SONY CHANGE MANAGEMENT

JUNE 2005 - PRESENT

WHY WAS HOWARD STRINGER, A GAIKOKUJIN, MADE CEO IN 2005?

Sony hoped that a foreign CEO could help to break from tradition, and push though tough reforms and globalise its operations. A Carlos Ghosn experiment similar to Nissan Stringer, formerly CEO of Sony's US subsidiary, became chairman in 2005 as Sony's performance in the electronics business had weakened. Stringer believed Sony's advantage was in software, as the company had numerous products in the movie and music sectors. He focused on strengthening this business to produce synergies with the electronics business. Under Stringer, Sony's earnings hit a record high of 8.87 trillion yen in sales and 369.4 billion yen in after-tax profits in March 2008. But after the Lehman shock and ensuing worldwide economic slowdown, Sony's performance, especially in its electronics business, rapidly deteriorated.

CRITICISMS OF HOWARD STRINGERS MANAGEMENT

Accused of not walking the ground, not executing his vision properly May have limited creativity in other areas by emphasizing on Sonys hardware.

CURRENT STATE OF SONY

Currently, Desperate need for a leader with vision: reclaim its roots as an incubator of ideas and creativity Losses running for 4 years: Stringer presided presided over a 60% decline in Sony's value; Failure to come up with anything to rival Apples iPod even after a decade Stringer promised to tear down the silos, which are cultural barriers between divisions that prevent Sony from marrying content from the acquisitions of Columbia Pictures and CBS Records to its hardware.

WHAT HAPPENED?
Changes in effect from 1 Apr 2009: RE-ORGANISATION - Formation of 2 new biz grps, 1. The Networked Products and Services Group (Sony Computer Entertainment (SCE), personal computers (VAIO), new mobile products (including current Walkman lines)), 2. Sony Media Software and Services (develops common service platform across Sony products). -Purpose: Maximize potential for innovation, enhance profitability in networked pdt and scvs. Incubation of new products. Expansion of Playstation netwk scvc platform NEW MANAGEMENT TEAM - Kazuo Hirai as CEO of SCE, vp of sony corp. Kunimasa Suzuki is president of consumer of America Group of Sony Electronics in US new home and mobile business incubation project to create new products that utilise the best technologies from across the Company, as well as the VAIO Business Group. CHANGE IN VISION - Eco-friendly technology

CHANGE IN MANAGEMENT STYLE

Town Hall Meetings since 2005 and CEO Dialogues: facilitate direct communication with employees. Enable top management to convey policies and thinking on structural reforms directly to employees, and simultaneously gain an understanding of the views of employees and issues faced on the frontlines. Opinions are exchanged on a broad range of issues, under such themes as technology and management. Sony's top management also uses intranets and e-mail to communicate with Sony Group employees. This not only facilitates the sharing of information but also helps develop a sense of unity within the Group

 Sony Group Support for Recovery Efforts in the Wake of the Great East Japan Earthquake

JAPANESE CULTURE
Insular: Executives stick with one company for life and bosses are promoted from within. Career progression is highly predictable & regulated. Members of same graduating class usually have similar salaries, promotions usually uniform Maintain harmony and not promote jealousy or stress among group Employee-Oriented (see below) Avoid conflicts, bureaucratic, favouritism Decision-making through group consensus Time consuming but ensures everyone is in favor of decision Japanese employees typically all do a serious of stretches and a light work out at the beginning of each work day a western CEO might not think that is important.