Share this story
Close X
Switch to Desktop Site


Ariyoshi Kondo may be the busiest executive in the Toshiba Corporation today. The phone on his desk rings constantly. Written inquiries arrive one after another. They all ask the same question: ``May we export this product to the Soviet Union?''

Mr. Kondo heads the company's new strategic product control division.

About these ads

In the aftermath of the disclosure last year of the illegal export of sensitive machine tools to the Soviet Union by its subsidiary, Toshiba Machine Corporation, the electronic giant quickly adopted a new export-control program as part of its efforts to tame the anti-Toshiba sentiment in the United States Congress.

``We set up the program which won't allow a drop of water to leak out,'' company president Joichi Aoi said.

Toshiba's strategic products control program, commonly called the compliance program, is touted by the Ministry of International Trade and Industry as a model for other Japanese companies to follow. Toshiba also ordered its 325 subsidiaries to set up a similar programs.

Toshiba's compliance program is probably more stringent than those of most US companies. All 71,000 employees have been put through a brief educational program on the rules of Cocom, the Coordinating Committee for Export Control, and salespeople are being given a more extensive course. The company has totally computerized a procedure to check the strategic status of each product.

According to Kondo, the division put together a strategic-products table, which divides the company's 200,000 products and 400,000 parts into eight levels depending on their strategic sensitivity. Simultaneously, customers were divided into three categories, the preferred, questionable, and denied. When the serial numbers of a certain product and customer are punched in, the computer analyzes the combination and determines whether the sale is appropriate.

Borderline cases, according to Kondo, are sent to his strategic control division for judgment. ``Because there are quite a few borderline cases,'' he continued, ``my staff and I have to make numbers of judgments daily.''

Not only the exports but also domestic sales must comply with the program. ``We want to make sure what we sold to domestic customers will not end up being exported to socialist countries,'' declared Sakae Shimizu, managing director of the strategic product control division.

About these ads

When Toshiba published the program, other Japanese companies eagerly snapped up all 13,000 copies.

Despite Toshiba's ``model'' status, many Japanese companies express skepticism about the need for such an extensive program to control exports of strategic products.

``I don't believe the export-control system itself needs to be so complicated and thorough,'' asserted Seiji Igarashi, spokesman for NEC Corporation, another major electronics manufacturer in Japan. ``The real key lies in implementation. No matter how thorough you make the system, it will be meaningless if not implemented properly.''

Mr. Igarashi said such a rigorous system as Toshiba's simply costs too much and does not necessarily work effectively. ``The only way to prevent the recurrence of the Toshiba Machine incident is to cultivate the awareness of employees about the security aspect of their business, especially among the salespeople,'' Igarashi said.

Costly as it may be, it is certainly not too expensive for Toshiba. The company is in danger of losing the group's annual 420 billion yen (about $3.4 billion) in exports to the US if Congress approves a Senate-passed amendment to an omnibus trade bill, which would ban all Toshiba exports to the US for up to five years. The House version limits sanctions to Toshiba Machine.

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.