Execut Execut ive Summary This short paper is commissioned to examine the hybrid leadership style used by Sony current CEO by analysing strengths and weakness as well as evaluating its influence and effectiveness towards the future of Sony Corporation.
The research draws attention to the fact Sony has been making losses since 1995 till to date caused by a change of leadership style that does not leverage on its core competency of innovation and technology, does not align with the organization vision and mission and conflicts with the t he Japanese culture massive restructuring through laying off employees, selling away their profitable businesses and reducing production line. Over the past 10 years Sony has lose its market share to competitors like Samsung, LG and Toshiba and lose its competitive advantage in the electronics goods industry, where they used to be called a company that was once the premier creator and manufacturer of electronic products. Further Investigations reveal response from media and members of the public over current leadership style in Sony remains neutral, some who are supportive in his new strategic direction of unifying various divisions as “One Sony” without changing its DNA whereas some remain sceptical on its feasibility.
The strategy considered for implementation is to apply a transformational leadership style, creating new organizational goals, new vision and mission in order to create a new direction and new competitive advantage whereby employees are motivated and convicted to follow. The real challenge of enforcing transformational leadership in a Japanese organization that is deeply rooted in its culture is for the current CEO to convince the entire organization that they truly need to evolve.
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Tabl Table e of Conte ont ents Page No. 1.0 Introduction 1.1 1.1 Backgr ound of Sony
1
1.2 The Visi on
1
1.3 The Miss ion
2
2.0 2.0 Industr ies 2.1 2.1 Industr y Portf oli o
2
2.2 2.2 Current Busi nesses
2
2.3 2.3 Current Competitor s
3
3.0 3.0 Current L eadership eadership 3.1 3.1 Backgr ound of Kazuo Kazuo Hirai
3
3.2 3.2 The “ Transiti onal” Phase
4
3.3 3.3 Evaluati Evaluati ng its Effectiveness
5
4.0 4.0 Assess th e Strength Strength s and Weakness Weakness of Current Leadership 4.1 4.1 Motivation 4.1.1 4.1.1 A Positi ve Worki ng Environ ment
5
4.1.2 4.1.2 Establish ing Relatio Relatio nshi ps
6
4.1.3 4.1.3 Develo Developi ping ng Talents
7
4.2 Team Team Dynami cs 4.2.1 4.2.1 Current Organizatio Organizatio n Form
7
4.2.2 4.2.2 Organi zation al Cultur Cult ure e
8
4.2.3 4.2.3 Influence of Atti tudes and Behaviours
9
4.3 Planning and Management 4.3.1 4.3.1 The Import Impo rt ance of Planni ng and Management Management
9
4.3.2 4.3.2 Sony’s Current Planning and Manage Management ment
10
4.3.3 4.3.3 Effectiveness of Current Leadershi Leadershi p
10
4.4 4.4 Strategy and Decision Makin Makin g 4.4.1 4.4.1 Hirai’s Strategy and Decisi Decisi on Making Making Process
11 2
4.4.2 4.4.2 Evaluatio Evaluatio n on Its Effectiveness
11
5.0 5.0 Effecti Effecti veness of Current Leadership tow ards Sony’s Futur e 5.1 5.1 Compariso n of Financial Ratio Ratio s
12
5.2 5.2 The Cause Cause of Ineffici ent Leadersh Leadersh ip
13
6.0 6.0 Recomm Recomm endations 6.1 6.1 The Soluti on – Transform ation
14
6.2 A New Beginni Begi nni ng
14
6.3 6.3 The 5 I’s of Transform ational Aspect
15
7.0 7.0 Conclus ion
16
8.0 8.0 Reference Reference Lis t and Bibl iogr aphy
17-2 17-22 2
9.0 9.0 Appendix es 8.1 8.1 Appendix A - Market Market Share Analysis
23
8.2 8.2 Appendix B - Competit or Financials
24-2 24-26 6
8.3 8.3 Appendix C - Board of Director s and Key Employees
27-3 27-31 1
8.4 8.4 Appendix D - Current Organization Struct ure
32
8.5 8.5 Appendix E - Consol idated Statement Statement of Income
33-3 33-39 9
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1.0 Introduction
1.1 1.1 Backgr Backgr ound o f Sony
Peter F. Drucker once said that “Management is doing things right whereas leadership is doing the right things.” In 1946, when Masaru Ibuka and Akio Morita set up Tokyo Telecommunications Engineering Corporation (currently known as Sony Corporation) and became one of the pioneers in the industry, it also marked the beginning of their leadership success. The company got on track with high aspirations and great confidence in the 20 technologically capable engineers they had, and became one of the most reputable mega technological giants in Japan. In 1958 the company name was changed to Sony Corporation. Over the years several candidates had been elected as Chief Executive Officer (CEO) and in 1st April 2012, the current CEO Kazuo Hirai their took over the leadership role of the conglomerate. (Sony, 2015)
1.2 The Vision
