Is Sony Turning Around?

The year 2009 saw the pioneer of the world’s consumer electronics, Sony group reporting its first operating loss in 14 years. They prided themselves in their unique innovative technology and focus on high quality. Yet their premium-priced products did not accommodate the changing needs of the consumers for more innovative cost-effective ideas adopted by their competitors. Isolation from the technology of the rest of the world and insistence on their own Sony technology led to the isolation from the rest of the world, or galaponi-zation as referred by the Japanese. The re-structuring efforts of the company while maintaining its tradition is a challenging task ahead.

The journey of Sony from the year 1946 to year 2009 has been a study of its own. The internal resistance to the change played a big role in shaping the future of the Sony. The different business divisions and the concept of “company within company” under Norio Ohga worked well for improving the margins of the respective divisions but failed in realizing the goals of the company in the long-run. Its stringent technology measures to support their own technology in every product and service made them inflexible in the eyes of consumers. For e.g. the sony mp3 required conversion of the media files; downloading of the music  from the contract websites only; slow in catching up with the LCD technology are a few examples of  Sony’s excessive pride in their own technology. The insider system is also another major hurdle to the re-structural efforts of the company. The company has a long history of all Japanese CEOs and the too-many board members prohibited company’s move from growth and efficiency.

The company hired a new non-Japanese leader, Howard Stringer for re-structuring. He is made the head of US. Stringer faced dilemma between the American vision for results and Japanese worship for tradition. He is also faced with the dilemma of improving the communication between the different business divisions and the division heads. The problem of lack of communication was so huge that it affected the relationship of Sony with other players as Dell, Toshiba. Another problem in front of Stringer was the proud veterans and engineers. There was no coordination among the employees; the senior engineers were arrogant and not gave the due credit to the leader.

The future of the Sony is very blur if they don’t adapt as Apple and Samsung. The changing needs of the customers have to be understood. The organization needs to be flexible for the employees as well for the customers. The Japanese conglomerate may be out of competition if they don’t incorporate the changes while maintaining their legacy.  The legacy may not come into a rescue unless the need to preserve it does not urge.

CULTURAL IMPLICATIONS:

As Sony fall behind the global competition, it’s time for certain serious re-structuring by Stringer. Stringer faced the dilemma of striking balance between the American and Japanese vision. As a non-Japanese leader, it was more difficult to win the confidence of the employees. The communication process was another major hurdle. While American believes in frank communication; the Japanese didn’t believe in communication at all. Stringer will face strong internal resistance from the employees. They may also perceive it as a threat to their legacy.

OVERCOME INTERNAL BARRIERS:

Stringer should focus on improving the coordination among different business divisions so that the problem of television and audio speakers mismatch does not occur again.

The communication process should be made more transparent.

The employees should be rotated from different divisions and countries to learn the cultural aspects better.

COMPETITIVE POSITION:

Stringer should define the focus of the company. The mission and the vision of the company should be revised.

Incorporate the technology around the world quicker; delay will give an advantage to other players.

 Another Japanese conglomerate around the same timeline is Toyota. Toyota is known for the distinguished culture practices at its workplace. They have been able to incorporate change elements and be flexible unlike Sony. This uniqueness made them successful globally. Although they are in different business areas; Sony can take lessons from Toyota to bring change and be adaptable.