Sonys Short Term Objectives Business Essay
A. Company Background and Overview………………………………………………………………4-6
1. History and development, key milestones
2. Overview of industry, market, product and services
3. Major issues that have impacted the organization for past 3 years
4. Organization’s culture, values, history and development influenced leadership management and OB
B. Company leadership, Management, and OB Analysis…………………………………………..7-12
2. Analyzing organization and management using
a. vision, values and mission
b. goals, objectives, and overall strategy
c. competitive strategy and advantage
3. Other issues……………………………………………………………………………………….13 -15
a. Organizational international strategy
b .Power centralization in the organization and internal politics
c. Main communication processes
d. Importance of being learning an organization
e. Policy in handling ethical issues
C. Major strengths and weaknesses of the company’s leadership, management &0B……….15
D. Recommendations for improvement……………………………………………………………16
In this report I have done a critical analysis of Sony Corporation in terms of leadership, management and people, organizational behavior. Sony is one of the major global conglomerates in the electronics segment. Sony’s brand name and its unique customer service hold Sony in its prominent place. Report analyzes the Organization behavior in terms of leadership and management towards the company’s effectiveness and success.
Sony had a great skill in the human resource management. Sony considers for the growth of company it is necessary to motivate, enhance and encourage the personal growth of employees. Sony is offering different employee training programmes including general training, onsite training and e-learning to attain its Objectives.
As it is evident that, every successful business structure must have a strong leadership and motivated workforce with a win-win relationship. As per the TQM structure, each and every employee of the organization must be involved in the Management process. And If we consider the Basic management thoughts like Taylor’s Scientific management, Functional management approach of Henry Fayol and the Human Relationship approach of Elton Meyo etc, we can find that the basic foundation of Sony corporation is a optimized mix of these management thoughts along with the innovative and competitive Technologies.
It is also analyzed and found that one of the strongest pillars of the Success of Sony Corporation is its Organizational structure and the delegation of Authority backed by a balanced decentralization of power. The line of information flow is very scientific within the corporation eliminating all chances of ambiguity and interference, backed by a very modern and strong communication system.
Regarding the most significant weak point in the business management in Sony Corporation, it is found that Sony Corporation is not very through in the selection of its market segmentation and the demographic analysis of its consumers. Its product development process was not properly backed by a scientific market research and hence it is strongly recommended that Sony should produce innovative products in the core market to maintain its leadership market and also should take consumer’s feedback and conduct market research and analysis very effectively to cope up with the fast changing consumer world. And last but not the least, Sony should minimize risk in the networking to their current and potential users and should focus their resources on creating better security systems.
A) COMPANY BACK GROUND AND OVERVIEW
1. History and development and major milestones
Sony laid its foundation in 1946 after World War II by Masaru Ibuka (Engineer) as a electronic shop in a bomb damaged department store building at Tokyo, Japan. He started his store with capital of $530 and 8 employees. In 1947 Akio Morita (Physicist) joined with Ibuka. As a result
With the strong determination and hard work of two young enterprises a company which repairs and builds electronic equipments was started. They registered their company as Tokyo
Telecommunications Engineering Corporation with a number of 20 passionate and committed groups of employees and a equivalent yen of 190,000.Company was moved to southern Tokyo and released its first consumer product rice cooker which was a commercial failure, in the first commercial year the company came up with a profit of $300.The main objective of the company was to design and develop innovative products which would benefit the people.
