Sony Corporation Innovation All The Way Business Essay

Sony pile Innovation All The Way air EssayThe give come to the fore is an evaluation of the administration coordinate apply by Sir Howard Stringer in October 2005. The transition of Sonys geological formation social system from Transnational structural to multi variational anatomical building has been analyzed in detail.Goold and Campbells v tests have been conducted to narrow down pat(p) the appropriateness of Sir Howard Stringers structural choice given his desire to give rise Sony a to a greater extent(prenominal) in advance(p) and limber giving medication. The risks and benefits of the structural choice has too been assessed.The belowwrite displays the cultural sack of Sony in the beginning and after Sir Howards arrival. It was derived that the Reconstruction type of st postgic smorgasbord had been use to drive about the transformation in the organizations culture. Consequently, Sir Howard adopted the Education and communicating and the Collaboration/ Participation meanss of st considergic wobble implementation.In conclusion, it jakes be seen that the stock sh are value has increased during 2005-2007 which means that Howard Stringer was doing a unsloped job at implementing his permute.Ac noesismentWe convey Heriot-Watt for giving us the luck to conjure up our learning in Strategic Project Management by means of this convention assignment.We would a uniform to give a hearty thank to our Professors at Heriot Watt, namely Dr. M. A. Salama and Dr. Michael Clarke for their time and guidance for completing this assignment.We would like to thank the university librarian Ramakant for his cooperation in providing us the appropriate books and journals for bushelence.We would too like to thank our families and friends for their support through out the completion of this assignment. We could non have through with(p) this without them. PM Stars IncorporatedIntroductionAs a part of this report let us start by introducing Sony Cor poration.SONYSony is one of the leading manufacturers of electronics, word picture, communications, video game consoles, and every(prenominal)egeation technology inter instalments for the consumer and professional markets.Sony was founded on 7th whitethorn 1946. The representative corporate exe scale downive officers at Sony as of immediately as Howard Stringer(Chairman, chief executive officer and prexy), Ryoji Chubachi (Vice Chairman) and Nobuyuki Oneda (Executive Deputy chairwoman and CFO). (Sony spherical (2009) has provided the higher up information).Sony Corporation (commonly referred to as Sony) is a multinational conglomerate corporation headquartered in Minato, Tokyo, Japan, and one of the beingnesss largest media conglomerates with tax revenue exceeding 7.730.0 trillion, or $78.88 billion U.S. (FY2008). Its name is derived from sonus, the Latin word for sound.Sony Corporation is the electronics pipeline unit of mea originalment and the parent connection of th e Sony gathering, which is engaged in channel through its five operating segments-electronics, games, entertainment (motion pictures and music), financial services and early(a)wise.Sonys superstar telephone circuit operations include Sony Corporation (Sony Electronics in the U.S.), Sony Pictures diversion, Sony Computer Entertainment, Sony medicinal drug Entertainment, Sony Ericsson, and Sony Financial. As a semiconductor make upr, Sony is among the Worldwide Top 20 semiconductor unit Sales Leaders. The come withs slogan is make.believe. (Wikipedia (2009) provided information regarding Sony Corporation).Company StrategyVision (2005) make Sony cool it againVision (2009) make.believeWhen Howard Stringer joined as the chief operating officer of Sony Global Japan he do new strategies and used those strategies to restructure the organization to be in-line with these strategies.Firstly, he ported at the bone marrow competencies of the gild and focused in the main on the el ectronics, games and entertainment sector. He established a growth dodge saying, Our tar compensate is for the Sony Group to achieve consolidated sales of all all over 8 trillion yen and an operating profit margin of 5% (electronics 4%) by the end of fiscal year 2007. novelsBlaze (2005) published the company scheme from the fiscal year 2005 to 2008 as given in Appendix C of this report.The three-year revitalization plan/strategy was as follows (in brief)Restructuring the Electronics musical arrangementEliminated the corporate silos and charter more focus on competitive growth.Improving Sonys Profit anatomical structureCost ReductionsSale of Real Estate, Stock and Non-Core AssetsStrengthening Sonys Current Electronics agate lineFocus on areas of the Electronics business by bringing profitability in television by the second half of 2006.Focusing Resources on maturation StrategyMaking the HD World and Major Profit Pillar accounting entry of a float of high-definition products in 2006.Focusing on Intelligent practical ProductsDeveloping network-en up to(p)d products and applicationsStrengthening Technology informationCreation of Home and spry PlatformsConcentrating Investment on Semiconductors and Key Component DevicesNext-Generation Display (OLED)Enhancing Software DevelopmentGroup Convergence StrategyPursuit of mobile entertainment judicature of Cell Development CenterGroup Strategy by single(a) Sector focus onGamesEntertainmentMotion Pictures medicament industrious PhonesFinancial ServicesNetwork Services, RetailRetail Business smell Refer to Appendix C for a detailed Company Strategy.organisational social systemCorporate social organization of Sony CorporationFrom the analysis on the organizational structure that Howard Stringer was trying to implement in 2005 we can see that it was clear a multi- memberal structure. This structure has been further worked on since 2005 and on that point have been tenuous swops to the same.Multi-Division al structure (M-form)The multi- socio-economic classal structure is alike kn ingest as the product structure where the divisional structure groups organizational function into a division. to each one division works as an independent section within the company and the divisional structure contains all the necessary resources and functions within it. Each Division get out have its own sales, engineering and marketing departments. (Wikipedia, the free encyclopedia (2009).The organizational structure in 2005 that Howard Stringer was trying to implement is a hybrid structure which is as follows (Please refer to Appendix A for the assignment of for distributively one individual in the division)Figure 1 Sony Organizational chart (as of Oct 2005)(Source Johnson, Scholes and Whittington, 2008)Please refer to Appendix B for the new Organization Structure as of initiative July.From the organizational structure preceding(prenominal) it can be seen that Howard Stringer was attempting to implement the multi-divisional structure. He had assigned Ryoji Chubachi to handle the main Electronics business and Chubachi had implemented the multinational intercellular substance structure. We open not go into details of the matrix structure exactly will explain it below in brief.In case of the international Structure of the organization we can see that there were a fewer business units that were put together in order to increase their responsiveness in the market. in that regard were five committees created crosswise all these business units and business groups. This gave a better integration of knowledge, flexibility and the ability to analyze these units across its procurement, technology, product strategy, sales and productive business outcomes.Strategy and Organizational StructureWhen Howard Stringer took over the Sony Global Corporation in 2005 he gave strategies for each product in the company. The strategies are stated above in the Introduction section of this report.As per the strategies implemented we can see clearly that he had devised assorted strategies for each magnetic core product that Sony was providing and so he also dual-lane the companys organizational structure the same way. Thus, we see that the company is become more flat and each division is reporting to the Headquarters.As in a multidivisional organization much(prenominal) as Sony, the divisions become flexible as in the sense that they are able to merge, add or make salutary divisions. This is plain in the fact that Sonys Mobile division merged with Ericsson to produce Sony Ericsson range of mobiles.It can also be seen that Sonys medication Entertainment division had a 50-50 joint dissemble with Bertelsmann capital of New Hampshire Group naming Sonys Music division as Sony BMG Music Entertainment and in August 2008 Sony bought Bertelsmanns 50% shares and Sony renamed its Music division as Sony Music Entertainment.Ergo, it is apparent that because of Sonys mult idivisional structure each division is able to work as its own company which is flexible becoming to have joint- surmise projects as in the case of Sony Ericsson and the company is also able to make the decision of buying over another company such as the Bertelsmann Music group.When Howard Stringer took over Sony he also closed rarify a chain of restaurants and other non-core business companies that Sony owned.With a multidivisional structure in place Sir Howard Stringer was able to go out and oversee each division from a distance by monitoring the business performance of each division.If we look at the advantages of a multi-divisional structure we can see that because the structure is split by product lines it allows each division to grow and specialize on their competences.We can see that each division has actually become its own company like the Sony Electronics Inc., the Sony Pictures Entertainment Inc., and Sony Computer Entertainment Inc. As we will see in the redundancy t est later in this report we can see that each of the companies that are ground in each country have their own head offices. This means that there are many parent aims in this organization which means that many of the documentation departments such as HR and IT will be redundant provided overdue to the large organization structure of the company Sony desires these home to be set-up. Although the knowledge manduction and cooperation among the business units become precise limited provided Howard Stringer has tried overcoming this by placing five strategic committees across the business units which are the product, technology, production, procurement and sales. Thus standardizations and centralization has dish outed to reduce driving force and poor coordination.Also, with Howard traveling around Sonys operations at a rate of 30,000 air miles a month (Nakamoto 2006) is building spirits and reflecting in the look of the employees all around Sony.Goold and Campbell running playsWe will use the Goold and Campbell last 5 tests to determine the appropriateness of Howard Stringers structural choice given his desire to make Sony cool again (Clayton 2005).The Specialist destinations TestThe Organization Structure Specialist finis testFigure 2 The Specialist Culture testIn the Specialist Culture test we placed Sony between wide-cut and precise Good as Sony has an Engineer-driven culture (Edwards, Lowry, Ihlwan, Hall 2005). Sony is an engineering culture (Paczkowski 2008) says Howard Stringer and they genuinely take care of their engineers. Engineers have the freedom to think and come up with new designs. When a certain project was untaken engineers from all the different departments met in one place to finish that task. This shows that there is no organizational defilement of the specialist engineer culture test.The elusive Links TestThe Organization Structure Difficult Links TestFigure 3 The Difficult Links TestShared know-how LinksSony holds Knowle dge-sharing sessions and several other activities company wide. They host forums to enable interactive discussion about the company intelligence service and they engage their employees in company developments and in-the-Know at all times as claimed by them on their website.Sony also provides all documents, policies, lessoned learned and all other types of documents on their intranet sites.Shared Tangible Resources LinksThough with a multidivisional organization with so many parent companies the amount of duplication of work increases but after Sir Howard Stringer came into Sony he divided all core businesses by products into divorce units that would report to the Corporate office and setup a corporate RD unit to reduce the duplications and also brought in govern engineered products to help the reduction of salute.Pooled Negotiating top executive LinksSonys Mobile division merged with Ericsson to produce Sony Ericsson range of mobiles. Ericsson had the a la mode(p) mobile techno logy and Sony had the vast experience in consumer electronics and entertainment like music, pictures and games. Bringing them both together in a 50-50 joint venture gave Sony exponentfulness in the market. This would help both the companies generate economies of scale.It can also be seen that Sonys Music Entertainment division had a 50-50 joint venture with Bertelsmann Music Group naming Sonys Music division as Sony BMG Music Entertainment. Financial analysts covering the merger anticipated that up to 2,000 jobs would be cut as a result, saving Sony BMG approximately $350 million annually (Wikipedia, 2009) organise Strategies LinksAfter Sir Howard took over he put together the Electronics social unit which consisted ofThe Semiconductor Business unitCore component Business wholeBP Business GroupAudio Business GroupDigital imaging Business groupVAIO Business GroupVideo Business GroupTV Business GroupConnect CompanyHe strategically placed all these units and groups together in orde r to establish Sony as a leading player. They pauperizationed to develop a semiconductor and core components group thus they put these two relevant new business units under the Electronics Unit.With this new engineering structure Sony cherished to increase their internally sourced components, centralize their engineering functions and reduce their cost by consolidating and cutting down their manufacturing sites.Vertical Integration LinksBy coordinating the scarper of its internally sources components and by standardizing designs through out the company Sir Howard has managed to reduce cost and enhance product development.New-Business Creation LinksVertical integration is truly patent in the Sony business as they try to enter the digital world they are buying companies and doing joint ventures to meet the specific needs of their customers and that is to bring the mobile, music, gaming and video entertainment together. Sony is in a practised vex to do a backward or forward inte gration in case it decides to do so. The structure is flexible enough to accommodate that.The tie in are dress hat handled through self-managed networking among units n top management should leave this up to the unit rather than impose to-down coordination process.The Redundant Hierarchy TestThe Organization