Cummins Japan 2012

Abstract

Cummins Japan, Ltd. (hereafter Cummins Japan) was founded in 2002 through a merger between the old Komatsu Manufacturing (now Komatsu) and Cummins Inc. (hereafter Cummins U.S. headquarters). The organization’s culture contains elements of both its predecessors, with each unit operating differently. Coinciding with an increase in employees’ average years at the company and average age, there is growing concern over how to revitalize the organization and cultivate young talent, but due to the effect of the Great East Japan Earthquake of March 2011, Cummins Japan recorded its highest-ever sales of $80 million in FY 2011. The effect of the disaster provided a one-time stimulus, but the Cummins U.S. headquarters has set new targets even higher than the all-time high sales. In addition, Cummins Japan is in a period of organizational expansion, and as the business grows more complex, the inconsistency of each unit’s rules and performance bonus plans has led to a substantial issue of sub-optimization. In this context, this case considers the challenges and possible solutions in Cummins Japan’s present human resources and organizational management issues, drawing on thinking from multiple perspectives based on surveys of long-term employees and employees who joined mid-career from other firms.

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