Back to Previous Page
   
 
March 20, 2006

Omron Leaps into 4th Place in Nikkei Corporate Excellence Ranking!

Omron recently ranked 4th place in the 2005 Nikkei Corporate Excellence Ranking, based on the
Nikkei-developed PRISM research method. Omron’s 4th place ranking was an impressive improvement over its 37th place ranking in the previous year. PRISM (Private Sector Multi Evaluation System) is a multifaceted corporate evaluation system jointly developed by the Nihon Keizai Shimbun (Nikkei) newspaper and Nikkei Research. This year, the research rated 1,033 companies who responded to questionnaires sent to a total of 2,185 leading companies in Japan. Companies that were rated highly in overall ranking generally had well-balanced scores for social responsibility and R&D capabilities in addition to excellent earnings.

In terms of scores for the four evaluation criteria – (1) flexibility and social responsibility, (2) earnings and growth potential, (3) research and development; and (4) youthfulness –, Omron received good scores overall with an especially high score in “flexibility and social responsibility,” the factor that evaluates a company’s CSR commitment and practices. This pushed Omron’s overall ranking up to 4th place although its score for “earnings and growth potential” was relatively low.
  
     
   
     
  PRISM
PRISM is a system designed to determine the relative strength of companies by evaluating not only
quantitative financial data but also qualitative data such as fulfillment of social responsibility. Evaluation models are created around four factors – flexibility and social responsibility, earnings and growth potential, research and development, and youthfulness. Companies that are determined by experts to be leaders in these areas are then ranked numerically according to the scores given for survey results and financial statements.

Evaluation method
[Evaluation factors and key performance indicators]
(1) Flexibility and social responsibility
Twenty-one indicators including social contribution, risk management, compliance with laws/regulations, customer response, and globalization
   
(2) Earnings and growth potential
Ten indicators including ordinary income, ROE, ordinary income growth, average increase in net sales, and net sales relative to cash flow from operating activities
   
(3) Research and development
Nine indicators including R&D expenses relative to net sales, proportion of R&D personnel, patent application status, and intellectual property
   
(4) Youthfulness
Nine indicators including the lowest age for promotion to manager status, proportion of female managers, and proportion of mid-career recruits

[Overall evaluation by experts]
Besides the four evaluation factors outlined above, 121 companies are selected from among those
subject to ranking, to undergo three additional evaluations by experts. To fully reflect the evaluation by experts in overall scores, four evaluation factors are weighted using a statistical technique.

(1) General evaluation by press reporters
62 members of the Nikkei Shimbun newspaper rate selected companies on a five-point scale.
   
(2) General evaluation by experts
60 key figures in various fields rate selected companies on a five-point scale.
   
(3) Evaluation of corporate executives by press reporters
110 members of the Nikkei Shimbun newspaper evaluate the strength of corporate executives on a five-point scale for three aspects including decision-making, foresight, and international sensibility.