Structure The Redundant Hierarchy TestFigure 4 The redundant Hierarchy TestThe suit we have placed them between satisfactory and ingenuous is because although the company had many parent levels in the organization they were able to reduce the redundancy through standardizing they internal sourced components. Sony also standardized its designs across the different units and in its core business which was the Electronics Business they had five committees across each group which were the product, technology, production, procurement and sales. This centralization has helped to reduce move and poor coordination.Also, with Howard traveling around Sonys operations at a rate of 30 ,000 air miles a month (Nakamoto 2006) he tends to increase the communication spreading between the different groups and companies at Sony.The Accountability TestThe Organization Structure The Accountability TestFigure 5 The Accountability TestThe reason we have placed them between good and very good is because in the multidivisional structure the overall structure of the company is flat. Thus, most of the units are like a shot reporting to the corporate office. This increases the business and accountability of each unit heads.The flexibleness TestThe Organization Structure The Flexibility TestFigure 6 The Flexibility TestThe reason we have placed them between good in the case of its flexibility is because Sonys structure after Sir Howard Stringer had do it flexible for the company like the Sony Mobile business unit to merge with Ericsson Sonys Music Entertainment division had a 50-50 joint venture with Bertelsmann Music Group.Sony also sold many of its non-core assets like th e restaurant chains etc after its restructuring since it do it easy by moving these non-core business units out of the way to trim back on the core business.The Risk and Benefits of the Multidivisional StructureAs we found out through our analysis that Sony Corporation has a multidivisional structure and Goold and Campbells five tests of good general design principles helps us to see what risks and benefits that Sony Corporation faced when Howard Stringer took over.The BenefitsIn Electronics group Sony placed centralized decision-making top executive over key areas under the Electronics chief operating officer. This change assures coordination and focus across newly defined business groups. circumstantial horizontal coordination in main areas- product planning, technology, procurement, manufacturing, and sales and marketing-will allow tumultuous and streamlined decision making across product lines.Concentration on particular business area (Games, Entertainment, Electronics, Mobi le phones)Flexible (Sony Corporation can focus its resources on different business groups, which depends on market situation, add, close or merge divisions )Specialization of competence (We can see that each division has actually become its own company like the Sony Electronics Inc., the Sony Pictures Entertainment Inc., Sony Computer Entertainment Inc.)Ability to give clear direction and make a working environment that draws out the unique talents of employees and helps them to reach their full potentialEncourages general management developmentOwnership of strategy (As per the strategies implemented we can see clearly that he had devised different strategies for each core product that Sony was providing and so he also divided the companys organizational structure the same way)Investment in core businessesSony divisions enable to work in tandem for their mutual advantage (to develop new-age products).The RisksConflicts between divisionsAdditional cost of the centerDifficulty of co-o peration between business groups (due to the large organization structure of the company the knowledge sharing and cooperation between the business units become very limited but Howard Stringer has tried overcoming this by placing five strategic committees across the business units)Divisions might grow too large (as we said before each division has actually become its own company like the Sony Electronics Inc. or the Sony Pictures Entertainment Inc. and there is a risk of them grow too large) study power is centralizedAs CEO Sir Howard Stringer recalled in a 2005 New Yorker article, the engineers started to suffer from a damaging not invented here syndrome, even as rivals were introducing next-generation products such as the iPod and Xbox. As a result of their belief that outdoors ideas were not as good as inside ones, they missed opportunities in such areas as MP3 players and flat-screen TVs and developed unwanted products-cameras that werent compatible with the most familiar fo rms of memory, for instance.Looking at the above risks and benefits we can see that though there were a lot of risks in the structure Sir Howard needed to make a decision and he made this decision with the help of allies in the company and he also took help from persons who were made in-charge of ever-changing the IBM structure many geezerhood back. They were supremacyful in doing so and