Olympus has fired its CEO and president, Michael Woodford, over differences with management and his apparent lack of understanding of the company's corporate culture.
In a statement released Friday, the Japanese camera and endoscope maker said: "Woodford has largely diverted from the rest of the management team in regard to management direction and method, and it is now causing problems for decision-making by the management team."
The Briton was named CEO only on Oct. 1, after assuming the role as president in April and becoming one of the few non-Japanese executives to run a large Japanese corporation. An Olympus employee for 30 years, Woodford said in a Reuters interview in May that he would cut jobs to achieve his mid-term cost targets and reverse a slump in earnings, while avoiding forced redundancies in Japan for cultural reasons.
In its statement, the company said Woodford was "unanimously" dismissed as CEO, but would retain his directorship until the position was voted upon at the next annual shareholder meeting. The company's chairman, Tsuyoshi Kikukawa, has assumed Woodford's previous roles as president and CEO. All changes were effective immediately.
"Olympus aims to implement management rules, information management and operation that are common throughout the world in order to establish a business infrastructure that is more efficient and quick to respond, while making the most of a Japanese style management that sets a high value on people, technology and pride of monozukuri or manufacturing.
"To this end, all our employees will head for the same direction as we will urgently start establishing a new structure to go towards the same goal with the entire staff as one," Olympus said.
According to a Reuters report, Kikukawa said at a news conference that the management team had looked to Woodford to execute decisions that would be "difficult for a Japanese executive to do". However, he noted that the Briton failed to understand the need to reflect a management style the company had built up since it was established 92 years ago, as well as Japanese culture.
The report also cited Koichi Ogawa, a chief portfolio manager at Daiwa SB investments, to say: "What exactly happened at Olympus is not clear, but personal differences among corporate managers happen everywhere, so his situation is not necessarily just because he was a foreign manager at a Japanese firm."
In an interview with Japan's British Chamber of Commerce, Woodford had acknowledged his confrontational management style while highlighting the difficulties of making change in the country's corporate culture. "I understand why Japan gets tagged with the 'unique' label; it's one of the most impenetrable cultures for outsiders," he said.
"Status quo is still very powerful in Japan. When you change something, you close something or withdraw something, you will get resistance based on my predecessor's decisions, especially when something is seen as sacrosanct or a holy cow," he added. "I can be opinionated, loud-mouthed, strong-headed and direct."
Olympus reported operating profit for the year, ended March, was US$460 million, down 41 percent from the previous year. Woodford was appointed CEO after being credited for successfully cutting costs at the company's European division.
Kikukawa had said of Woodford, during his CEO appointment: "The initiatives Michael has put in place to bring about change in the operations of our company have already had an extremely positive effect, and I've been particularly impressed by the way in which he has shown a great sensitivity and understanding of the different cultures across our global organization, and how these can be brought together in the most positive way for the company."