First founders Masaru Ibuka and Akio Morita knew that they had a team of dedicated and motivated engineers who shared the same aspirations. They thought of ways to unite each of them, encouraging them to embrace a firm cooperative spirit and unleash their technological capabilities without any reserve. They were clear of the vision they had for Sony, to "Become the leading global provider of networked consumer electronics, entertainment and services”. To them, nothing was more important than being a company that inspires with their technological spirit. (Sony, 2015)
1.3 The Mission
The corporate culture of Sony was very different from other typical Japanese organizations. Rather than establishing a system of control, Ibuka created a pleasant 4
working atmosphere, turning it into a dynamic workplace with an open-minded corporate culture. He created Sony’s mission statement, that is “to become a leading global provider of networked consumer electronics, entertainment and services”. For many years, Sony retained their vision and mission until Kazuo Hirai, the current CEO tried to change the company direction by shifting its focus to new businesses and unifying the company under his “One Sony” plan. This marked the beginning of his transactional leadership moves in Sony. (Wakabayashi, 2012)
2.0 Industr ies
2.1 Industry Portfo lio
Sony has a diverse industry portfolio. They are involved in electronics, games, music, movies and financial services. With a passion to create new markets, Sony was an early creator and dominator of consumer electronics and became famous for being the creator of “Walkman” and “Discman” in 1979 and the world’s first portable TV in 1960. Sony’s breakthrough in technology and innovation became their platform to enter the international markets. According to Forbes, (2015) although Sony faces challenges from competitors, its strong brand equity and corporate image remains in the hearts of their loyal supporters.
2.2 Curr ent Busi nesses
Sony only focuses on 3 main industries; entertainment, games and electronics at present. Warmen, (2014) commented that ever since the previous CEO Nobuyuki Idei took over the leadership role in 1997, he changed the entire structure of Sony’s operations, deviating from the original organization vision and mission which was set by the early founders, that is to pursue innovation and creativity, and to develop new technologies and products. Thereafter, his style of leadership was adopted by the CEOs who succeeded him. According to Adelstein and Stucky (2012), it was evident that this change caused Sony to lose its competitiveness which resulted in the company making huge losses. Having lost millions over the years, the current CEO 5
Hirai decided to focus on manufacturing products instead of pioneering new markets as reliable products of quality used to be their core competence, and that is what consumers still seek for.
2.3 Curr ent Competitor s
In today’s competitive business environment, organizations without a competitive advantage and strong leadership will lag behind in the industry. (Khan and Adnan, 2014) Sony faces strong competitors in every sector of their business. Big players like Panasonic, Philips, Sharp, Toshiba, Samsung and LG already hold bigger market shares than Sony. Countries like Korea, Taiwan and US have also outshone Sony in terms of technology and innovation. With respect to the games industry, Microsoft and Nintendo are the 2 other major players that are competing with Sony’s Playstation. As Maznevski, and Chudoba (2000) have mentioned, organizations face multiple challenges in today’s market. As such, survival in the present competitive environment requires prudent and well planned strategies that help to improve operational performance and create its competitive advantage. (Please refer to APPENDIX A and APPENDIX B for current market share and competitor financials)
3.0 Current L eadership
3.1 Backgr ound o f Kazuo Hirai
Current Sony Chief Executive Officer (CEO) Kazuo Hirai who took over the reins since 2012 was 24 years old when he first joined Sony. Born in Tokyo in the 1960s, he studied in an American university in Japan and graduated with a bachelor’s degree in Liberal Arts. His father was a banker who worked in U.S and his family lives in Canada therefore since young had the opportunity to travel too and fro these places, allowing him to pick up fluent English language skills. According to Bloomberg, (2015) he began his career with Sony Inc. (previously CBS) in 1984. His strategic and intellectual competency in his work performance helped him rose through the ranks and moved to Sony Music Japan’s New York office, where he led 6
the Sony Computer Entertainment Japan’s international business affairs. His years of hard work and perseverance paid off when he was appointed as the president and CEO of Sony in 2012. According to Alabaster, (2012) he was known as a charismatic veteran who has been groom to lead Sony. The fact that Hirai’s bilingual and bicultural background, and training under Howard Stringer has shaped him to become who he is today. Like previous CEO Howard Stringer, he also felt that Sony needs to go through restructuring and cut down its loss but the “DNA” of Sony will remain.
