Nidek: Excessive performance pressure and staff shortage behind quality fraud

An investigative report investigating Nidek's quality fraud revealed that strong performance pressure was distorting not only the accounting department but also the manufacturing floor. In some bases, there were cases in which fraud was ordered by top management or repeated over a long period of time.

At a press conference on the 4th, attorney Toshihiko Itami, chairman of the investigative committee, said of the more than 800 cases of fraud that had been identified, ``Some of them had been incorporated into business operations over a long period of time, and had been repeated or continued.It is extremely serious that acts of this scale were revealed in quality assurance, which is at the core of the manufacturing industry.''

According to the report, the company's founder, Shigenobu Nagamori, and other executives set high performance targets for employees every year. Operating income of less than 10% was considered to be in the red, and bases that did not meet the target were subject to severe reprimands.

The falsification continued even after the person in charge changed.

Some bases tried to bridge the gap between their lofty goals and their capabilities through rationalization measures. The more we make changes to materials and processes to reduce costs, the more we will need to conduct new tests and provide explanations to customers. However, the number of staff in the corresponding quality assurance department was also on the decline. As a result, dealing with customers and rectifying fraud were put on the back burner.

Typical examples of fraud cited by the investigation committee include the use of materials different from those agreed with the customer and the falsification of test data. These incidents were perpetuated by on-site decisions and continued even when the person in charge was replaced, resulting in an organizational structure that allowed the fraud to persist.