Search

This paper examines the relationship between management functions and the profits thus generated in Murata Manufacturing Co.,Ltd. The fabrication sector (manufacturing subsidiary) acquires the factory’s profits in this company through internal transfer pricing, while the headquarters,which includes R&D, keeps its own profits. The capital investment economic calculation (return on investment and collection period) was considered from the perspective of capital investment because the achievement of the fabrication sector was evaluated in the creation of the factory’s profits. Capital investment is managed through an economic calculation of capital investment in this company. However, problems have occurred from the return on investment and the collection period because of the company’s large-scale capital investment after fiscal year 2015. In addition, a new index of R&D efficiency (headquarters’ pofits/research and development spending) was used as performance metrics for the R&D section. R&D efficiency has declined in this company on the edge of fiscal year 2015, in fiscal year 2016 and in fiscal year 2017. This is because the headquarters’ profits decreased due to increased manufacturing costs because of the large-scale capital investment in fiscal years 2015 and 2017, reduced gross profits, and a drop also in the gross operating profit. Thus, trends in capital investment influence R&D efficiency.