, the difference may only be a couple hundred thousand yen. How can a president feel his/her work is important if not allowed to make such a decision as this?

  Presidents should be allowed to decide their own compensation to prevent them from creating an escape route. I therefore decided that the presidents of overseas subsidiaries would decide their own compensation based on the assumption that they will consider making an environment where they can enjoy their work, thus clarifying their responsibilities and authority.
  In essence, the same is also true with the transfer of authority to section managers. In fact, in the case of the Strawberry Corporation, the president decides his own compensation as well as that of all his company members from the point of responsibility in corporate administration.
  Each and every company member is a protagonist.

Previous Page Next Page

Home - Summary - Contents - Contents Plus - Download
Web Concept - Author - Contact Me - Endorsements - Voice Place
Page Up
Copyright (C) 1999 - 2002 Yuichi Kato All rights reserved.
Please send your comments and queries regarding this website to webmaster@optionmanagement.net