Launched magnetic tape recorder
Started to use Sony logo on Totsuko products
Launched transistor radios
Company name was changed to Sony corporation
Sony was established in US
Sony became 1st Japanese company to offer shares in New York stock exchange
Smallest all transistor TV was launched
Sony building was opened in Gimza (Tokyo)
A 50-50 joint venture with CBS
¾ inch U matic color video cassette player
Sony receives first Emmy ever award for developing triniton TV
Launch of TPS L-2 the first stereo player "walkman"
50-50 joint venture with prudential Insurance Co of America and renamed Sony Pruco Life Insurance Co ltd
First CD player launched
New corporate organization model introduced
High definition video system
Portable CD player was launched
Launch of consumer use still camera
Launch of "Handy cam"
Launch of 36 inch consumer use television
Digital handy cam was launched
Sony communication network corporation established
Launch of digital still in "cyber shot"
Home use pc "VAIO" series launched
Launch of super audio CD players
Launch of entertainment "aibo" robot
Sony Ericsson mobile communications established
Corporate shift to "committee" base organizational model
Sony developed new 4K SXRD high resolution LCD panel
Launch of smallest HD video camera records
Sony and Samsung reach agreement on manufacturing TFT LCD panels at their joint venture
World’s first Blu – ray type notebook (VAIO) type A released
Relocates headquarters to new building "Sony city"
Sony groups new brand message "Make Believe"
Sony introduces cyber shot
Sony introduces internet TV
http://www.sony.net/SonyInfo/CorporateInfo/History/ (Viewed on 19-8-2012)
2. OVERVIEW OF THE INDUSTRY, MARKETS, PRODUCTS AND SERVICES
Sony Corporation is the one of the major conglomerate which designs, develops, manufactures and sells electronic equipments for all the markets such as consumers, professional as well as industrial. It offers a wide range of consumer products and services such as televisions, Blu-ray disc, Players, Recorders, Home theatres, Home audio system, DVD audio system players, Interchangeable single lens cameras ,Mobile phones and personal computers. Company is known widely for its audio visual products such as BRAVIA@ 3D LCD HDTV, BRAVIA@ LCD HDTV, BRAVIA@ LCD high definition television, Sony internet TV with Google TV. Other than manufacturing Sony also Provide gaming solutions, segment of motion pictures, segment consists of music recording business based on Sony Music entertainment and Japan based Sony entertainment inc and Sony financials
Most of the Sony profit is from its core business electronics sector.
Link: http://www.sony.com/SCA/index.shtml (viewed on 23-08-2012)
3 .Major issues that affected the organization in past 3 years
Sony corporation and Panasonic corporation announces joint development of next
generation OLED panels for TVs/large sized displays.
Patter voice technologies files Colorado patent information lawsuit against Sony
Sharp corporation and Sony amends agreement regarding JV to produce and sells large sized LCD panels and modules
Sony corporation establishes new management structure
Sony complies acquisition Sony Ericssion mobile communications AB from telephone AB LM Ericssion
Sony corporation forms a new business alliances with Samsung electronics
4. Organization’s culture, values, history and development influenced leadership, management, and OB
Sony Corporation has a unique culture which is firmly rooted in the history especially in relationship to two founders, Masaru Ibuka and Akio Morita. Both gave insights and visions in what the company should be and how it should be made. Ibuka especially gave constant advice and suggestions to the engineers involved in projects earlier transistor radios to walkmans, the strategy in which Sony operates under the top management, especially Ibuka, Morita and Ohga gave general direction in which the lower engineers actively learned developed and improved on the vision /idea. Therefore although there is planned direction the actual product development through launching is emergent with flexibility.
Organizational culture is transferred from one generation of employees to another as a collection of beliefs, expectations and values shared by organizational members. The culture is transferred through different ways such as messages (implicit and explicit), organizational philosophy, design of physical space and teaching by leaders.
B) COMPANY LEADERSHIP, MANAGEMENT, OB ANALYSIS
Sir Howard stringer was the CEO of the company till February 2012.He had been chairman and headed Sony overseeing the entire business. He was in Cardiff, Wales. He emigrated to US in 1965, and drafted into US army during the Vietnam War. Stringer became a naturalized citizen in 1985 and now holds dual UK/US citizenships. His younger brother, Rob stringer was chairman of Sony music label group in 1978.Stringer married Jennifer A Kindmon Patterson. They have two children. He attended Oundle School in Northampton shire and received a Masters of Arts from the University of Oxford in modern history. He was knighted by Queen Elizabeth II. He had a 30 year career at CBS where he was a journalist, producer and senior executive. He served as a
president of CBS from 1988 to 1995, where he was responsible for all the broadcast activities of its entertainment, news, sports, radio and television. Howard was the CEO and chairman of tele TV after leaving CBS.1n 2005 he was appointed in Sony. Howard stringer was also served as chairman of the American film institute boards and trustees. Howard stringer was a recipient of
Several awards for his leadership and media entertainment such as Emmy award, Humanitarian award and Visionary award.
Sir Howard Stringer was a transformational leader who is unafraid to takle up a traditionally bounded company.
Howard stringer was a recipient of numerous media and philanthropic awards -"Visionary award" which was awarded for his innovative leadership and media entertainment.
b. Values and attitudes
He is very hardworking, open minded and honest with a great sense of integrity.
All of those can be identified from his simple philosophy of Howard stringer "whatever job you have, enjoy it .Do as well as you can, and don’t think about the next job. If you work really hard everything else will take care of itself".
Reference :( Sony family magazine 2005)
Stringer was a managing, creative and technical business man.E.g: People handled by Stringer in Sony was literally as well as figuratively not speaking the same language even though he got them together through his "Sony united" strategy.
d. Style and behavioral characteristics
Howard Stringer’s style is developed from his childhood as his father was a Air force officer. His style of leadership includes approaching people directly and treating people with respect.
He was moved to 15 schools by the age of 18 by following his father. Wherever he goes he made relationships. He says:"If you don’t reach out people, you would be lonely"
(Los angles Times December 1993)
e. Key skills
Stringer was a skill full operator who understands how organizations operates as dynamic human systems which have to be manipulated to achieve the corporate goals
He had a skill to adapt to new environments. Eg: As a child by the age of 18 he had moved to 15 different places by following his father Air force officer.
Skill to learn people to make to get them collaborate and find consensus among many different views
Howard Stringer is a hand on leader and manager. He meets his leadership team usually and go over the issues and operations. He believes that rather than working alone the decisions will be more powerful if we work as a team.
"You have to create a team that can accomplish far more than you ever think you could alone" (Sony magazine)
h. Major reasons for success
His brainpower, creativity, and business acumen and his ability to inspire and activate people those survival instincts learned as a child set him apart from others. This Several factors define his successful career as a manger and leader.
i. Major potential weaknesses that could lead to failure
Howard Stringer was a self determined person which can lead a reason for his failure .Eg: As he took over a company which had a huge back loss.
2. Describe and analyze the organization and management using the following attributes
a. Vision, values and mission
"To create exciting new digitals entertainment experience for consumers by bringing together cutting- edge products with latest generation content and services".
"Sony is committed to developing a wide range of innovative products and multimedia services that challenge the way consumer’s access and enjoy digital entertainment. By
Ensuring synergy between businesses within the organization Sony is striving to create existing new worlds of entertainment that can be experienced on a variety of different products"
b. Goals, Objectives and Overall Strategy
Sony has several goals and objectives introduced in the company from time to time
Long term Objectives are:
Sony’s long term goal is to achieve zero carbon by 2050
E.g: BRAVIA range of TV’s introduced by 2010 had a strong focus on eco credentials.
2. To be the leading provider in the electronic and to maintain its core market segment by develops groundbreaking products, services and technologies.
Sony's Short term objectives are:
Corporate strategy of Sony announced by new CEO Kazuo Hirari as of 2012 is "One Sony" a new management approach to accelerate all the decision making in the entire company. This includes 5 initiatives.
1. To strengthen the core business areas in the market
2. Target to rebuild the television segment to the growing and ever changing technology market.
3. To expand the business in the emerging markets.
4. Creating the new business and accelerating innovation.
5. Realizing the business portfolio and optimizing resources.
c. Competitive Strategy and advantage
Sony had a intense competition in each segment of it product lines throughout the world. Sony competes with all the competitors and has a major position in all of the product lines. In Electronics sector its product planning and product design expertise, the high quality of its products, its record of innovative product introductions and product improvements, its price competitiveness derived from reductions in manufacturing and indirect costs, and its extensive marketing and servicing efforts are important factors which maintains Sony in the market. Sony’s
main competitive advantage is to bring miniaturization to its product, and to ensure that technologists, engineers, marketers have a shared understanding of customer needs and of Technological possibilities in order to become more customer-orientated with the aim to increase competitive advantage.
Sony has a strong well build structure. An integrated new management was introduced in the company under the leadership of new CEO Kazuo to accelerate the decision making in the entire unit. And new top management team includes Masaru Kato, Tadashi Saito (chief strategy officer).The new structure is aimed at driving growth to create the new value. The company operates in 5 sectors includes electronics, games, entertainment, financial services and others.
