Review Case For Analysis and answer the following:
Sony's "Gaijin" CEO is Reorganizing the Company
Sony, the famous Japanese electronics maker, was renowned in the 1990s for using its engineering prowess to develop blockbuster new products such as the Walkman, Trinitron TV, and Play station. Its engineers churned out an average of four new product ideas every day, something attributed to its culture, called the "Sony Way", which emphasized communication, cooperation, and harmony among its company-wide product engineering terms. Sony's engineers were empowered to pursue their own ideas, and the leaders of its different division, and hundreds of product teams were allowed to pursue their own innovations-no matter what the cost. While this approach to leadership worked so long as Sony could churn out blockbuster products, it did not work in the 2000s as agile global competitors from Taiwan, Korea, and the United States innovated new technologies and products that began to beat Sony at its own game.
Companies such as LG, Samsung, and Apple innovated new technologies such as advanced LCD flat-screens, flash memory, touch-screen commands, mobile digital music, video, and GPS, positioning devices, and 3D displays that made many of Sony's technologies, such as it Trinitron TVs and Walkmans obsolete. For example, products, such as Apple's iPod and iPhone and Nintendo Wii game console met customer needs that Sony's out-of-date and expensive products. Why did Sony lose its leading competitive position?
One reason was that Sony's organizing approach no longer worked in its favor because the leaders of its different product divisions worded to protect their own personal empires and division's goals and not those of the whole company. Sony's leaders were slow to recognize the speed at which technology was changing and as each division's performance fell, their leaders felt threatened and competition between them increased as they sought to protect their own empires. The result was slower decision making and increased operating costs as the leaders of each division competed to obtain the funding necessary to develop successful new products.
By 2005 Sony was in big trouble; and at this crucial point in their company's history, Sony's top managers turned to a gaijin, or non-Japanese, executive to lead their company. Their choice was Sir Howard Stringer, a Welshman, who as the head of Sony's U.S operations has been instrumental in cutting costs and increasing profits. Stringers was known to be a directive but participative leader; although he was closely involved in all U.S. top management decisions he nevertheless then gave his top executives the authority to develop successful strategies to implement these decisions.
When he became Sony's CEO in 200e Stringer faced the immediate problem of reducing operating costs that were double those of its competitors because the leaders of its divisions had essentially seized control of Sony's top-level decision-making authority. Stringer immediately recognized how the extensive power struggles among the leaders of Sony's different product divisions were hurting the company. So, adopting a directive, command-and-control leadership approach, he made it clear that this had to stop and that they needed to work quickly to reduce costs-but he also urged them to cooperate to speed product development across divisions. By 2007 it was clear that many of Sony's most important divisional leaders were still pursuing their own goals and were ignoring Stringer's orders.
By 2008 Stringer had replaced all the divisional leaders who resisted his orders, and he worked steadily to downsize Sony's bloated corporate headquarters staff and replace the leaders of functions who also put their own interest first. He promoted younger managers to lead its divisions and functions-managers who would obey his orders and focus on the company's performance because Stringer said over time the culture or business of Sony had been management- not making new products.
To turn around Sony's still declining performance, Stringer had to adopt an even more directive approach. In 2009 Stringer announce he would take charge of the Japanese company's struggling core electronics group and would add the title of president to his existing roles as chairman and CEO as he reorganized Sony's divisions. He also replaced four more of its most important leaders with managers who had held positions outside Japan and were "familiar with the digital world". In the future, he also told managers to prioritize new products and invest only in those with the greatest chance of success so Sony could reduce its out-of-control R&D costs.
By 2010 Sony's financial results suggested that Stringer's initiatives were finally paying off; he had stemmed Sony's huge losses, its products were selling better, and Stringer hoped Sony would become profitable by the end of 2011. To help ensure this Stringer also took charge of a newly created networked products and services group that included its Vaio computers, Walkman digital media players, PlayStation, gaming console, and the software and online services to support these products. Stringer's organizing approach was still focused on helping Sony regain its global leadership in electronic products.
In January 2011 Stringer announced that Sony's performance had increase so much that it would be profitable in the second half of 2011. Then within months came the news that hackers had invaded Sony PlayStation website and stolen the private information of millions of its users. Sony was forced to shut down its PlayStation website for weeks and compensate users, and together it expects the losses from this debacle to exceed $1billion as well as the cost to its brand name. In addition, it also became clear that customers were not buying its expensive new 3D flat screen TVs and its revenues from consumer products would be lower than expected because of intense competition from companies like Samsung. In June 2011 Stringer reported that now the company expected to make a record loss in 2011, so his turnaround efforts have been foiled so far.
Sony
Review and reflect on the case study Consider the CEO's reorganization. What environmental constructs were involved? Why did the CEO have to adapt, control, and reduce uncertainty? Identify the mechanistic versus organic structures and how contingency theory was or was not applied in this case study.
Your paper must be at least two pages in length, not including the title page or reference page. You are required to use at least your textbook as source material for your response. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.
Note: Please use in-text citation, reference to include book 12 font,
Book Ref: Jones, G. R. (2013). Organizational theory, design, and change (7th ed.). Upper Saddle River, NJ: