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.