3.2 The “ Transiti onal” Phase
Sony has been making losses since 1995 during ex-CEO Nobuyuki Idei’s era and ex-CEO Howard Stringer’s era. When Hirai was made CEO, he was tasked with the mission of reviving Sony and it back to its competitiveness in its products. In an interview with Wall Street Journal, (2015) Hirai affirmed Sony’s commitment to innovation, commitment to bringing out new products whether it’s software or hardware contents or services, and their commitment to touch the emotions of consumers will not change, however at the same time, he was challenged with conflicting thoughts. He knew that to achieve corporate objectives, he would have to implement huge changes to Sony by adopting his own leadership style but at the same time, he was faced with the same issue like the 2 CEOs before him, and that is to retain Sony’s culture (Sanchez-Runde et al., 2011)
In the case of Sony’s current leadership, it is likely that Hirai has adopted a mixture of leadership styles. During the time of his leadership, Patel, (2015) mentioned that Sony was no longer an electronics company because Hirai sold away the company’s VIAOs personal computer unit and announced he would spin off the TV and Audio businesses into a wholly owned subsidiary. Hirai further comment he may consider to sell off Sony’s Smartphone and TV businesses entirely and focus more on the media and gaming units because he hopes to achieve his plans of reducing loss and regaining profits. The rationale behind his actions reminds us of what ex-CEO Howard Stringer had in mind, and that was to reduce loss.
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3.3 Evaluatin g Its Eff ectiveness
Things may be looking up for Sony at the moment under Kazuo Hirai’s leadership but in the long run, the future of Sony is still highly uncertain. Since its establishment, Sony successfully created an incredible brand name, however, its legend seem to fall apart ever since the past CEOs restructured the company as prior to that, strategic issues arose, and caused the company to experience declining profits.
According to Bloomberg, (2012) since Hirai took over the leadership role, he started executing his restructuring plan by closing down several factories, laying off employees, reducing the production of TVs and selling away VIAOs personal computer unit. It was because he had in mind his “One Sony” concept thus he believes that he should cut down on the operating cost of products that weren’t making profits, sell away products that weren’t making profit and accumulate funds to focuses on the 3 main industries; entertainment, games and electronics. On top of that, Hussain, (2012) said, that Hirai spent millions of dollars to acquisit cloud gaming venture, medical equipment manufacturers and bailout of Olympus, claiming that these were part of his plans to revive Sony. Hirai’s acquisition strategy appears to be different from the previous CEO however it still did not leverage on the core competency of Sony. Although the changes in practices were suppose to help steer Sony towards growth but somehow there isn’t enough evidence to justify whether these changes are successful or not.
4.0 Assess The Strengths and Weaknesses of Curr ent Leadershi p
4.1 Motivation
4.1.1 A Positi ve Work ing Envir onment
Like what Khan and Adnan, (2014) mentioned, leadership style does matter and contribute towards overall performance of any organization. It also plays a significant role in motivating and enhancing individuals and organizational performance. For the case of Sony, Smith, (2011) identified how Hirai 8
managed to keep his employees motivated by providing a positive working environment. As the CEO, he abides by human rights which involves the safety, healthy and efficient working environment. To prevent discrimination among their diverse group of employees, he established the Diversity committee which reports directly to him, and formulated the Diversity Policy as a common diversity statement for Sony Group. (Sony, 2015) and established a rewards system whereby employees’ gets rewarded based on their individual
performance and implemented the “Flexi Hours Scheme” so that employees get to spend time with their families, for he knew that having such schemes allows employees to satisfy their physiological and safety needs. (Lee et al, 2014)
4.1.2 Establi shi ng Relation ship s
Apart from having a good working environment, Lee et al, (2014) also note that under current leadership, employees could be assigned to higher level of the company based on their performance. Communication among employees is enhanced through team-based working environment as Hirai believes in engaging
everyone
to
establish
relationships.
Through
engagement,
employees are highly motivated as they are shaped to believe they are valued by the company, satisfying the belonging, self esteem and self actualization needs. Like what Warman, (2014) mentioned, the current leadership strategy of unifying the different divisions through the “One Sony” concept had somehow created a positive drive in employees and led them to generate more ideas.
However, all these mentioned will only occur if the higher management acknowledges the efforts of the employee, for under the current leadership “laying off employees” that are deem as incompetent is still inevitable.
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4.1.3 Developing Talents
To react to ongoing loss, Hirai tried to salvage the situation by laying off workers. This decision caused many employees to feel insecure and greatly damaged their morale. As such it prevents Sony from retaining good employees and attracting new talents for culturally, Japanese are known to be loyal to their company and will work till retirement. In certain aspect, Wakabayashi, (2012) commented, that the current leadership style and change in corporate culture caused some employees to go through psychological distress which may affect their work perf ormance.
