1. - Building an Enterprise-wide Management Platform with BSC -
“The BTMU Approach”
July 12 2007, Boston
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Kyota Omori, Managing Director, CEO for the Americas
Takehiko Nagumo, Senior Manager, Corporate Planning Division

2. Contents
Company Profile
BSC History at BTMU
The BTMU Approach:
Visioning
1.
Framing
2.
Implementing
3.
Learning
4.
2

3. The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Representative Nobuo Kuroyanagi
Stock Holder Mitsubishi UFJ Financial Group, Inc. (MUFG)
Market Cap (MUFG) JPY 13,576 billion
Capital Stock (BTMU) JPY 996,973 million
Date of Establishment August 25, 1919
Number of Employees 52,978 (consolidated base)
Number of Branches Japan: 1,008, Overseas: 412 (inc. UBOC)
(As of March 31, 2007) 3

4. BTMU Global Network
Domestic Branch Network Overseas Branch Network
East Japan
Retail: 354
Corporate: 171
24
West Japan
323 Americas
525
Retail: 187 EMEA
43
Union Bank
Corporate: 97 22
of California
(UBOC)
199 Asia and Oceania
284
Central Japan
Retail: 131
Corporate: 68
Domestic Branches Total: 1,008 Overseas Branches Total: 412
（As of March 31, 2007） 4

5. Organizational Structure and BSC Scope
【Organizational Structure】
【BSC Scope】
Layer 1: Enterprise Strategy Map Top Management
Layer 1: Enterprise Strategy Map Top Management
Retail Corporate Global Operations
Global Corporate
Banking Banking Markets
Layer 2: BU-Level BSC & Systems
Layer 2: BU-Level BSC
BU Center
BU BU Unit BU
UNBC Group
Regional HQs
Corp & Invest
Commercial
Transaction
Layer 3: HQ-Level BSC
Layer 3: HQ-Level BSC
（Except UNBC）
Divisions/ Divisions/ Divisions/ Divisions/
Layer 4: Division/Branch BSC
Layer 4: Division/Branch BSC Divisions Divisions
Branches Branches Branches Centers
Employees
Layer 5: Personnel Scorecard
Layer 5: Personnel Scorecard
5

6. Business Portfolio
(MUFG Consolidated base) 6

7. Evolutional Stages of BSC at BTMU
Phase 1 Phase 3
Phase 2 Phase 4
（Jul. 2001～Jun. 200） （Jul. 2004～Dec. 2004）
Phase
（Jan. 2006～Current）
（Jan. 2005～Dec. 2005）
“New Concept:
“Enterprise-Wide
“Implementing BSC “BSC for Pre/Post-
BSC Meets CSR”
BSC Introduction” Merger Integration”
at BTM Americas”
•• Corporate governance •• Performance Evaluation •• Sharing new mission, •• Employee participation
Corporate governance Performance Evaluation Sharing new mission, Employee participation
(BU accountability) vision, and strategy in strategic planning
(BU accountability) vision, and strategy in strategic planning
Focus
•• Communication b/w and execution process
Communication b/w and execution process
Japanese and non- •• Building a common plat- •• Cultural integration
Japanese and non- Building a common plat- Cultural integration
Japanese employees form for strategic •• Emphasis on society
Japanese employees form for strategic Emphasis on society
management and environment
management and environment
•• CFT approach
CFT approach
•• How to cascade -- •• How to visualize •• Linkage to employee •• Improving incentive
How to cascade How to visualize Linkage to employee Improving incentive
Challenges
top down vs. bottom up strategy to employees MBO process system
top down vs. bottom up strategy to employees MBO process system
•• Integrating COSO •• Setting bank-wide •• Reducing # of metrics •• Integrating various CS
Integrating COSO Setting bank-wide Reducing # of metrics Integrating various CS
framework into BSC common objectives ES processes to BSC
framework into BSC common objectives ES processes to BSC
7

8. FRAME IMPLEMENT LEARN
VISION
CSR Concept as the Essence of Management Philosophy
Economy
Shareholders
Local
Customers
Community
BTMU
Employees Environment
Government
Society Environment
- “Together with our stakeholders,
we aim for a harmonious and prosperous world,
and we will do our utmost to help create a sustainable society.”
8

9. FRAME IMPLEMENT LEARN
VISION
Growth with “Customer First” and “Locally Driven” Attitude
Sustainable Growth via “Spiral Up”
Sustainable Growth via “Spiral Up”
Future
Future
Needs
Needs Customer
Customer
Delight
Delight
Potential
Potential
Needs
Needs Customer
Customer
Appreciation
Appreciation
Recognized
Recognized
Needs
Needs Customer
Customer
Acceptance
Acceptance
Customer Satisfaction Employee Satisfaction
- “Customer first” and “locally driven.”
“It is my desire to foster a corporate culture that is truly
powered at the local level.”
9

