In a public ousting rare in staid corporate Japan, Olympus on Friday demoted its British chief executive, Michael C. Woodford, after only six months in the job, citing a management culture clash with the company’s mainly Japanese executive team.
“We hoped that he could do things that would be difficult for a Japanese executive to do,” Olympus’s chairman, Tsuyoshi Kikukawa, said at a news conference. “But he was unable to understand that we need to reflect a management style we have built up in our 92 years as a company, as well as Japanese culture.”
Shares in the company, based here, lost nearly a fifth of their value after Olympus said its board had voted to strip Mr. Woodford, 51, of his positions as chief executive and president.
Mr. Woodford, a 30-year Olympus veteran, had turned around the company’s European operations through aggressive cost-cutting and was gearing up to do the same across the Japanese parent company.
But Mr. Kikukawa, who had preceded him as chief executive, indicated that Mr. Woodford had gone too far. He complained that Mr. Woodford would often bypass the heads of company divisions to give orders directly to the rank and file.
Mr. Woodford “ignored our organizational structure and made decisions entirely on his own judgment,” Mr. Kikukawa said. “I told him repeatedly he couldn’t do that, but he didn’t listen.”
The company said Mr. Woodford would remain a board member, but one without voting rights, until the annual shareholders’ meeting next year, when a new slate of directors will be presented.
Mr. Woodford could not be reached for comment.
It is a swift reversal of fortune for Mr. Woodford, who leapfrogged scores of more likely candidates to clinch the top job in February, making him one of a handful of foreigners to run a large Japanese corporation. Others, who have more successfully navigated the cultural shoals, include Howard Stringer, the Welsh-born American chief executive of Sony; Carlos Ghosn, the Lebanese-Brazilian president of Nissan Motor; and Craig Naylor, an American who runs Nippon Sheet Glass.
Even rarer than Mr. Woodford’s outsider status, though, was his swift dismissal. Japanese companies often keep their top executives in place even when the company is losing money.
At the time of Mr. Woodford’s appointment, Mr. Kikukawa had given him a glowing public review, describing his loyalty to Olympus as “above the rest.” Mr. Woodford was also presented as the new global face of a company, like many others in Japan, that has increasingly looked overseas to make up for a shrinking market at home.
But in a sign of the headwinds he encountered at Olympus, Mr. Woodford, in an interview published recently, described the difficulties of navigating Japan’s closed corporate culture.
“I understand why Japan gets tagged with the ‘unique’ label; it’s one of the most impenetrable cultures for outsiders,” he said in the magazine of the British Chamber of Commerce in Japan.
“Status quo is still very powerful in Japan,” he continued in the interview. “When you change something, you close something or withdraw from something, you will get resistance based on my predecessor’s decisions, especially when something is seen as sacrosanct or a holy cow.”
Mr. Woodford had taken the helm at Olympus at a tough time. In the year ending last March, net profit at Olympus plunged 85 percent from the previous year, to 7.4 billion yen (about $95 million), as losses at its camera division weighed on the company’s profitable medical equipment business. The camera division lost 15 billion yen, a performance Mr. Woodford had called “unacceptable.”
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