since Sir Howard was declared President of Sony Global we can say that he is still in there and is still fighting and restructuring to put Sony back on to globe again. Sony is to sidereal day coming up with new customer focused products rather than products that are innovative but it is not what the customer wants.The Cultural Web in the beginning Howard StringerOrganizational culture sometimes biass the organizations strategy if taken for granted. Culture has play a role in Sonys current financial difficulties. They had power blocks which hindered the flow of communication and corporation betwee n the management, designers, production and marketing.The Cultural Web, developed by Gerry Johnson and Kevan Scholes in 1992, provides one such approach for looking at and changing your organizations culture. Using it, you can expose cultural assumptions and practices, and set to work aligning organizational elements with one another, and with your strategy.The Cultural Web identifies six interrelated elements that help to make up what Johnson and Scholes call the paradigm the pattern or lesson of the work environment. By analyzing the factors in each, you can begin to see the larger picture of your culture what is working, what isnt working, and what needs to be changed. The six elements arePower Structures Sony had a culture, were farsighted serving executives have very strong influence on the organization. At their annual general meetings all these executives take up the front seats whiles the lower ranks are relegated to the back.Many of the working major(postnominal)s di d not even discuss their share values and did not have the inter-group communication in the business.Control Systems Sony emphasized on budget plans and emergency fixes as their main control systems. Quality was not really emphasized, they believed in get the work done with the least amount of cost. Lower level staffs were not awarded for their achievements or bonuses given at the end of the year. All these were aimed at compulsive cost.Organizational Structure They had the functional/Transnational type of organization where the CEO sits at the top and all functional heads report to him. They believe in top management taking all the decisions without the involvement of the junior level engineers. These caused lack of communication and co-operation between the various units and more of delegation to get the problem solved.Stories Sony had gone through continuous restructuring for the past 9 years to improve their financial positions. Sony was not customer focused. They did not inv est in non-core businesses and lacked new-age products even though they had very good and talented engineers.Although Sony believed in harmony of the people and the company but with all this restructuring the morale of the employees was down and this was plain when there was a comment that there is sparkle in the eye of the employees after Howard Stringer took over. rites Routines As per the Japanese culture of respect Sony had a rite that it never fired its high rank executives even after retiring. The elderly managers were made Advisor (Gunther, 2006) and each of them had their own secretary, a car and device driver and they also had the authority to second-question people who were actually working at Sony.At Sony the ritual was that if an engineer came to know about a fault in the product they would let the higher-rankings know they would honest fix the problem and just do it. Thus seniors were not involved in the businessSymbols There was a symbol of seniority when the com pany never really retired its senior managers and also in the fact that during annual meetings the seniors would be given the preferred and surpass seats in the hall while the others were given uneasy seats to symbolize the importance that Sony gave to its senior managers.To create the harmony they want and give employees a range of different health and wellness programs. just about of those (as taken from the Sony Site) are as belowThey provided on-the-scene(prenominal) fitness centersOn-site flu shotsOn-site cafeteriasWellness fairs100% medical and dental planswellness risk assessmentsGym discountsStop Smoking programsNutrition informationRitual RoutinesRespect for senior managersWork in Harmony giving employees the best working environment. of age(p)s never got fired.Engineers got the freedom to do what they wanted to.Engineers did not inform senior managers of faults they just fixed it.StoriesContinuous restructuringMorale was downBelieved in the harmony of the environment and the peoples freedom of working in that environmentSymbolsSenior management given big paysNo one really gets retiredwellness related programs and discounts available.Complete Medical covered.The ParadigmRespect for Seniors speech pattern on Harmony through-out the company health and wellness programs, discounts and medical coverageEngineer-driven CultureNew innovative productsPower StructureA lot of power was given to seniors in the company who were not involved in the day