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Toshiba history and background
Toshiba traces its origin back to 1875 in Japan when it started as a simple Information Communication Technology Company. However, the company, as we know it today, was incorporated in the year 1938 when it became a merger of two existing companies. It was named Toshiba in 1978 after several affiliates merged to form one big company in the year 1977. The name Toshiba is a nickname and an abbreviation of Tokyo Shibaura Electric. The company, since then, has grown to be a great and respectable brand among the Japanese known electronic products. It has also received major global recognition due to its quality products, and ideal services it offers (Ando & Gallagher, 2015). Toshiba Company has been the cream of all electronic companies in the region and their products are widely regarded in the world market.

In its organization, Toshiba is organized into four business sections. These sections are:

  1. Digital Products Group
  2. Electronic Devices Group
  3. Home Appliances Group
  4. Social Infrastructure Group

These four sub sections work in tandem to promote the company’s brand and to ensure that international customers get a variety of these products. These brands have been in existence for quite some time, and this has made it possible for the consumers to be satisfied and comfortable.  Having started as an engineering company, it has vast and broad experience in provision of ideal and quality services and products (Ando & Gallagher, 2015). [“Write my essay for me?” Get help here.]

By 1977, Toshiba had acquired and bought several other companies, making it one of the strongest companies in the world able to compete with other companies in the same industry such as Samsung, LG and Sony. The company has been strong and has stood up well despite the small challenges it experienced until the major scandal that hit it in the year 2015 (Shimura et al, 2016).

Toshiba is responsible for the existence of some impeccable products such as radar (1912), the first color video game, transistor television and many types of laptops. This has seen the company grow to be one of the best electronic companies in the Asian market. As of January 2012, the company had almost 250,000 employees worldwide. They also have managed to have branches in over 100 countries which help them in marketing and actual selling of their world-adored products.

2015 Accounting Scandal
Since its inception in 1938, Toshiba has never experienced a major fraud case or any other major misdemeanor that would greatly affect its reputation. However, in 2015, the company announced that it was investigating an accounting scandal that lost close to $1.1 billion from the company. It was reported that Toshiba wanted to mark down the profits that it has made in the past three years. This consequentially led to the resignation of its CEO Hisao Tanaka in July 2015. In his resignation speech, Tanaka termed the fraud as the most damaging in the company’s140 year-old history. This also led to the resignation of its other 8 officials (Ando & Gallagher, 2015). The consequences of this fraud were first experienced in September 2015 when the sales received a major drawback in more than five years. The sales fell by more than $8billion compared to such a time in the previous year. However, in May 2016, the company announced its return to normality with Satoshi Tsunakawa as its new CEO (Mochizuki et al, 2016).[Need an essay writing service? Find help here.]

Background of the Scandal
This scandal was followed by a string of losses in the following months due to the impact of the information. According to researchers in Japan, the problem stemmed from the company’s employee who understood the cost of the long term projects. This was followed by the company overstating operation profits by $1.2 since 2008-2014. This was something that showed that the senior management was not aware of the fraud and how it happened.

Secondly, the blame of the fraud would partially go to the two former CEOs.  It is said, according to reports, Toshiba CEOs immense pressure on subordinates to meet the company’s targets, and also meet the 2008 global recession. According to the reports, this intense pressure made employees to forgo the losses and forward the sales reports to meet the recession target. It seems, this mistake which was done cumulatively made the problem worse than it would have been at first (Hong & Snell, 2015).[Need an essay writing service? Find help here.]

Another problem associated with this fraud within Toshiba Company is the differences between the senior officials of the company.  For instance, Mr. Nishida who was the head of Toshiba computer division, and Mr. Sasaki from the Toshiba power business were rivals and they literally disliked one another (Hong & Snell, 2015). However, they both resigned after the fraud and it is said that they could have. Differences between leaders can cause problems to the company as loopholes can be created in between.

Toshiba 2015 scandal again has been associated with lack of proper corporate governance in Japan. However, Japanese Prime Minister then Shinzo Abe laid up measures that were meant to revive the Japanese economy which had started to shrink affecting major companies such as Toshiba. This problem having affected Hitachi, it also touched a part of the Toshiba Company (Hong & Snell, 2015).

At first, the problem did not seem major when first it was announced in 2015. Having overstated the profit in 2014 fiscal year, the company was expected to run smoothly until they announced that they were experiencing accounting problems. The abrupt changes in the management and prompt resignation from senior management team showed that there was a ready step to be taken to save the company from falling (Hong & Snell, 2015).  The company withdrew dividends that it would have shared during that time. The company who has more than 400000 shareholders was worried of losing some of the shareholders in the company.

By the end of this year, the company may show some signs of revival, but it is not until they change their way of profit analysis. Since the announcement of the fraud, in 2015, its home –appliances and electronics has not made any profit due to the impact of the information. Since the announcement, some rival companies such as Hitachi have taken advantage of the market to shun off Toshiba’s products. Another affected part is that of the shares. Toshiba shares dropped drastically since April, 2015 although these share has been gaining momentum sequentially (Hong & Snell, 2015). [Click Essay Writer to order your essay]

Today Toshiba has recorded a great improvement compared to such a time last year. The reason as to why this improvement has been noted is by the fact that management has changed from the way it was during the 2014 fiscal year. Secondly, tight measures have been taken to ensure that the company has been able to rise again to where it used to be. To please their customers and shareholders once again, the company has been able to give quality products; a step that is intended to win the consumer’s trust once again (Shimura et al, 2016).


Ando, R., Gallagher C. (2015). Toshiba Cancel Dividend, Pulls Outlook in Accounting
Scandal. Reuters. 

Hong, J. F., & Snell, R. S. (2015). Knowledge development through co-opetition: A case study of a Japanese foreign subsidiary and its local suppliers. Journal of World  Business50(4), 769-780.

Michizuki, T., Fukase, A. (2016) Toshiba announces new Chief Executive After accounting
Scandal. Wall Street Journal. 

Shimura, N., Yagisawa, T., & Makabe, T. (2016). Effect of a momentum-transfer scattering  at inelastic collisions on the electron transport II: Case study in Ar. Bulletin of the  American Physical Society.

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By Hanna Robinson

Hanna has won numerous writing awards. She specializes in academic writing, copywriting, business plans and resumes. After graduating from the Comosun College's journalism program, she went on to work at community newspapers throughout Atlantic Canada, before embarking on her freelancing journey.

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