How Technology Giant Toshiba Failed?

Toshiba is a 150-year-old technology company that has made a name for itself not only in Japan, but also all over the world, with the work it has done since the day it was founded. The Japanese giant has been in the field of electronics and information technology systems for years. has innovated.

The dream of many children, Toshiba computers have been people’s most favorite computers for years. trusted and preferred It was one of the brands. However, the scandals in recent years brought the end of Toshiba.

Before moving on to how the Japanese technology giant collapsed, let’s take a look at its establishment and rise.

In the 1870s, Japan was a country that was trying to modernize and develop. The foundations of Toshiba were laid in these years. The Ministry of Engineering at the time required engineers and engineers to develop telegraph equipment. inventor Hisashige TanakaHe commissioned . Tanaka was founded in 1875 to keep up with increasing orders. Tanaka Seizo-sho(Tanaka Engineering Company).

Another founder of Toshiba, Ichisuke Fujioka, at a young age Japan’s first arc lamp He was a successful engineer. Increasingly improving himself, Fujioka started in 1890 to produce light bulbs. Hakunetsu-sha Co. Ltd.He founded . The bulbs produced significantly reduced Japan’s dependence on Europe and America.

The two firms pioneered the development of electrical equipment in Japan.

The name of the company after the death of Tanaka, who died in 1881 Shibaura Engineering Company was changed to. A name change also took place in Hakunetsu-sha in 1899 and the company was renamed Tokyo Denki it happened. The companies continued their work in the field of electricity without interruption until 1923.

The Great Kanto Earthquake of 1923 with a magnitude of 7.9 seriously affected both companies as it did all of Japan.

In this earthquake, where more than 100 thousand people died, Tokyo Denki lost most of its employees. While the wounds of this great disaster were slowly being healed, the Japanese government began preparations for the Second World War.

The country’s economic hardship put companies in a difficult situation. For this reason two companies in many fields started to cooperate.

By 1939, it was decided to merge with the name Tokyo Shibaura Denki.

Thus, Toshiba’s first steps were taken. Both companies had a common purpose. He is already was to become one of the world’s leading electrical machinery manufacturers. Many products have emerged with this partnership of two companies that have gained great experience in their respective fields.

Due to the increasing demand for household appliances in post-war Japan, the company turned its focus here. Developing successful strategies, the company from washing machine to kitchen appliances started to gain a big place in the Japanese market with many products.

Tokyo Shibaura Denki; was not only producing new products, but also developing new technologies.

The company, which has expanded its existing factories, has made great contributions to Japanese technology by turning these factories into R&D centers. With these steps, the company Sales and profit rates also increased rapidly..

After a period of 20-30 years with new products and technological steps, Tokyo Shibaura Denki, from the beginning of the 70s, started to open to the world market.

In 1984, the company’s official name was changed to “Toshiba”, a shortened form of Tokyo Shibaura Denki.

The rise of Toshiba, which entered the world market with electronic products in the 80s, continued with its innovations in the field of information systems. In a short time It has made its name among the world’s leading technology brands.

Toshiba, not only because its products have the latest generation technological features, Ergonomically designed and robust It has become a preferred brand because of its

Wanting to be even more successful, Toshiba decided to keep up with the developing and changing technology.

He expanded his business network by focusing most of his resources on semiconductors and computers. Company, In 1985 it produced the world’s first laptop personal computer.

However, in the 1990s, economic crises began to occur in Japan.

Toshiba has also developed various strategies to minimize this situation. One of them was the in-house company system. The purpose of this system is to provide more autonomy to established companies. to make decisions faster.

This developed strategy enabled Toshiba to have a very successful period from the early 2000s to 2014.

The company has opened up to the whole world with the quality products it produces. With the developing technology positioning in the growing market for started working with growing sectors and emerging businesses. The company has played to the top in a competitive environment with its technology and products.

Until 2015 that is…

As with any successful company, there were sometimes difficult times at Toshiba. However, in 2015 accounting scandalcaused the beginning of the period of collapse of the company.

The foundations of the scandal in 2015 to the 2008 global financial crisis is based. The company had made risky investments to fix its failing economy. However, as interest rates fell, the value of these investments also fell and a worse picture emerged.

We, the company, to the world and to investors we are in good shape, no problem image He wanted to give. For this reason, misleading financial reports were presented to investors by showing profit rates higher than they were in various transactions. Following the revelation of the scandal, Toshiba’s stock fell and the market value of the company decreased drastically.

The Japanese financial regulator, the FSA, launched an investigation to ascertain the extent of the scandal. As a result of the investigation, Toshiba’s full It was determined that he was hiding a profit of $ 1.2 billion. Company officials who want to minimize the effects of the scandal $2.7 billion compensation It tried to cover the losses of the shareholders by making a payment decision. After this incident, the executives of the company resigned.

Trying to get through this difficult period somehow, Toshiba faced new crises in the following years.

Carrying out studies in many fields such as informatics, technology and health, Toshiba also carried out studies in the nuclear field. Another reason for the crisis in 2015 is that after the nuclear accident in Fukushima in 2011, the company’s huge losses in the nuclear business unit was to live.

Trying to erase the traces of the accounting scandal, the company went bankrupt in 2017 after Westinghouse Electric, its subsidiary that manages nuclear power businesses in the United States. second blow from the same place it has been eaten.

Built in Westinghouse Electric, South Carolina Error in cost calculations of two nuclear power plants announced that he did. This statement caused the cost of the projects to increase by approximately 10 billion dollars.

With Westinghouse Electric’s bankruptcy statement, which could not afford such a large amount, Toshiba’s approximate A huge loss of $6.3 billion was thought to have suffered. The company, which did not disclose any net loss, announced on April 6, 2018 that Westinghouse was sold for $ 4.6 billion.

The Japanese technology giant, which wanted to recover after successive blows, began to sell many of its parts.

One of the biggest of these sales is memory to cover the damage of the nuclear scandal in 2017. was the sale of 20% of the chip division. Various steps continued to be taken to recover until 2020.

However, on top of the economic problems caused by the pandemic in 2020, a Chinese investment fund’s desire to establish a partnership made things more difficult. The Chinese investment fund wanted to invest in the company’s nuclear power division. This situation, homeland security It caused concern and caused a great reaction.

After the backlash, the entire nuclear division of Toshiba was transferred to a Japan-based investment fund, and the nuclear business was completely closed for the company.

However, the problems did not end in 2021 and 2022. The management of the company received great reactions from both the public, the government and investors after these events. Can’t stand the pressures anymore officials resignedcompany continued to sell some parts.

Today, Toshiba still operates in many sectors. Although the accounting and nuclear scandal, problems in management, damaged the company’s reputation considerably. reconstruction efforts continues.

In this context, according to the news on March 24, 2023, the giant technology company was founded by Japan Industrial Partners, a private equity firm based in Japan. 15 billion dollars will be purchased in return. Although it has not been finalized yet, both Japan Industrial Partners and Toshiba executives agree that this decision to save Toshiba thinks it’s enough.

You can find more detailed information about the process of Toshiba’s sale from our content below.