(Reference: Sony Annual Report 2012)
Sony is one of the major organizations which has rooted and follows the Japanese management styles with a special view on collectivism and hierarchy. Hierarchy: Sony maintains a lot of respect among sub-ordinates in regard to their superiors. In relation to collectivism all the employees in the company see themselves a part of the family. Morita stated that "Management
is not dictatorship" so as to maintain good relationship between management and the employees managers meet the subordinates regularly.
Some of the major management techniques are:
Providing in-house training to managers to attain its goals and objectives
Including consensual and decentralized decision-making to be globalized
Use of extensive quality control methods.
carefully codified work standards
Maintaining a harmonious relations among workers
Seniority based compensation and lifetime employment
It is important to note that these are generalizations according to a conventional formula. There have always been variations, and, as noted above, some aspects of these practices have been increasingly reconsidered in recent years.
Risk Management system
System which is established to review, communicate and evaluate the risk that the company is facing in the business areas on a regular basis. The risk management system is managed and maintained by The Corporate Executive Officer in charge of Compliance through the coordinated activities of the Group Risk, Compliance, Internal Audit and other relevant groups. To promote risk management initiatives, such as business continuity planning, across the organization The Group Risk Office has been established in Sony Corporation.
The Compliance system
System established to emphasize the importance of business ethics and compliance with applicable laws, regulations and internal politics. Regional compliance network comprised of offices were set up in the Americas, Europe, Japan, East Asia*1 and Pan-Asia,*2 to exercising regional control over compliance activities to strengthen the compliance system throughout the Sony Group. Each head of region of compliance is
responsible and have the authority to issue instructions concerning compliance to Sony Group companies in their respective regions by cooperating with one another, are working to establish and maintain a comprehensive global compliance structure.
Sony Group Code Of Conduct and Internal Hotline System
System which sets the basic internal standards to be observed by all the directors, officers and employees
Global job posting system
System introduced to invite the internal candidates to apply for open positions in the other parts of the company. Sony aims at the optimal placement of human resources from the global perceptive. In the organization Sony aims to facilitate the optimal placement of its human resources from a global perspective.
Sony had a great skill in the human resource management. Sony considers for the growth of company it is necessary to motivate, enhance and encourage the personal growth of employees. Sony is offering different employee training programmes including general training, onsite training and e-learning to attain its objectives.
Some of them are:
Fostering global business leaders: Sony University provides short term and long term programmes in business, vision, management, decision making capabilities.
Nurturing engineering talents: In 2010, Sony launched a new programme designed to nurture the engineers that will help Sony to be globalized as well to make them aware about the role of them as a part of Sony’s R&D platform.
Enhancing management skills: Sony offers training programmes for management level employees to focus on effecting a change in each individuals perception of the responsibilities of the management
Support for career building: Sony respects individuals desire to take own new challenges to foster the development of corporate culture in building their own careers.
Sony recognizes the most important part of its corporate foundation is its employees. Sony provides a rewarding cooperate climate which supports the wide range of employees all over the Sony. Company recognizes the ability of the company to inspire people by its products, services and new lifestyle is entirely depended on the foster talented employees with a wide range of
personality, irrespective of nationality, culture, gender, age etc. Sony recruits employees from various backgrounds. Sony provides a flexible working atmosphere and opportunities to enable each individual from diverse background to increase their knowledge by learning from one another.
3. OTHER ISSUES
a. Describe the organization’s international strategy. Describe how they manage cross cultural issues.
The new CEO Kazuo has instituted a major new move to rebuild the electronic business which was lagging behind suffering from price competition resulting from product commoditization and impact of exchange rates. The company refocused into strengthening the core business, enhance to build for future by enhancing network initiatives, leveraging international growth opportunities. Sony already has trillion yen business focusing on television, digital imaging, games and mobile phones.
The company’s international strategy is based on the Sony has is to take advantage of growth outside traditional markets as Brazil, India and china are growing rapidly.
Open innovation is the another strategy used by the company which looks outside for new and different technologies which the customer needs to have new experience, in strengthening the business, innovating and in its growth.
b. Describe how power is used in the organization and how it is shared, describe internal politics and how it is resolved
In Sony Corporation Power is centralized at the headquarters. The New CEO Hirari is introducing a new top management structure aimed to accelerate decision making and strategic execution. Hirari is aiming to rebuild and restore the Sony group by concentrating on its core business. Sony has introduced its own techniques to help improve and maintain the soundness and transparency of its governance by strengthening the separation of the Directors’ function from that of management and advancing the proper functioning of the statutory committees. Under Sony’s system, the Board of Directors defines the respective areas for which each of the Corporate Executive Officers is responsible and delegates to them decision-making authority to manage the business, there by promoting the prompt and efficient management of the Sony Group.