Despite so, Hirai also understands the importance of retaining Sony’s “human assets” and emphasized the career development scheme for those employees who displayed outstanding performance. Lee et al, (2014) mentioned, under current leadership, Sony provides training and career development which can give employees a chance to get higher level of position at work. Selected candidates will be sent to Sony University where they train and develop skills of the managers and senior executives, for Hirai believed by investing on their managers and equipping them with additional set of skills enables them to create a better and efficient working environment.
4.2 Team Dynamic s
4.2.1 Current Organization Struct ure
According to Chatterji et al, (2012) Hirai announced a new management structure with effect on the day he officially took over the CEO position. He mentioned these changes were intended to drive revitalization and growth across Sony’s core electronics business, deliver compelling user experiences through convergence of the unique assets in place throughout the Sony Group. To achieve that, he reorganized Sony into three primary divisions namely Sony Electronics, Sony Entertainment, Sony Financial Services and unite the
Global Sales & Marketing, Corporate R&D, Manufacturing, 10
Logistics, Procurement & Quality, into common platforms, retaining the old reporting style. Ultimately, he believes these changes will help to establish rapid and optimized decision making process as “One Sony”, which will significantly reinforce and accelerate Sony’s overall business management. (Sony, 2012)
Despite implementing all these changes, the hierarchical functional structure of typical Japanese companies remained. Kimura, (2012) commented, Japanese firms widely exhibit political behaviours especially factional disputes and slow decision making process all because of the tall hierarchy in the organization therefore to complement the new management structure, the tall hierarchy have to be eliminated. (Please see Appendix B for .
4.2.2 Organization Culture
It has been noticed by Chatterji et al, (2012) that the new management team is made up of key executives who were responsible for the past successes of Sony therefore it showed evidence that Sony’s culture places a high premium on consensus building and longevity. As Hirai personally advocates culture diversity thus the Sony board of directors not only comprised of selected members of the executive management committee and non-employee veterans where among them, some of them were from different nationality. The current management team has broad industry experience, whereas the board of directors also have vast industry experience and seemed to be a power top management team but the mid to lower level employees thought otherwise. As the traditional Japanese culture values were deeply rooted in the minds of the veterans, many continued to oppose the changes that Hirai had made.
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4.2.3 Infl uence of Atti tudes and Behaviour s
According to Alabaster, (2012) Hirai was classified as a charismatic leader and enjoys building rapport with his employees. Although he knew that not everyone in Sony approved of the changes he had done to the organization, he maintained his cool and continued his employer-to-staff interaction. His positive attitude somehow paid off sometime in January 2015, when derailed launch of “The Interview” movie in United States was hacked by cyber hackers and caused a great hassle. Graaf, (2015) said that in the entire incident Hirai took his stand and commented his employees were the victims of ‘a vicious and malicious cyber-attack. Despite facing various speculations from media and public that the hacker could be someone from Sony, Hirai stood firm on his stand and said that he was proud of his employees for standing against this hacker incident.
4.3 Planning and Management
4.3.1 The Importance of Planning and Management
With the increase in innovation and competitors all over the world in the recent years, this has led to an erosion of Sony’s hold on the television and electronics industry. This coupled with the change in leadership over the years has resulted in Sony losing its competitiveness and creating massive losses. (Adelstein and Stucky, 2012)
As such, planning and management is extremely crucial in the future of Sony as it creates direction and ensures that Sony is well prepared to deal with the current crisis as well as future events. (DeWitt and Meyer, 2004)
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4.3.2 Sony’s Current Planning and Management
According to Chatterji et al, (2012) Kazuo Hirai who is the current CEO of Sony has attempted to take ownership of the situation and implement changes in Sony that he believes will bring Sony the old glory it once had. Kazuo Hirai’s main goals are to minimize losses and increase profitability in the long run. To achieve those goals, he has attempted to restructure how the company functions as a whole by reorganizing the top management employees.
4.3.3 Effectiveness of Current L eadership
Kazuo Hirai first began his career selling music for Sony’s record label, and it is known widely that he is not extremely knowledgeable about the technical aspect of products. However Alabaster, (2012) argued that does not imply that he would be unable to lead Sony to a better position in the industry. As mentioned earlier, the previous CEOs of Sony found it challenging to make tough decisions as they were afraid of the backlash that the changes could potentially bring.
With respect to Kazuo Hirai’s leadership of Sony since 2012, things have been looking up. He has been able to make radical changes like shifting away from the traditional consumer electronics businesses. His ability to plan and manage Sony as a whole has been a commendable effort. However, in order to stay in line with Sony’s vision and mission which focuses on innovation and quality products, which is also one of the few ways to be the industry leaders, Kazuo has to shift his focus from cost cutting to increased innovation. In Inagaki, (2015) opinion, it is only with increased innovation that Sony might possibly achieve success once again.
