Posted: May 25th, 2022

The Toshiba Networking Case Study

Toshiba Networking Case Study

Toshiba: How Personal Networking Can Be Used to Avoid High-Turnover

Electronics giant Toshiba Corp.’s American business unit is facing a class-action lawsuit over how it pays and promotes women. (6), (7)

Recently, the law firm Sanford Wittels & Heisler brought a $100 million gender discrimination lawsuit in federal court in Manhattan on behalf of a potential class of 8,000 women working for Toshiba in the U.S. Ibid.

Sanford Wittels earlier represented the class of litigants in a long-standing case against Novartis’s U.S. unit by women in its sales force. The lawsuit settled for $175 million in July, 2010, following a $253 million jury verdict. Supra.

The lawsuit alleges that Toshiba America Inc. with regularity regularly fails to pay women equal salaries and bonuses, intentional segregates women into lower pay-grade positions and shows favoritism to men for promotion. Elaine Cyhers, a human resources manager in the Toshiba’s U.S. nuclear power business, is the lead plaintiff. She is currently on a leave of absence. Supra.

A Toshiba spokesman would not comment.

The complaint comes just months before the U.S. Supreme Court is expected to hear argument in a 2001 discrimination case on behalf of as many as 1.5 million female employees at Wal-Mart Stores Inc. Supra.

My hypothesis is that Toshiba could have avoided this lawsuit and the attendant bad publicity if it had engaged in personal networking communications with its employees, i.e., (a) originating; (b) dialoguing; (c) exercising; and (d) implementing.

Main Body

Electronics giant Toshiba Corp.’s American business unit is facing a class-action lawsuit over how it pays and promotes women. (6), (7)

Recently, the law firm Sanford Wittels & Heisler brought a $100 million gender discrimination lawsuit in federal court in Manhattan on behalf of a potential class of 8,000 women working for Toshiba in the U.S. Ibid.

Sanford Wittels earlier represented the class of litigants in a long-standing case against Novartis’s U.S. unit by women in its sales force. The lawsuit settled for $175 million in July, 2010, following a $253 million jury verdict. Supra.

The lawsuit alleges that Toshiba America Inc. with regularity regularly fails to pay women equal salaries and bonuses, intentional segregates women into lower pay-grade positions and shows favoritism to men for promotion. Elaine Cyhers, a human resources manager in the Toshiba’s U.S. nuclear power business, is the lead plaintiff. She is currently on a leave of absence. Supra.

A Toshiba spokesman would not comment.

The complaint comes just months before the U.S. Supreme Court is expected to hear argument in a 2001 discrimination case on behalf of as many as 1.5 million female employees at Wal-Mart Stores Inc. Supra.

My hypothesis is that Toshiba could have avoided this lawsuit and the attendant bad publicity if it had engaged in personal networking communications with its employees, i.e., (a) originating; (b) dialoguing; (c) exercising; and (d) implementing.

Let’s examine some of the areas of personal networking and how Toshiba could have used them to avoid this negative outcome, i.e., the lawsuit for hundreds of millions of dollars.

(a) Originating

For originating, we first have to identify who the stakeholders are in the organization. For Toshiba, there are clearly workers, management, customers, and shareholders who are all stakeholders. However, when defining the stakeholders, the management forgot to designate male and female workers. Female workers felt left out of the personal networks among workers and management and having good personal networks in place would have benefitted the company enormously.

A personal network is a collection of human contacts known to an individual, with whom that individual would interact at regular intervals to support certain activities.

Some say that the Pawel Zorzan Personal Network is an excellent example of a personal network: http://www.pawelzorzan.eu

Personal networks are generally mutually beneficial — extending the concept of teamwork beyond the immediate peer group. The phrase is most often encountered in the workplace.

Personal networking involves developing and maintaining a personal network, which is usually undertaken over an extended period of time.

Personal networking is generally encouraged by large organizations, with the aim of improving productivity, and so a number of tools exist to support the maintenance of networks. Many of these tools are IT-based, and use of Internet technologies.

Toshiba is known to have extensive personal networking groups. (1) But, at least according to this lawsuit, women did not benefit from them.

(b) Dialoging

Dialoguing is a kind of general communications technique used to establish what is going on in a given situation. Ideally, it goes two ways; both the facilitator and client are working on finding out what the subject really is. They are both seeing and working themselves closer to understanding the true controversy. Clearly, based on the facts alleged in the lawsuits, Toshiba did not use its vaunted dialoging techniques to discover any originating conflicts that interfered with the perceived effectiveness of the personal networks established by the firm.