(Annual report Sony Corporation 2012)
c. Describe the main communication processes.
Sony maintains a good communication with its top management and its employees and also Sony considers communication motivates its employees by informing and clarifying about the work that to be completed. Sony considers the image of the organization entirely depends on the
Ability to communicate to the entire society. By good Communication between the employer and the employee the organization can be well maintained.
Sony had a wide range of latest technological tools to promote and support communication between management and employees.
Sony uses intranets for communication to pass the information from management to employees.
Sony uses its own social networking site (SNS)
To convey polices and thinking on structural reforms to employees by top management Sony had held town hall meetings and CEO dialogues.
To increase the effectiveness of internal communication Sony has integrated tools such as telephone. Email, video conferencing and web conferencing.
d. The importance of being learning an organization
Sony being a learning organization is a key part of its overall mission statement. The chairman had taken the lead in the development and structuring of learning programmes, not only for the key leaders, but also for employees throughout the organization.
The main objectives which can be achieved by learning an organization are:
1. To develop the people: The people’s weakness can be identified and can take measures to foster the individuals.
To make the workforce flexible
To improve the social interaction
2. Teams and groups work better: As we study about the structure of the organization the difficulties faced by the teams and groups can be identified and can be rectified. The factors such as knowledge sharing and interdependency can be increased
3. Company Benefits which can be attained through learning organizations are:
Communication barriers can be identified and broken
Customer relations can be increased
Innovation and creativity can be increased.
e. Describe their policy in handling ethical issues
Sony has a global compliance network in its headquarters headed by the global compliance leadership team and regional compliance officers around the world. One of the major aspects of Sony is its Ethical business and compliance with applicable laws and regulations. Sony has taken different actions to reinforce the company’s worldwide commitment to integrity and help assurance resources.
In 2005 copy writing came as a big ethical issue to overcome this Sony introduced a version of XCP-Aurora as a copy protection measure in 2005 which is designed to control the distribution and copying of material on the compact discs.
Ref :( Annual report of Sony Corporation 2012)
C) MAJOR STRENGTHS AND WEAKNESS
There are 4 majors’ factors that helped Sony to supremacy of consumer electronics and which differentiated it from other products.
Visionary leadership: Sony proves the importance of a visionary leader in the organization in carrying it to the heights.CEO and management team was responsible for the experimentation and innovation.
Religious Zealous to innovation: Major brand characteristic that differentiate Sony from others is innovation. Sony identifies the entire customer demand and create a entire product strategy by innovation
Pioneer Advantage: Sony emerged as a pioneer in almost every section
Human capital: The greatest advantage of Sony is its human capital.
The major weaknesses are:
Sony had a Unrelated diversification of its current market which affected Sony into a financial crisis
Lack of brand evolution – Sony to continue to be successful in the current ultra competitive globalised market place it has to make itself very relevant to the current customer segments.
Lack of co-operation
Lack of strategy - Product development, manufacturing and marketing are all well established but the firm lacks any formal long-term direction. The original mission statement of Sony is also outdated. Its short-term strategy is also lacking as there is little emphasis on profit and accountability of R&D efforts
D) RECCOMENDATIONS FOR IMPROVEMENT
Sony should produce innovative products in the core market to maintain its leadership market.
Strategy should be maintained
Sony should minimize risk in the networking to their current and potential users and should focus their resources on creating better security systems.
Sony’s in co-operation in each sector should be increased by implementing a program where each division is rewarded for aiding another division in innovative technology. For example, the collaborative work of gaming division and the television division
As Sony is not financially feasible at the moment due to its liability ratio of 80%. It would be better to each division to entertain in an independent business.
Sony can work on specializing their products and making sure that customers are aware of the differentiation between Sony and their top competitors.
Sony wants to utilize their strengths in areas so that they can maintain its brand name and increase profits.
Sony wants to strengthen their frontline operations, which will consist of improving their retail stores with design, sales and brand experience.