10. FRAME IMPLEMENT LEARN
VISION
Management Emphasis on Compliance and Risk Management
Public’s Trust & Confidence Corporate Value
Credit Strategy
Risk Risk
Governance Framework
Legal & Regulatory Operational
Risk Risk
Systemic Risk Market Risk People Risk
Settlement Crisis Information /
Reputational Ethical Risk Money
Risk Management Security
Risk Data Laundering
Country Risk
Liquidity Risk
- “We will comply strictly with all laws and regulations and conduct
our business in a fair and transparent manner to gain the public’s
trust and confidence.”
- “We will seek to inspire the trust of our shareholders by enhancing
corporate value through…..appropriate risk management….”
10

11. FRAME IMPLEMENT LEARN
VISION
Define Strategic Framework / Process Using Strategy Map
quot;GLOBAL TOP 5quot; Position
Improve B/S Structure
Grow Revenue
【Corporate Social Responsibilities】
【Customer Value Proposition】 Improve Capital
Reduce Costs
Efficiency
No.1 Service No.1 Reliability No.1 Global Coverage
Brand Image Voice of
External CS Management
【CUSTOMER】 【SOCIETY】
Score Stakeholders
Score Sat. Score
External Customer Internal Customer
Local Community
Satisfaction Satisfaction
Environment
Initiative Business Line (Retail, Corp., Overseas) (Mgmt, Business, Subs.）
【Compliance & Risk Management】
Evaluation Sat. Score
Value Creation Value Protection
OPERATION
RM PO Regulatory
Branch Office Internal &
ISO9001/14001 Governance Framwork
Exam. Results External Audit
Audit & Exam. Marketing Strategy
Sat. Score Compliance & Ethics
IB Cross-sell
Operational
Channel Strategy Internal Control
Mkt Products
Quality
Crossborder Deal Info. Security Mgmt
Settle. Products
CSA／RSA SOX 404
& Productivity Risk & Crisis Mgmt,
Business Model,
IT Products, etc.
etc.
【Employee Engagement】 etc.
Score Test Results
Employees & Org. Culture Mgmt Infrastructure & IT
Employee Opinion Poll Info. Security
Compliance
BIS II
Employee Sat. Communication Capital Allocation
Sat. Score Results Capability Building Performance Mgmt Strategic ALM IT Governance Test Results
Check List
Work Environment Carrier Design, etc. HR System CRM System, etc.
Strategy Formulation Strategy Execution Strategy Review
Strategy Formulation Strategy Execution Strategy Review
（P） （D） （CA）
（P） （D） （CA）
SWOT Analysis, 5 Forces Analysis, etc.
SWOT Analysis, 5 Forces Analysis, etc.
11

12. FRAME IMPLEMENT LEARN
VISION
Align CSR Initiatives and Activities to Strategy
Balanced Scorecard
CSR Objectives CSR Domains
CSR Stakeholders
Plan Do Check Act
CSR Initiatives
Value Creation
Customers
Customer Value
Customer Satisfaction / ISO9001
Continuous Improvement
Proposition Shareholders
Performance Monitoring
Employees
Strategic Planning
Diversity Employee Satisfaction Survey
Community
Social Local Community Support
Contribution Environment
Collaboration with NPO/NGO
Environment Government
ISO14001
NPO / NGO
Information
Privacy Protection / ISO27001
Security
Value Protection
Developing
Countries
SOX 404 / J-SOX
Disclosure
Rating Agencies
COSO Control Self-Assessment
Internal Control Mass Media
Etc.
Compliance Program
Compliance
Corporate Culture
12

13. FRAME IMPLEMENT LEARN
VISION
Establish Enterprise-wide BSC Management System
Achieving “Global 5” Position thru Sustainable Value Creation
Achieving “Global 5” Position thru Sustainable Value Creation
(BSC Management System)
Balanced Objective Setting Common Platform Alignment
Balanced Objective Setting Common Platform Alignment
Balance short-term financial Utilize BSC as the enterprise- Align both organization and
Balance short-term financial Utilize BSC as the enterprise- Align both organization and
objective and long-term wide common platform for individual employees toward
objective and long-term wide common platform for individual employees toward
non-financial objective strategic communication and strategy by logically cascading
non-financial objective strategic communication and strategy by logically cascading
performance evaluation strategy via the BSC
performance evaluation strategy via the BSC
Balance offence and defense
Balance offence and defense
Visualize how everyone’s
Balance communication b/w Visualize how everyone’s
Balance communication b/w
daily activities contribute
HQ functions and branches daily activities contribute
HQ functions and branches
to Implementation of the
to Implementation of the
Corporate/Business Strategy
Corporate/Business Strategy
MUFG Group Management Philosophy
MUFG Group Management Philosophy
13