to day work.Less office on the shoulder of the seniors managers as responsibility was not takenControl SystemsBudgetsEmergency FixesOrganizational StructuresTransnationalBranches/devolvedDelegative leading styleEngineer-driven cultureFigure 7- Cultural Web before Howard Stringer became CEO of Sony GlobalSony Corporation mainly focused on giving the best environment to its employees especially its engineers who were the minds behind the innovations. A high level of respect was kept between the senior and jun ior employees in the company. Various Health and wellness programs and benefits were available for employees. Sony was an engineer-driven culture which put what the engineers thought and innovated before what the customers wanted or what the market demanded.The Cultural Web After Howard StringerPower Structures Howard was made the new CEO thus giving power of the company to him. He was able to make changes but very smartly Howard made Chubachi his sound hand man since he was sure that he was the first non-Japanese CEO of the company. His power can be seen in the fact that Howard is now President of Sony in 2009.Control Systems There was a more cost control in the company through reduction of employees in many of the sites. Manufacturing companies were consolidated and shut down in many areas. Rewards and bonuses based on group performance (not seniority) after Howard Stringer had taken over.Organizational Structure With the structural changes that Howard had made to the company So ny had a flatter structure. Management was made to be more involved in each of the business units of the company. There was more responsibility given to senior and middle management.Stories As per Chubachi, it was said that since Sir Howard had taken over there was a sparkle in the eyes of the employees. The over all morale of the company was better. After Howard came people were still not sure if they knew where they were leading to but they understood the company strategy which was to make the company cool again. People were more excited.Rituals Routines After Howard came he dissolved the advisory board that consisted of 45 senior mangers who had a say in the company even after they had retired. Main customer who had used Sony products for a long time where now giving their inputs on the Sony products. Engineers were given more appreciations. conquest was being celebrated through Award ceremonies, Christmas parties, training programs and knowledge sharing sessions.Symbols After Howard came he dissolved the advisory board that consisted of 45 senior managers who had a say in the company even after they had retired. Each of them had a secretary, a car and driver and probably many other benefits. The gap between the senior management and the juniors was being reduced.Ritual RoutinesGood communicationsCustomer involvementAppreciationsGiving praiseCelebration of successStoriesReduced Gap between the senior managers and juniors.People were more aware of the company strategy.SymbolsSenior management who had retired where not taken care of by the company.Promotions based on group performanceThe ParadigmRespect for SeniorsEmphasis on Harmony through-out the companyHealth and wellness programs, discounts and medical coverageNew innovative productsPower StructureEngineers given limited powerManagement given more responsibility along with current power.Restructuring of power in the companyControl SystemsBudgetsPartnership agreementsFinancial controlsOrganizational S tructuresMulti-divisionalUnits based on market priority and business needs.democratic leadership styleFigure 8- Cultural Web after Howard Stringer became CEO of Sony GlobalFrom the above cultural web we can see that Sony did not undergo major paradigm changes but did move from a transnational structure to a multi-divisional (Electronic department was a matrix) structure.Sir Howard Stringers Change ManagementChange management is also known as Change control. It is usually referred to the process by which the change of a system/process/organization is implemented in a controlled manner.If we look at the above Cultural Webs before and after Sir Howard Stringer took over Sony we can see that in order to bring the changes as per the paradigms shown above he had to adopt a Change Management program.Organizational change management processes include techniques for creating a change management strategy which is acquiring everybody involved in the change process. Engaging senior managers as change leaders, they become the sponsors of the change program. You also need to build awareness of the need for change (communications) getting everybody to understand why the need for change. Developing skills and knowledge to support the change (education and training), helping employees move through the period of change (coaching by managers and supervisors), and methods to sustain the change (measurement systems, rewards and reinforcement).Howard Stringer had instituted all these processes for his change management, but due to the dominance culture