Sony in Reinvention

Sony Overhaul Introduction: This paper will analyze how Sony is struggling to reinvent itself in the market by transforming its corporate culture, cutting costs and introducing new product lines in its ailing electronics division. Recommendation. Corporate culture needs to be cohesive and organic: The corporate culture at Sony is bureaucratic and the job for life mentality has created Empire building in departments. Each department or unit looks to gain control over key projects and ignores the company well being as a whole, Sony eventually suffered leading to a loss of $1 billion for the year ending in March.

009. This culture needs to be changed to be more constructive and the communication within the departments needs to be improved. Cross functional teams across departments and units need to be created to overcome this silo effect in the organization. A corporate culture that values innovation needs to be developed for employees to come up with new product ideas that can give back its competitive edge in the consumer electronics division. The vertical chain of command should not be adhered to and it should be organic promoting horizontal communication to foster ideas within employees.

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New Leadership to create buy in from the employees: Sir Howard Stringer who took over as the CEO of sony in 2005 is the only American CEO sony has ever had since its inception, even though he has a team of 4 musketeers in their late 40’s and 50’s helping him in his transformation in addition to a Chief Transformation officer that Sir Howard Stringer hired, the 4 musketeers that Sir Howard Stringer hired were originally overseeing some departments and Stringer broadened their responsibilities.While that is not totally a wrong approach, Stringer might have hired 2 of his transformation people like that and 2 withint he organization who were young superstars, this would create more diversified thinking. Groups of employees with a head should be created to listen to employee opinions about changes, so they feel empowered they are a part of the change and this will lead to more buy in from employees. PROBLEMS AT SONY Sony’s problems have been increasing with the current recession aking a further toll on the already weak electronic giant which was once the market leader in consumer electronics. Lewins Change model of unfreezing-changing/movement-refreezing is a framework that can be applied to Sony’s transformation. Let’s take a look at each of the steps below * Unfreezing: Howard Stringer was faced with a mentality which was job for life at Sony’s headquarters. When he had to do the first step of unfreezing, he did this talking to his employees to let them know status quo is not going to change Sony from ailing.He made effective speeches to his management and employees and said ‘I am asking you to get mad when Samsung’s market share increases, I am asking you to get mad when Apple’s Ipod sales increases’.

He motivated employees to change to transform Sony into a profitable company. Stringer also laid off around 5% of the 158,000 employees at Sony including closing some of its factories. * Changing/Moving: This step shifts the behavior of the organization to a new level. Howard Stringer did this by hiring a chief transformational officer who worked at IBM to bring in new behaviors and patterns at Sony.

He also restructured to form new core groups and also appointed 4 English speaking Japanese to run the core groups. * Refreezing: This step stabilizes the organization at a new state of equilibrium. This is the step that Howard Stringer is in the process of establishing and struggling with right now.

The new culture that Stringer wants to cultivate has not been easy, there has been a lot of resistance to the change. Stringer wants to create a culture of shared values and more a cohesive culture but there is not a lot of employee buy in to change the culture.The changes at Sony took place because profits at Sony were going down and the Sony board elected Howard Stringer to become CEO in 2005 to reinvent Sony. This can be seen as Beckhard and Harris change equation formula which is as follows: (D* V* F)>R D=Dissatisfaction – where Sony was currently at – the share prices were plumeeting and sales of its products declined. V=Vision – to bring Sony back to its once profitable stand F= First step – Hiring Sir Howard Stringer to spearhead the Sony turnaround. R=Resistance to chance The combination of D, V and F were higher than the resistance to change as tated by Beckhard and Harris change model When analyzing the problems at Sony, there are a lot of factors that have hurt the once profitable electronics company. To name a few * Mindset of Sony’s leadership: The old mindset of Sony’s leadership has hurt Sony in a number of ways. Supposedly some engineers at Sony came up with a concept similar to Ipod but the management at Sony rejected it saying that the new product could hurt the sales of its best selling portable walkman and threw the idea out.

That kind of thinking has cost the company billions in losses and Apple rising to the market leader in portable music with its Ipod.The innovative spirit in Sony’s employees needs to be encouraged so it can come up with the next ground breaking consumer electronic product. * Product line of Sony: Sony has over 100 prouducts in its consumer electronics and currently it is not a market leader in any of the products.

The diversification of its products has not helped Sony, Sony has also been slow in responding to the changing taste of the consumer that other electronic companies are tapping into. Products that are not making the mark in the context that the revenues/sales of the product are less than the sales needs to be scrapped.This will enable Sony to focus on things they do right and to focus. * Quality Control: While Sony was once known for its best quality products, Sony has drooping in its quality control, lot of Sony products are lacking the quality which was the flagship of the company.

Quality control needs to have more attention at Sony, there have been several complaints of Sony’s products not meeting standards, the main reason Sony stood apart from the competitors was its supreme quality so much so that mentions were made that is this ‘Sony Quality’.The flagship quality of Sony needs to be restored and mentions of how it is going to be important and what needs to be done needs to be communicated to the employees from Stringer. A program called ‘Quality First’ can be instituted to show employees and the consumers how Sony is working to transform itself. SONY TO MAKE CHANGE PROCESS MORE EFFECTIVE Pros: The pros of the change process are Stringer has acknowledged the presence of silos in the organizational culture at Sony and is working towards fixing it. He has identified the problem and is working towards olving it.

He has his team of 4 musketeers helping him through this process. Cons: The silo breaker strategy that Stringer is using is not working, he needs to celebrate diversity by bringing in young blood within Sony to the top to help him with the change he is trying to initiate. Employees need to more empowered to contribute innovative ideas.

SUCCESS IF SONY FOLLOWS THE IDEAS PRESENTED ABOVE The proposed course of action will make feel that the employees are included and empowered and they will contribute more to company’s profits.The culture turnaround by creating groups of individuals with leaders chosen from the employees will give a feeling of belonging to the employee who in turn will put their best leg forward for Sony. Sony has a total of 158,000 employees if open communication as opposed to the vertical chain of command is followed, there will be sharing of ideas, a more cohesive culture within Sony. The leadership of the 4 musketeers needs to be supplemented with fresh young blood to bring the diversity to the whole thinking process. The much needed new and innovative ideas that Sony needs can be tapped into by this way. LESSONS LEANT FROM SONY Promoting an innovative culture within a company needs to be encouraged – Sony is guilty of not paying attention to innovative ideas put forward by its employees, if it did it could have end up with the IPod itself.

* Open Communication: All employees should have the opportunity to communicate within themselves and with the management to foster an organic culture. * Communication about short term wins: Stringer did not keep up with the job of communicating the changes that worked well with the employees, if don’t this could have created a sense of achievement among employees who otherwise feel in vain.Summarized above is the analysis of changes at Sony and how the consumer electronics giant is struggling to transform itself. ——————————————– [ 2 ]. money. cnn.

com/2006/05/26/… /stringer_greatteams_fortune/ [ 3 ].

Managing organizational change, page 56 [ 4 ]. http://www. bloggingstocks. com/tag/Howard+Stringer [ 5 ]. Managing organizational change, page 56 [ 6 ].

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Author: Cynthia Hammond


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