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4.4 Strategy and Decis ion Makin g Process
4.4.1 Hirai’ s Strategy and Decisi on Making Pro cess
36 years ago, when the concept of portable music devices was absolutely foreign to the world, Sony introduced the iconic Walkman. A company once known for its innovation has now been reduced to a company that is barely surviving and producing run of the mill products. (Hartung, 2012)
Hitt, et al, (2014) emphasized that each company’s strategy and decision making process should be moulded by the mission and the vision of the company. In the case of Sony, this would be the aim to "become the company most known for changing the worldwide poor-quality image of Japanese products", and “to become a leading global provider of networked consumer electronics, entertainment and services”. (Sony, 2015)
Apparently it is observed by Hussain, (2012) that Sony’s strategy under the leadership of Kazuo Hirai is to sell off assets and restructure loss-making units such as its TV business as it tries to get back to profitability.
4.4.2 Evaluatio n on Its Effecti veness
Strategy and decision making is an ongoing process that involves the assessment of Sony’s observed outcomes and implementing changes that aim to rectify and improve its current situation. In the case of Sony, where their short term goal is to reduce net loss, they have been very successful thus far. Ando, R. (2015) commented, in February 2015, Sony forecasted an operating profit instead of a loss for the financial year ending March 31. But it still expects to book a net loss in 2014/15, albeit a smaller amount than previously estimated.
To do so, Sony has made the decision to sell off its personal computer division and spin off the TV business. It has also axed thousands of jobs. It 14
was reported by Reuters, (2015) that Kazuo’s strategy to cut costs and focus on the sales of camera sensors and video games won him the support of 88% of Sony’s shareholders, despite the low returns on equity.
However, as much as Sony may be doing well currently in the sales of camera sensors and video games, success will be limited. Factors like increased competition as well as volatility in the industry may potentially worsen Sony’s losses. Diversification and innovation are two strategies that Kazuo could implement, both of which are in line with Sony’s mission and vision statements. (McDonald, 2013)
5.0 Effecti veness of Current L eadershi p Towards Sony’s Futu re
5.1 Compari son Of Financi al Ratio s
To determine the effectiveness of current leadership, Hitt et al, (2014) suggests using four types of financial ratios to compute the financial statistics and evaluate the organization’s performance. To test the effectiveness of Sony’s current leadership, a comparison has been done based on financial data from past CEO Norio Ohga and current CEO Kazuo Hirai. Through this assessment we will be able to justify whether the current leadership is effective towards the future of the organization.
Ratio
Formula
Year March 31, 1994
March 31, 2014
(JPY
(JPY
￥in
Millions)
￥ in
millions)
Profit Return on
Net profit before
Investment
taxes/Total Assets
102,162 / 4,269,885=
25,741 /
0.024
15,333,720= 0.002
15
Liquidity Current Ratio
Current Assets/Current
2,023,728 /
4,204,886 /
1,407,639= 1.44
4,783,614= 0.88
1,436,561
12,546,464
/4,269,885= 0.34
/15,333,720 =0.82
3,733,721/
6,682,274 / 733,943
671,992=5.56
=9.11
Liabilities Leverage Debt to Asset
Total Liabilities/Total Assets
Acti vi ty Inventory
Sales/ Inventory
Turnover
Above table shows the financial ratios under the two different leadership: Norio Ohga (1994) versus Kazuo Hirai (2014)
It is evident from the table that the current leadership style which Kazuo Hirai used to manage Sony is inefficient. Based on the above ratios, we can see the difference in every aspect.
5.2 The Cause of Ineffi cient Leadersh ip
The fact that Kazuo Hirai sold away Sony’s profitable businesses such as VAIO computers, “Spiderman” copyrights and attempts to reduce its production of TVs impacted most of the employees. According to Hartung, (2012) these decisions stirred up employees emotions causing them to fear losing their jobs and resulted in them losing interest towards their work. To them, they felt the change in company culture very much overwhelming, causing them to feel conflicted in their beliefs, especially those senior employees whom had worked in Sony since its early years. Many of them whom had pioneered with Sony could not adapt to the drastic change of leadership because they felt that the leader of Sony had lost sight of its original vision and mission, and the direction which it’s supposed to be heading.
