Mitsubishi Electric is one of the world’s largest industrial electronics companies. The firm conducts its business through six business segments: energy and electric systems, industrial automation systems, information and communication systems, electronic devices, home appliances, and others. Mitsubishi Electric offers a range of products, from security systems to circuit breakers to air conditioners. In the fiscal year ending March 2007, the company employed over 102,000 workers and recorded sales of over $30 billion. Based in Tokyo, Japan, Mitsubishi Electric operates primarily in Japan with overseas business in Europe, Asia-Pacific, and the Americas.
Mitsubishi Electric is most commonly associated with the Mitsubishi group of companies, one of Japan’s largest corporate groups. Member firms of the Japanese corporate groups have been credited with playing a major role in Japan’s economic development. Despite its prominence as a leading integrated industrial electronics manufacturer, however, the Mitsubishi Electric name is not widely recognized beyond Japan. This is largely because Mitsubishi Electric has grown much more from a national rather than international base—and still derives most of its business from the Japanese market.
Mitsubishi Electric evolved out of the Mitsubishi shipping business founded by Yataro Iwasaki in the late 19th century. This shipping business developed into a family-owned conglomerate (zaibatsu) in the years up to World War I, as the company diversified into coal mining, shipbuilding, and electrical equipment. Mitsubishi Electric itself was spun off in 1921 as an independent company.
The firm grew rapidly during the interwar years, mainly through imports of technology from foreign firms. Perhaps most prominent was Mitsubishi Electric’s alliance with the American electrical firm, Westinghouse Electric, in 1923. As might be observed from Toshiba’s alliance with General Electric or NEC’s alliance with ITT, it was a time when Japanese firms tried to develop their own modern industries by learning from Western firms. Building upon foreign knowledge, Mitsubishi Electric produced its first hydraulic generator in 1924, followed by an elevator in 1931, and an escalator in 1935. By 1937, the firm had listed on the Tokyo Stock Exchange.
Like many zaibatsu firms at the time, Mitsubishi Electric began to provide supplies for the Japanese military during World War II. As a result, the firm’s operations were suspended during the Allied occupation of Japan between 1945 and 1952. But Mitsubishi Electric reemerged after the occupation as part of a more loosely affiliated group of firms that featured interlocking shareholdings and were centered around a main bank (keiretsu).
Much like the interwar years, Mitsubishi Electric rebuilt its postwar business through technology imports from foreign firms. In fact, many of these imports were based on relationships formed in the prewar era. Over the 1950s and 1960s, the firm launched its first television, computer, and domestic satellite. Equipped with a strong product range, Mitsubishi Electric then began to expand into overseas markets, such as the United States, Britain, and Germany. The firm also began to collaborate with foreign firms to codevelop and distribute original products. These included projects with leading global firms such as AT&T, Westinghouse, and Siemens.
Mitsubishi Electric is unique among the former zaibatsu firms in its continued business of military procurement. The firm has been a major provider of Japan’s Self Defense Forces, in products such as avionics and radars—which has been useful in developing civilian industrial products such as for air traffic management.
Mitsubishi Electric struggled to adjust to competitive pressures stemming from globalization and the information technology revolution in the 1990s. The firm still featured many traditional characteristics of Japanese business, such as lifetime employment and consensus-based decision making. Facing a new business environment that demands greater flexibility and swift responses, Mitsubishi Electric has been pushed to reform.
Mitsubishi Electric faces intense competition from domestic firms such as Hitachi and Toshiba as well as foreign firms such as Schneider and Solectron. Rising raw material prices have also placed a burden on the firm’s finances. The company’s future lies in its ability to capitalize on its research strengths and diversified product range and expand further into global markets.
- Mitsuru Kodama, “Innovation and Knowledge Creation Through Leadership-based Strategic Community: Case Study on High-Tech Company in Japan,” Technovation (v.27/3, 2007);
- Mitsubishi Electric, Mitsuishi Denki Shashi [A History of Mitsubishi Electric] (Mitsubishi Electric, 1982);
- Sol W. Sanders, Mitsubishi Electric (Penguin Books, 1996);
- Takeuchi, Mitsubishi Denki Henshin no Himitsu [The Secret Behind the Transformation of Mitsubishi Electric] (Nihon Keizai Tsushinsha, 1980).
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