BMA701 | Management | The Organizational Change of Sony Corporation

1946 for about a period of around 72 years. It operates in the hardware industry and manufactures electrical products primarily. Over the last few years, the firm has altered the prices in relation to the fluctuating economic market conditions.

The products of Sony are diverse and includes a wide range of goods namely – computer accessories, digital cameras, home theatre systems,  home audio and video instruments, storage and recording gadgets, games and even portable audio and video systems (Sony.co.in, 2018).

Although Sony has been efficient enough in creating better technology improvisation, the firm’s major competency has been in the field of obtaining higher degrees of product differentiation over the years of operation. In fact, the company has continuously been able to reduce the size of its goods thus increasing the efficiency and ease of carrying these gadgets as compared to gadgets from other firms.

The business strategies being used and currently implied by Sony include international expansion of the business at hand. The company is also increasingly trying to improvise the designs of its products. The other most important strategy of the firm include investment in the sections of gaming. In addition to these, the company has also started increasing their attention and focus on the corporate social responsibilities.

Background of the Change:

The organization was a major market dominant force in the electronics field and with the presence of the quality of their product, they had the potential to reach significant heights. The organization generally faltered in acknowledging the importance of the technological advancement in gaming, television industry and in the mobile products. Sony, being a leading organisation, in the electronics market was expected to be one of the early risers but it was proved wrong when they were unable to introduce iPod even when they got the concept before Apple just because of their incapability of finding the small inexpensive hard drive. This was a significant proof of the fact that the organization was not doing justice to their spirit of innovation. This was evident with no increment in the allotted budget of the organization in the research and development sector in the financial year 2010 to 2012 (Sony.net, 2018). The organization completely lost the innovative edge of it and became a mere follower of its competitors. The organization was observed to have no effective communication between the parts of the organization like Sony Network Entertainment, Sony Computer Entertainment, VAIO and the mobile business group, Sony Mobile Communications, Digital Imaging Business group, Professional Solutions group along with Home Entertainment and Sound Business group (Naganathan 2013). The silo-mentality of the different parts of the organization was also responsible for the downfall of the organization. The organization was significantly falling behind the market competitors in the television market, smartphone market due to the limited focus on the part of the gaming and digitalisation from the part of the organization. The CEO of the organization Kazuo Hirai had to make some painful decisions of probable job cuts of 10000 over the three-year span starting from 2012 to 2015 in order to meet the massive financial loss of almost 4 billion pound that it faced due to the above mentioned issues (Sony.net, 2018).

Analysis of the Change:

The CEO of Sony used the 8 step model of change management and was partially successful with the change as the organization was significantly focusing on the three core sectors which are Entertainment, Digitalization and Gaming which was visible with their success with the Blue Ray Disk and PS3. The launch of PS3 and PS network were considered as rectification where the organization was able to combine the cutting edge technology along with the entertainment content. On the other hand, the development of the change vision by the CEO was significantly criticised as that included 10000 job cuts.

Reason behind the Restructuring:

The organization was significantly criticised because of the lack of intent in developing the software which the CEO rectified in order to support the hardware electronic device. According to Norman and Verganti (2014), the CEO tried to revive the culture of the after sales service in order to increase the goodwill of the organization but according to many critics that was not sufficient to restructure the TV business.

Conclusion:

In conclusion, it can be asserted that the company underwent a financial crisis in the years 2010-2012 and it was not able to deal with this easily because of the lack of innovative approaches. This adverse situation facing the organization was seeking a major shift in the organizational structure in order to control every aspect of the organization in the normal but enhanced form. The need for the organizational change was considerably felt by the CEO and even his acknowledged it with the proper leadership for the management of the change.

References:

Cameron, E. and Green, M., 2015. Making sense of change management: A complete guide to the models, tools and techniques of organizational change. Kogan Page Publishers.

Naganathan, V., 2013. A Comparative Analysis on Sony’s Approach to Problem Solving and Decision-Making. International journal of management and business research, 3(1), pp.69-88.

Norman, D.A. and Verganti, R., 2014. Incremental and radical innovation: Design research vs. technology and meaning change. Design issues, 30(1), pp.78-96.

Sony.net. (2018). Sony Global - Annual Report. [online] Available at: https://www.sony.net/SonyInfo/IR/library/ar/Archive.html

Sony.net. (2018). Sony Global - Sony Global Headquarters. [online] Available at: https://www.sony.net/

Sony.co.in. (2018). Sony India | Latest Technology & News | Electronics | Entertainment | Sony IN. [online] Available at: https://www.sony.co.in/ [Accessed 3 Sep. 2018].