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6.0 Recomm endations
6.1 The Solut ion - Transfor mation
Sony needs a complete transformation in their leadership practice if they wish to survive in the industry. Although it has been identified that current CEO Kazuo Hirai uses a hybrid of leadership styles however it is seems not effective. Kimura, (2012) mentioned, several of Sony’s previous employees commented the recent slump of Sony was caused by the spreading of an introvert attitude and a decline in market orientation due to organizational politics. In order to revive Sony and resume its former glory, Hirai needs to be a transformational leader. Lowe et al. (1996) mentioned that a successful transformational leader is capable of articulating a vision of the future that can be shared with peers and subordinates, intellectually stimulates subordinates and pays high attention to individual differences among people. Most importantly, they do not merely react to environmental circumstances; instead they will attempt to shape and turn them into favourable outcomes.
6.2 A New B eginni ng
For the case of Sony, the CEO first needs to introduce change by creating a new “DNA” through establishing new organizational structure, goals and objectives. According to Khan and Adnan, (2014) studies show the leadership style of the leader in the organization has a strong impact on the performance of the organization thus every strategic plan for Sony should be directed towards long-terms aspects and aligns with a new organization vision and mission. While Ejere and Abasilim (2013) defines transformational leadership as the process of influencing major changes in attitudes and assumptions of organisational members and building commitment for the organisation's mission and objectives, it is also essential for a transformational leader to raise follower’s consciousness levels about the importance and value of designated outcomes and ways to achieve them. The transformational leader should constantly motivate followers to transcend their own immediate self-interest for the sake of the mission and vision of the organisation.
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6.3 The 5 I’s o f Transfor mation al Aspect
As part of the “change” process, Ejere and Abasilim, (2013) suggested that the transformational leader should include these five variables that forms the essential aspects of the leadership. They are namely the idealised attribute, idealised influence,
inspirational
motivation,
intellectual
stimulation
and
individualised
consideration.
To further illustrate Ejere and Abasilim, (2013) explained; idealised attribute are noticeable when followers report that their leader is charismatic. Idealised influence allows a leader to instil pride, faith, and respect in followers causing them to connect and imitate their leaders. Inspirational motivation represents behaviour that provides symbols and simplified emotional appeals and these help to raise expectations and optimism amongst followers. Intellectual stimulation triggers followers on new ways of problem solving through proactive thinking. Individualised consideration is present when a leader delegates assignments, stimulates and coaches followers on an individual basis.
Like what Lowe et al, (1996) quoted, transformational leadership augments transactional management to achieve higher levels of subordinate performance with the primary difference residing in the process by which the leader motivates subordinates and in the types of goals set. Therefore it is believed that the above mentioned will help Sony in its full revival.
7.0 Concl usio n
Based on the various research, it is evident that Sony has not been doing well since the change of CEO in 1995, when Nobuyuki Idei took over and the situation worsen after Howard Stringer took over in 2005. Although Hirai has proven to lead Sony with a much efficient way as compared to the 2 ex-CEOs, however whether will his hybrid style of leadership succeed? No one knows. But the fact that he was bold enough to implement a completely new “One Sony” concept in a Japanese firm that is deeply rooted to its strong culture values shows that he really advocates what he said when 18
he replied in the interview with The Wall Street Journal, (2015) saying Sony must evolve. Although there are reports commenting, ever since Hirai took over the leadership role, there was an improvement in the profits. But many also criticised him for selling away Sony’s valuable assets to create those profits which are only shortterm measures, for they believed that if Sony doesn’t ride on its core competency of utilising their innovations and technological strength to strengthen their competitive edge over competitors, it would be useless to execute any strategy.
