TOKYO: Some 20 percent of major Japanese companies have no medium-term management plans that show profit and other targets in three to five years’ time, a survey by Jiji Press has shown.

The survey also found that about 10 percent of companies with medium-term plans are considering changing the duration of their plans or making other reviews.

The results suggest that some Japanese companies now aim to respond more flexibly to changes in the business environment so as to surely achieve long-term goals after experiencing sharp currency fluctuations, heightened geopolitical risks and other major environmental shifts over a period of several years.

The survey was conducted in June, covering 70 major domestic companies. Of them, 48 gave answers.

Among the respondents, e-commerce firm Rakuten Group Inc., securities house Nomura Holdings Inc., chemical maker Resonac Holdings Corp. and six other firms said they had no medium-term management plans.

Announcing plans that each cover only around three years is “meaningless,” an official of Resonac Holdings, formerly Showa Denko K.K., said.

Meanwhile, many surveyed companies had long-term management plans covering about 10 years.

In April, trading house Itochu Corp. decided to stop compiling medium-term management plans. In explaining the decision, the company said it would be forced to make changes to such plans if the economic situation deviates from its assumptions.

Food maker Ajinomoto Co. also abolished medium-term plans, saying that focusing excessively on planned figures could strain operations and eventually diminish the implications of having such plans in place.

Among the 39 companies with medium-term plans, five indicated that they would continue to compile such plans but would review their planning strategies.

Admitting that predicting future economic conditions is challenging, retailer Seven & i Holdings Co. said that it is comprehensively examining whether it should continue to devise medium-term plans, what would be the appropriate duration of business plans and how it should operate such plans.

Cosmetics maker Shiseido Co., whose current medium-term plan covers a three-year period, said the plan’s duration may fluctuate depending on business performances and other factors.

“We will review and operate the plans according to the needs, in response to inflation and geopolitical risks,” Shiseido said.

Meanwhile, Tokio Marine & Nichido Fire Insurance Co. said that it devises medium-term management plans “to clarify priority strategies and schemes to be worked on over three years and to steadily implement them.” Many other companies with such plans also gave similar explanations.

Shipping firm Mitsui O.S.K. Lines Ltd. shows the “ideal image” of itself for fiscal 2035 and stacks up three to five-year plans to achieve it. Similar approaches are being taken by many other firms.

Electronics and machinery maker Toshiba Corp. announced its three-year management plan in May, after getting delisted from the Tokyo Stock Exchange, stressing that the plan is aimed at putting the company back on a growth path.

Of the 39 firms that have devised medium-term business plans, 35 companies, including electronic device maker Kyocera Corp. and trading house Sumitomo Corp., have disclosed them, while precision equipment maker Canon Inc., Mitsubishi UFJ Morgan Stanley Securities Co. and two other companies have kept their plans undisclosed.

JIJI Press