SONY CORPORATION DESIGNS, MANUFACTURES, AND SELLS electronic equipment and devices to both consumers and companies. Although the electronics division accounts for a majority of its sales, Sony also develops, manufactures, and sells other entertainment products such as film, music, and videogame hardware and software. In addition, Sony also has a financial services division, which accounts for a majority of its income. Given the broad array of products and services Sony offers, Sony’s executives have faced some difficulties in determining the company’s optimal organizational structure, which has resulted in some financial problems that jeopardize the company’s operations. Sir Howard Stringer, Sony’s chief executive officer, has implemented several organizational structure changes to address the problem. One of the main causes for Sony’s recent lackluster performance is the company’s electronics division. In the past, Sony has relied on this division to produce new, innovative products such as the Sony Walkman. Recently, however, Sony has faced more difficulties in producing innovative products. To face these challenges in the electronics division, Stringer has promised to change elements of the division’s structure. In particular, he has vowed to restructure the electronics division to allow more communication. Hopefully, increased communication will lead to more innovations and, consequently, new Sony products. This increased communication will also improve coordination between the different units. At one point, for example, three different divisions within Sony were developing their own digital music players. Sony has also restructured its music business, which ranks third in U.S. market share, to improve the company’s overall performance. Specifically, the company has reduced a large number of support positions in sales, manufacturing, and distribution. According to Sony, many employees in these positions were performing similar activities. By eliminating some of this overlap, Sony can redirect money to develop new artists, which is a crucial activity in the music business. Finally, Sony will continue to search for new ways to combine its music, film, and electronics businesses with its videogame business. Sony’s videogame business, which develops and sells its PlayStation 3 (PS3) gaming system, represents Sony’s largest profit driver. By developing linkages among Sony’s businesses, the company may be better able to leverage its success in the videogame market. For example, when Sony first released its 3D update for its PS3, it timed the introduction with its launch of 3D capable televisions. Some questions remain as to whether Sony can rebound from its current downturn. According to Stringer, Sony’s ability to restructure represents a key determinant of the company’s future success. What organizing challenges do you see in Stringer’s future?1. What organizational objectives exist at Sony? For example, does Sony want to focus more oninternational markets or focus its attention on Japanese consumers? Does Sony want to grow ormaintain its present size?2. What plans does Sony have to accomplish these objectives? Is Sony going to open more offices ininternational locations? Are additional training programs being added to enable employees tounderstand how to best work in international locations?3. What are the major tasks Sony must go through to establish profitable linkages between its differentdivisions? For example, how many steps are involved in developing a videogame based on one of itscurrent movies?4. What resources does Sony have to run its operations? Answers to this question focus on issues suchas the number of employees, financial resources available, equipment being used, and so onCASE STUDY FORMAT:1. INTRODUCTION2. ANSWER TO THE QUESTIONS ABOVE3. EXECUTIVE SUMMARY4. RECOMMENDATIONS (ALTERNATIVE SOLUTION if there’s any)
SONY CORPORATION DESIGNS, MANUFACTURES, AND SELLS electronic equipment and devices to both consumers and companies. Although the electronics division accounts for a majority of its sales, Sony also develops, manufactures, and sells other entertainment products such as film, music, and videogame hardware and software. In addition, Sony also has a financial services division, which accounts for a majority of its income. Given the broad array of products and services Sony offers, Sony’s executives have faced some difficulties in determining the company’s optimal organizational structure, which has resulted in some financial problems that jeopardize the company’s operations.
Sir Howard Stringer, Sony’s chief executive officer, has implemented several organizational structure changes to address the problem. One of the main causes for Sony’s recent lackluster performance is the company’s electronics division. In the past, Sony has relied on this division to produce new, innovative products such as the Sony Walkman. Recently, however, Sony has faced more difficulties in producing innovative products.
To face these challenges in the electronics division, Stringer has promised to change elements of the division’s structure. In particular, he has vowed to restructure the electronics division to allow more communication. Hopefully, increased communication
will lead to more innovations and, consequently, new Sony products. This increased communication will also improve coordination between the different units. At one point, for example, three different divisions within Sony were developing their own digital music players.
Sony has also restructured its music business, which ranks third in U.S. market share, to improve the company’s overall performance. Specifically, the company has reduced a large number of support positions in sales, manufacturing, and distribution.
According to Sony, many employees in these positions were performing similar activities. By eliminating some of this overlap, Sony can redirect money to develop new artists, which is a crucial activity in the music business.
Finally, Sony will continue to search for new ways to combine its music, film, and
Some questions remain as to whether Sony can rebound from its current downturn. According to Stringer, Sony’s ability to restructure represents a key determinant of the company’s future success. What organizing challenges do you see in Stringer’s future?
1. What organizational objectives exist at Sony? For example, does Sony want to focus more on
international markets or focus its attention on Japanese consumers? Does Sony want to grow or
maintain its present size?
2. What plans does Sony have to accomplish these objectives? Is Sony going to open more offices in
international locations? Are additional training programs being added to enable employees to
understand how to best work in international locations?
3. What are the major tasks Sony must go through to establish profitable linkages between its different
divisions? For example, how many steps are involved in developing a videogame based on one of its
current movies?
4. What resources does Sony have to run its operations? Answers to this question focus on issues such
as the number of employees, financial resources available, equipment being used, and so on
CASE STUDY FORMAT:
1. INTRODUCTION
2. ANSWER TO THE QUESTIONS ABOVE
3. EXECUTIVE SUMMARY
4. RECOMMENDATIONS (ALTERNATIVE SOLUTION if there’s any)
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