14. FRAME IMPLEMENT LEARN
VISION
It is not “Top Down” or “Bottom Up.” It is the both.
Integrated Business Strategy Formulation
Integrated Business Strategy Formulation
Enterprise
BU
BOTTOM UP: Ownership
TOP DOWN: Cascading
BOTTOM UP
Business Business Scale
Portfolio Model Economy
Division/Branch Top Management Vision Meets Operational Activities
Employee
Empowerment: “Customer
Professionalism
“Locally Driven” First”
Office/Group
Individual
CS/ES-Driven Strategy Execution
CS/ES-Driven Strategy Execution
14

15. FRAME IMPLEMENT LEARN
VISION
Culture Matters
Japanese Companies American Companies
Defined
Vague Mission and Vision
Grand Design
Incremental Strategy Formulation Process
Differentiation / Uniqueness
Operational Efficiency Competitive Edge
Bottom Up
Top Down
Decision Making
(or Middle-Up-Down)
Explicit / Verbal / Open
Implicit / Nonverbal / Closed Communication Style
Outcome Orientation
Process Orientation Performance Evaluation
Diversified Culture /
Single Culture / Cooperative Work culture
Competitive
15
Adapted from “Essence of Failure,” by I. Nonaka

16. FRAME IMPLEMENT LEARN
VISION
“Cool Head” and “Warm Heart”
Planning Division
WARM
COOL
Planning & Coordination Group CSR Promotion Office BSC Line
Planning & Coordination Group CSR Promotion Office BSC Line
Traditional strategic planning role: Cross-functional support role:
Traditional strategic planning role: Cross-functional support role:
strategic alignment best practice sharing
strategic alignment best practice sharing
objective setting facilitation and training
objective setting facilitation and training
performance evaluation benchmarking
performance evaluation benchmarking
88members from Planning & Coordination 23 members from various BUs and divisions
members from Planning & Coordination 23 members from various BUs and divisions
Group. e.g. retail banking, corporate banking,
Group. e.g. retail banking, corporate banking,
global banking, operations, HR, etc.
global banking, operations, HR, etc.
Top Down Bottom Up
16

17. FRAME IMPLEMENT LEARN
VISION
Share the BSC Experience – Closing the Loop
17

18. FRAME IMPLEMENT LEARN
VISION
Training – Practice Makes Perfect
18

19. FRAME IMPLEMENT LEARN
VISION
Communicate! Communicate! Communicate!!
Newsletters
Industry Periodicals
Major Newspaper
19

20. FRAME IMPLEMENT LEARN
VISION
Business Lines Evaluate Support Function Performance
Executive Management
Management Satisfaction Survey
Corporate Center
Branch Opinion Survey
BU Satisfaction Survey
Business Unit
BU HQ Functions Branch Offices
Branch Opinion Survey
20

21. FRAME IMPLEMENT LEARN
VISION
Some Results
• Pre-and Post-Merger Integration:
– Effectively used the BSC as the pre-and post-merger integration tool upon the
merger between former BTM and UFJ.
– Achieved successful operations and systems integration without facing any major
failure or breakdowns.
• Enterprise-wide Alignment:
– Implemented the BSC globally as the enterprise-wide common platform for
strategic communication and performance evaluation, emphasizing “balance.”
– Linked strategy to individual employees cascading through 5 organizational layers.
• Development of the first of the kind BSC approaches:
– Uniquely integrated top down and bottom up approaches.
– Linked to compliance and risk management, e.g. CSA.
– Integrated CSR concept and ISO9001 Quality Management System into the BSC.
– Devised innovative objective setting method: “Common,” “Shared,” and “Unique.”
21

22. FRAME IMPLEMENT LEARN
VISION
Vision for the Next Stage
BSC (Strategy Articulation & Communication)
Top Down
Management-Led Change
Leadership
CS CD
Autonomous Change
(Customer Satisfaction) (Customer Delight)
Evolution
Evolution Six Sigma
ISO9001
ES EE
(Employee Satisfaction) (Employee Engagement)
Empowerment
⇒
BSC Capability Leadership Capability Bottom Up
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23. THANK YOU
Quality for You
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