(c) Exercising

Clearly, Toshiba could have used a number of well-established exercises to make sure its dialoging with female employees was working well. For example, executives could have insisted that the use of stilted language be avoided when discussing the problem of lower pay and lower performance grade expectations for female employees, instead of hiding, as they apparently did, behind obfuscating language. They should also have addressed any filters that were interfering with effectively seeing the conflict for what it was. They could have also encourage female employees to develop an exposition — a narrative — explaining how they felt they were not being treated fairly and equally. This would have solved a number of problems.

(d) Implementing.

Lastly, if Toshiba had implemented the above-cited techniques, of dialoguing and exercising, etc., they would have avoided, most likely, the lawsuit.

PROPOSED SOLUTION TO CURE TOSHIBA’S PROBLEM OF HIGH-TURNOVER

Clearly, Toshiba’s problems with lack of networking contributed to its high turnover, dissatisfaction of female employees, and, ultimately, the present lawsuit. Our proposed solution for this problem follows up on the guidelines discussed by a former Toshiba human resources executive, who was recently quoted in the press. (8)

A. Conduct A Retention Survey

According to Michael Lenzner, managing partner of The Lenzner Solution, a human resources consultancy, it is first a good idea to survey employees to gage what issues are important to them and what will make them stay with an employer for the long-term.

“Companies will see what the going rate is in order the attract, retain and motivate their employees,” said Lenzner.

Lenzner has 25 years of experience as a human resources manager, including Toshiba.

While working for those companies, he repeatedly needed to verify that the wages paid by employers were actually competitive. Most employers simply don’t know what their competition is doing. “I wanted to understand the current trends and I wanted to know if employee turnover was related to pay and benefits,” he said.

The information becomes a critical learning tool for employers like Toshiba, Lenzner said, because the regional job market is always affected by new developments.

B. Integrate Women’s Concerns into Toshiba’s Personal Networking System

Dialoguing is a kind of general communications technique used to establish what is going on in a given situation. Ideally, it goes two ways; both the facilitator and client are working on finding out what the subject really is. They are both seeing and working themselves closer to understanding the true controversy. Clearly, based on the facts alleged in the lawsuits, Toshiba did not use its vaunted dialoging techniques to discover any originating conflicts that interfered with the perceived effectiveness of the personal networks established by the firm.

COMPARISON WITH FAST FOOD CHAINS

Toshiba could also have learned a lot about worker retention from fast food chains. Fast food operators are starting to see improvement in their famously high turnover rates. Back in the 1990s, the average fast-food restaurant replaced its entire staff twice a year. The revolving door, with mounting recruiting and training costs, dampened earnings. The average Burger King, for instance, has just $1.1 million in sales each year.But, the bill for training each of its new-hires runs to $800. (9)

Thanks partly to new benefits, like a 401 (k) program for workers, Burger King reduced its turnover rate to 210%, from 223%. Pizza Hut brought its turnover down from 147% in 1997 to about 120% in 2000.

Burger King found out that having a retirement plan in place was important to its worker retention as a result of networking, personally, with employees, and dialoging with them.

According to Peter Oakes, a restaurant analyst at Merrill Lynch, reducing turnover results in lower training costs, better service and better control of the entire labor expense item. If companies are able to get their hands around labor that in turn improves earnings visibility which is what Wall Street wants. Supra.

This finding is in synch with what Peter Drucker wrote decades ago when he said that “harmonizing employment security” should be a top goal of senior management of any firm looking for long-term growth. (5)

REFERENCES

1. Knowledge works: Managing intellectual capital at Toshiba, WM Fruin, 1997,

Japan Business and Economic Series

2. Apologies and public relations crises at Chrysler, Toshiba, and Volvo

KM Hearit – Public Relations Review, 1994 — Elsevier

3. The art of Japanese management, RT Pascale – Business Horizons, 1981

4. Does Japanese management style have a message for American managers?, EH Schein – Societal Culture and Management, 1993

5. What We Can Learn From Japanese Management, Peter F. Drucker, Harvard Business Review, March-April, 1971

6. Toshiba U.S. Business Sued Over Pay, Promotions Of Women, Class Action News, http://www.workplacefairness.org/class-action-news

7. Toshiba U.S. Business Sued Over Pay Of Women, The Wall Street Journal, http://blogs.wsj.com/law/2011/01/31/toshiba-us-business-sued-over-pay-promotions-of-women/

8. Local survey aimed at attracting workers: Dozens of area firms plan to take part, 9:50 AM, Feb. 20, 2011, http://www.stargazette.com/article/20110220/NEWS01/102200328/Local-survey-aimed-attracting-workers?odyssey=tab|topnews|text|FRONTPAGE

9. Fast Food Careers, Kellogg Graduate School of Business Online Forum, http://www.kelloggforum.org/fast-food-careers/

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