Case Study Description of Toshiba: Accounting Fraud
In July 2015, the chief executive officer of Toshiba Corporation (Toshiba) resigned over the revelation of a JPA¥151.8 billion accounting scandal that shocked the world. Toshiba, a Japanese multinational conglomerate with net sales of JPA¥6.5 trillion and total assets of A¥6.2 trillion, had been widely criticized in the news for the multi-billion-dollar accounting fraud. The company's stock prices declined by 38 per cent after the accounting probe was announced, and the company withdrew the dividend that had been declared earlier. These setbacks challenged company investors, who had always regarded Toshiba as a reputable company. The investors were wondering the same thing as everyone else watching the scandal unfold: How could a company with a 140-year history do this, and why? What were the consequences? What should Toshiba do in response to this crisis? Anupam Mehta is affiliated with Institute of Management Technology, Dubai.
Swot Analysis of "Toshiba: Accounting Fraud" written by Anupam Mehta includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Toshiba Jpa facing as an external strategic factors. Some of the topics covered in Toshiba: Accounting Fraud case study are - Strategic Management Strategies, Crisis communication, Ethics, Professional transitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Toshiba: Accounting Fraud casestudy better are - – geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, wage bills are increasing,
talent flight as more people leaving formal jobs, increasing energy prices, etc
Introduction to SWOT Analysis of Toshiba: Accounting Fraud
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Toshiba: Accounting Fraud case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Toshiba Jpa, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Toshiba Jpa operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Toshiba: Accounting Fraud can be done for the following purposes –
1. Strategic planning using facts provided in Toshiba: Accounting Fraud case study
2. Improving business portfolio management of Toshiba Jpa
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Toshiba Jpa
Strengths Toshiba: Accounting Fraud | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Toshiba Jpa in Toshiba: Accounting Fraud Harvard Business Review case study are -
Sustainable margins compare to other players in Finance & Accounting industry
– Toshiba: Accounting Fraud firm has clearly differentiated products in the market place. This has enabled Toshiba Jpa to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Toshiba Jpa to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Toshiba: Accounting Fraud Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to recruit top talent
– Toshiba Jpa is one of the leading recruiters in the industry. Managers in the Toshiba: Accounting Fraud are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Toshiba Jpa
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Toshiba Jpa does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Toshiba Jpa in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Toshiba Jpa has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Toshiba: Accounting Fraud - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Toshiba Jpa has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Toshiba Jpa to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Toshiba Jpa are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Strong track record of project management
– Toshiba Jpa is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Toshiba Jpa is one of the most innovative firm in sector. Manager in Toshiba: Accounting Fraud Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Toshiba Jpa is present in almost all the verticals within the industry. This has provided firm in Toshiba: Accounting Fraud case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Learning organization
- Toshiba Jpa is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Toshiba Jpa is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Toshiba: Accounting Fraud Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Toshiba: Accounting Fraud | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Toshiba: Accounting Fraud are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Toshiba: Accounting Fraud, in the dynamic environment Toshiba Jpa has struggled to respond to the nimble upstart competition. Toshiba Jpa has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Toshiba: Accounting Fraud, is just above the industry average. Toshiba Jpa needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Toshiba Jpa needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Toshiba Jpa supply chain. Even after few cautionary changes mentioned in the HBR case study - Toshiba: Accounting Fraud, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Toshiba Jpa vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Toshiba Jpa is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Toshiba Jpa needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Toshiba Jpa to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Toshiba Jpa products
– To increase the profitability and margins on the products, Toshiba Jpa needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Toshiba Jpa is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Toshiba: Accounting Fraud can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Toshiba Jpa has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Toshiba Jpa even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Need for greater diversity
– Toshiba Jpa has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Aligning sales with marketing
– It come across in the case study Toshiba: Accounting Fraud that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Toshiba: Accounting Fraud can leverage the sales team experience to cultivate customer relationships as Toshiba Jpa is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Toshiba: Accounting Fraud HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Toshiba Jpa has relatively successful track record of launching new products.
Opportunities Toshiba: Accounting Fraud | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Toshiba: Accounting Fraud are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Toshiba Jpa can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Toshiba Jpa can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Leveraging digital technologies
– Toshiba Jpa can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Toshiba Jpa in the consumer business. Now Toshiba Jpa can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Toshiba Jpa to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Toshiba Jpa to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Toshiba Jpa to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Toshiba Jpa can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Toshiba: Accounting Fraud, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Toshiba Jpa to increase its market reach. Toshiba Jpa will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Toshiba Jpa to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Toshiba Jpa can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Toshiba Jpa can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Low interest rates
– Even though inflation is raising its head in most developed economies, Toshiba Jpa can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Toshiba Jpa in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Toshiba Jpa can use these opportunities to build new business models that can help the communities that Toshiba Jpa operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Threats Toshiba: Accounting Fraud External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Toshiba: Accounting Fraud are -
Shortening product life cycle
– it is one of the major threat that Toshiba Jpa is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Toshiba Jpa demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Toshiba Jpa can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Toshiba: Accounting Fraud .
High dependence on third party suppliers
– Toshiba Jpa high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Toshiba Jpa needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Toshiba: Accounting Fraud, Toshiba Jpa may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Stagnating economy with rate increase
– Toshiba Jpa can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Toshiba Jpa.
Technology acceleration in Forth Industrial Revolution
– Toshiba Jpa has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Toshiba Jpa needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Toshiba Jpa in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing wage structure of Toshiba Jpa
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Toshiba Jpa.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of Toshiba: Accounting Fraud Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Toshiba: Accounting Fraud needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Toshiba: Accounting Fraud is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Toshiba: Accounting Fraud is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Toshiba: Accounting Fraud is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Toshiba Jpa needs to make to build a sustainable competitive advantage.