the productivity of SEI's work force increased significantly during the 1950s, so management adopted the total budget system. this system was integrated into SEI's existing productivity system. the TBS remained relatively unchanged until the mid-1960s, when the firm adopted a divisional form
SEI's divisional structure differed from that adopted by most Japanese firms. In SEI, the divisions were politically weaker and lacked full autonomy. For example, both finance and personnel were centralized functions and were managed at headquarters. The primary purpose of the divisions was to maximize their profits based upon the limited resources at their disposal. Senior management at SEI had decided against divisional autonomy because it believed that such an organizational form would encourage the divisions to maximize their own economic welfare and not that of the overall firm. By keeping certain critical functions centralized, top management believed it was better able to optimize overall firm performance. The cost of this organizational form was a larger head office staff than was usual for a japanese firm of SEI's size.