Therefore in the case of Sony, it is suggested for Hirai to be decisive and decide on a full transformational leadership style rather than adopting a mixture of leadership styles. Sony’s brand equity still holds weight in many consumers’ heart but the negative impact caused by inappropriate leadership over the past 10 years still lingers around. Through a transformational leadership whereby a new organization goal, new vision and new mission is set and carried out by a charismatic leader nominee Hirai, chances are high that he will be able to wield positive influences not only to his staff but also to consumers that grew along with Sony. If Hirai succeeds in doing that, Sony will truly experience a breakthrough. …………………………………
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8.0 APPENDIX
APPENDIX A: MARK ET SHARE ANAL YSIS
Source: Statista. (2015) Global market share held by LCD TV manufacturers from 2008 to 2014. Available at: http://www.statista.com/statistics/267095/global-market-share-of-lcd-tv-manufacturers/ (Accessed on 18 June 2015)
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APPENDIX B: COMPETITOR’S FINANCIALS
Source: Hoovers Inc (2015). LG Electronics Inc. Revenue and Financial Data. Available from: http://www.hoovers.com/company-information/cs/revenuefinancial.LG_Electronics_Inc.70e242f293f08235.html (Accessed on 6 July 2015)
Source: Hoovers Inc (2015). Panasonic Corporation Revenue and Financial Data. Available from: http://www.hoovers.com/company-information/cs/revenuefinancial.PANASONIC_CORPORATION.d06ee749b8495923.html(Accessed on 6 July 2015) 27
Source: Hoovers Inc (2015). Koninklijke Philips N.V. Revenue and Financial Data. Available fr om: http://www.hoovers.com/company-information/cs/revenuefinancial.Koninklijke_Philips_NV.e365f2b0ec2860c6.html (Accessed on 6 July 2015)
Source: Hoovers Inc (2015). Samsung Electronics Co., Ltd Revenue and Financial Data. Available from: http://www.hoovers.com/company-information/cs/revenuefinancial.Samsung_Electronics_Co_Ltd.a166cb2c88a2e408.html(Accessed on 6 July 2015) 28
Source: Hoovers Inc (2015). Sharp Corporation Revenue and Financial Data. Available from: http://www.hoovers.com/company-information/cs/revenuefinancial.SHARP_CORPORATION.08be94e9230b9527.html(Accessed on 6 July 2015)
Source: Hoovers Inc (2015). Toshiba Corporation Revenue and Financial Data. Available from: http://www.hoovers.com/company-information/cs/revenuefinancial.TOSHIBA_CORPORATION.ebe2542309947e1d.html(Accessed on 6 July 2015) 29
APPENDIX C: BOARD OF DIRECTORS AND KEY EMPLOYEES
Board Of Directors (As of 19 June 2014) Chairman Of The Board: Chairman of the Board Osamu Nagayama Members of the Board: Kazuo Hirai
Representative Corporate Executive Officer, President and Chief Executive Officer
Kenichiro Yoshida
Representative Corporate Executive Officer, EVP and CFO
Kanemitsu Anraku
Director, Mizuho Financial Group, Inc.
Osamu Nagayama
Representative Director, Chairman and Chief Executive Officer, Chugai Pharmaceutical Co., Ltd
Takaaki Nimura
Certified Public Accountant
Eikoh Harada
Chairman, Director, Macdonald's Holdings Company (Japan), Ltd Macdonald’s Company (Japan), Ltd
Joichi Ito
Director, Massachusetts Institute of Technology (MIT) Media Lab
Tim Schaaff
Retired President, Sony Network Entertainment International LLC Independent Start-up Advisor
Kazuo Matsunaga
Retired Vice-Minister of Economy, Trade and Industry
Koichi Miyatai
President, Sumitomo Mitsui Financial Group, Inc
John V Roos
Former United States Ambassador to Japan
Eriko Sakurai
Chairman and CEO, Dow Corning Toray Co., Ltd
Source: Sony Corporation (2014) Sony Corporation Executive Appointments. Available at: http://www.sony.net/SonyInfo/News/Press/201406/14-061E/index.html (Accessed on 6 July 2015)
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Corporate Executi ve Officers
(As o f 23 June 2015)
Representative Corporate Executive Officers:
Kazuo Hirai
President and Chief Executive Officer
Kenichiro Yoshida
Executive Deputy President and Chief Financial Office
Corporate Executive Officers:
Tomoyuki Suzuki
Executive Deputy President Officer in charge of Device Solutions Business and RDS Platform President of Device Solutions Business Group
Shiro Kambe
Executive Vice President Officer in charge of Legal, Compliance, Corporate Communications CSR and External Relations
Masashi Imamura
Executive Vice President Officer in charge of Manufacturing, Logistics, Procurement, Quality and Environmental Platform and Engineering Platform
Shigeki Ishizuka
Executive Vice President Officer in charge of Imaging Products & Solutions Business President of Professional Solutions Group President of Digital Imaging Business Group Executive Vice President, Sony Group China Representative In charge of Disc Manufacturing Business
Shoji Nemoto
Keiichiro Shimada
Senior Vice President In charge of Mid-to-Long term Technology, RDS Platform In charge of Technology Policy and Relations
Yoshito Ezure
Senior General Manager of Energy Division, Device Solutions Business Group Representative Director and President, Sony Energy Devices Corporation
Toru Katsumoto
President of Medical Business Unit Representative Director and President, Sony Olympus Medical Solutions Inc 31
Fumiaki Sakai
Chief Information Officer
Hideyuki Furumi
President of UX, Marketing Group, UX Platform
Masayuki Hattori
President of System R&D Group, RDS Platform President of Device & Material R&D Group, RDS Platform
Teruo Hirayama Toshimoto Mitomo Toshihiko Ohnishi
In charge of Intellectual Property Deputy President of Imaging Products and Solutions Sector Deputy President of Professional Solutions Group
Terushi Shimizu Natsuko Takei
Deputy President of Device Solutions Business Group Senior General Manager of Legal & Compliance Department
Hiroichi Kawahira
President of Advanced Materials Laboratories, Device & Material R&D Group, RDS Platform
Kazushi Ambe
In charge of Human Resources and General Affairs
Hiroyuki Sato
Deputy President of Digital Imaging Business Group, Imaging Products and Solutions Sector
Kazuhiko Takeda
In charge of Accounting Senior General Manager of Corporate Planning & Control Department
Source: Sony Corporation (2015) Sony Corporation Executive Appointments. Available from: http://www.sony.net/SonyInfo/News/Press/201505/15-049E/index.html (Accessed on 6 July 2015)
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Group Executives Michael Lynton
(as of 23 Ju ne 2015)
CEO, Sony Entertainment Inc. Chairman & CEO, Sony Pictures Entertainment Inc. CEO, Sony Corporation of America
Katsumi Ihara
Executive President and Representative Director, Sony Financial Holdings Inc. Chairman, Director, Sony Life Insurance Co., Ltd.
