Product details

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Abstract

Sony, the Japan-based multinational conglomerate, is one of the leading manufacturers of consumer electronics devices and information technology products. Sony was responsible for introducing path breaking products like the Walkman, the Discman, and the PlayStation gaming console, among others. But in the late 1990s, it lost its leadership position in many product lines in which it was operating. Analysts attributed this to the silo culture prevailing in the organisation. Each of the departments functioned like different fiefdoms, hardly co-operating with each other, even when it was necessary. Moreover, Sony's growing complacency led to its failing to recognise the growing popularity of new technologies and digital products and the company choosing to stick to its proprietary formats. Sony was caught off-guard and tried to revive itself under the guidance of its first non-Japanese head Howard Stringer, who took over as the CEO in 2005. For a couple of years, Sony appeared to be on the path to revival. However, for the fiscal year ending March 2009, the company reported a loss. Sony's failure to bring out innovative products in spite of having the required competencies was one of the main reasons for the company's problems, and analysts attributed it to the existing culture in the company. In February 2009, with the aim of addressing the issue of its silo culture, Stringer announced a reorganisation that involved changes in the organisation structure. Through this reorganisation, he sought to transform Sony into an innovative and agile company. However, it remains to be seen whether the reorganisation can bring Sony out of its problems.

Teaching and learning

This item is suitable for postgraduate and executive education courses.

Time period

The events covered by this case took place in 2005-2009.

Geographical setting

Region:
Asia
Country:
Japan

Featured company

Sony
Industry:
Consumer electronics

About

Abstract

Sony, the Japan-based multinational conglomerate, is one of the leading manufacturers of consumer electronics devices and information technology products. Sony was responsible for introducing path breaking products like the Walkman, the Discman, and the PlayStation gaming console, among others. But in the late 1990s, it lost its leadership position in many product lines in which it was operating. Analysts attributed this to the silo culture prevailing in the organisation. Each of the departments functioned like different fiefdoms, hardly co-operating with each other, even when it was necessary. Moreover, Sony's growing complacency led to its failing to recognise the growing popularity of new technologies and digital products and the company choosing to stick to its proprietary formats. Sony was caught off-guard and tried to revive itself under the guidance of its first non-Japanese head Howard Stringer, who took over as the CEO in 2005. For a couple of years, Sony appeared to be on the path to revival. However, for the fiscal year ending March 2009, the company reported a loss. Sony's failure to bring out innovative products in spite of having the required competencies was one of the main reasons for the company's problems, and analysts attributed it to the existing culture in the company. In February 2009, with the aim of addressing the issue of its silo culture, Stringer announced a reorganisation that involved changes in the organisation structure. Through this reorganisation, he sought to transform Sony into an innovative and agile company. However, it remains to be seen whether the reorganisation can bring Sony out of its problems.

Teaching and learning

This item is suitable for postgraduate and executive education courses.

Settings

Time period

The events covered by this case took place in 2005-2009.

Geographical setting

Region:
Asia
Country:
Japan

Featured company

Sony
Industry:
Consumer electronics

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