5 TOSHIBA CORPORATION Business Reorganization As the business environment becomes ever more demanding and less forgiving, Toshiba is determined to devise an operational frame- work that provides management direction for the overall Group, while supporting individual businesses facing different circumstances and different requirements. A comprehensive review of our operations has made it clear that the time constraints, business cycles and particular demands that our in-house companies face are growing increasingly diverse. In response, we have adopted a four-fold approach to reor- ganization: the integration of in-house companies with Group companies, complete autonomy where it will enhance efficiency, full independence to pursue alliances and collaboration with other com- panies, and freedom to adopt a particular management style or organization to reinforce strength and operations. As a result of this approach, the Display Devices & Components Com- pany, e-Solutions Company, Medical Systems Company and Home Appliances Company have all been spun off and integrated with Group companies, and are now developing new operating structures. Introducing Business Groups As already noted, Toshiba needs an organization that provides a clear direction. To that we must add the need for faster, more reso- lute decision-making. In pursuit of this, our structural reforms include the establishment of business groups that bring together those operations with similar time constraints and growth rates. Each group comprises several in-house companies and Group com- panies, and will develop the management approach best suited to its businesses. As a result of the above measures, the pace of management deci- sion-making will be significantly accelerated and the management TO OUR SHAREHOLDERS