Nobuki Kurita
Chairman and President, Sony (China) Co., Ltd
Doug Morris
CEO, Sony Music Entertainment
Andrew House
In charge of Game & Network Services Business President and Global CEO, Sony Computer Entertainment Inc.
Martin Bandier
Chairman & CEO, Sony / ATV Music Publishing LLC
Hiroshi Kawano
President, Corporate Executive, Representative Director, Sony Marketing of Japan Inc.
Masaru Tamagawa
President, Sony Europe Ltd
Nicole Seligman
President, Sony Corporation of America President, Sony Entertainment Inc. Senior Legal Counsel, in charge of Information Security, Sony Group
Kunimasa Suzuki
Executive Vice President, Sony Entertainment Inc
Hiroki Totoki
In charge of Mobile Communications Business President & CEO, Sony Mobile Communications Inc.
Izumi Kawanishi
Director, EVP, Sony Mobile Communications Inc. In charge of Solutions Software Development, Professional Solutions Group, Sony Corporation (Advisory role)
Ichiro Takagi
In charge of Home Entertainment & Sound Business In charge of Consumer AV Sales Platform
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Representative Director and President, Sony Visual Products Inc. President of Video & Sound Business Group, Sony Corporation Yasuhiro Ueda
President, Representative Director, Sony Semiconductor Corporation
Michael Fasulo
President and COO, Sony Electronics Inc.
Tomoo Hagimoto
President, Representative Director, Sony Life Insurance Co., Ltd.
Michinori Mizuno
Representative Director and CEO, Sony Music Entertainment (Japan) Inc.
Hidehiko Teshirogi
SVP, Deputy Head of Product Business Group, Sony Mobile Communications Inc. In charge of TS Business, Sony Corporation
Source: Sony Corporation (2015) Sony Corporation Executive Appointments. Available from: http://www.sony.net/SonyInfo/News/Press/201505/15-049E/index.html (Accessed on 6 July 2015)
APPENDIX D: ORGANIZATION STRUCTURE
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Source: Sony Corporation (2015) Organization Data. Available at: http://www.sony.net/SonyInfo/CorporateInfo/Data/organization.html(Accessed on 6 July 2015)
APPENDIX E: CONSOLIDATED STATEMENT OF INCOME
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Source: Sony Corporation. (2014) Financial Report for 1994. Available at: http://www.sony.net/SonyInfo/IR/financial/ar/8ido18000005flqz-att/1994-E.pdf (Accessed on 30 June 2015)
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Source: Sony Corporation. (2014) Financial Report for 1994. Available at: http://www.sony.net/SonyInfo/IR/financial/ar/8ido18000005flqz-att/1994-E.pdf (Accessed on 30 June 2015)
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Source: Sony Corporation. (2014) Financial Report for 1994. Available at: http://www.sony.net/SonyInfo/IR/financial/ar/8ido18000005flqz-att/1994-E.pdf (Accessed on 30 June 2015)
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Source: Sony Corporation. (2014) Financial Report for 1994. Available at: http://www.sony.net/SonyInfo/IR/financial/ar/8ido18000005flqz-att/1994-E.pdf (Accessed on 30 June 2015)
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Source: Sony Corporation. (2014) Financial Report for 2014. Available at: Available at: http://www.sony.net/SonyInfo/IR/investors/97_Consolidated_Financial_Statements.pdf (Accessed on 30 June 2015)
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Sony Corporation. (2014) Financial Report for 2014. Available at: Available at: http://www.sony.net/SonyInfo/IR/investors/97_Consolidated_Financial_Statements.pdf (Accessed on 30 June 2015) Source:
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