An Assessment of Sony Corporation’s Organizational

Culture and Structure

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Introduction

“It’s a Sony!” Sony is one of today’s leading brand in electronics, from personal
to home entertainment audio and video system, communications gadget, broadcasting and
other professional electronic devices, personal computer, digital camera, to robots. Sony
Corporation is a Japanese electronics giant, and has now evolved into a multinational
company. This essay brings to light Sony Corporation’s organizational culture and
structure. Also, it is going to analyze the extent in which organizational culture and
structure impede or contribute to the effectiveness of the organization. The following
paragraph shows a brief history of the work organization.

A Brief History of Sony

In 7 May 1946 at Nihonbashi, Tokyo, Masaru Ibuka and Akio Morita gave birth
to Tokyo Tsushin Kogyo K.K. (Tokyo Telecommunications Engineering Corporation),
otherwise known as Totsuko. Four years after, the “Sony tape”, the first magnetic-coated
and paper-based recording tape of Japan, was introduced in the market. Then in 1955,
Totsuko made a decision to change the logo of its products, by labeling them as Sony. In
January three years after, the company shifted its name from Totsuko to Sony
Corporation; and by the end of the year, Sony was registered in the Tokyo Stock
Exchange. The year 1960 marked the beginnings of Sony Corporation’s expansion, in
the United States of America, to Hong Kong, to China, and to the different countries
across the globe. Different electronic products were introduced in the market. Until
now, Sony is one of the leading electronics brand.

Organizational Culture and Structure: The Sony Way

The working definitions of organizational culture in this essay are taken from the
lectures at hand. According to Morgan (1986), it refers to the “…pattern of development
reflected in a society’s system of knowledge, ideology, values, laws, and day-to-day
ritual”. Organizational culture, as said by Schein (1985), is related with the “observed
behavioral regularities, norms, values, philosophies or policies, the “rules of the game”,
and the “feeling or climate” obtained by the individual as a member of the organization
(p.6,9). In essence, the culture within a certain organization is produced by the members
themselves that comprise the organization. They are driven by their organizational goals,
which affect the life of the organization. In this essay, the data on the organizational
culture has been obtained through secondary sources from different print and electronic
published materials.

What Mr. Ibuka has envisioned for the company then was “to create a stable work
environment where engineers who had a deep and profound appreciation for technology
could realize their societal mission and work to their heart’s content.” In order to
stimulate his employees personally, he thought of making them “embrace a firm
cooperative spirit and unleash their technological capacities without any reserve” (Sony
History). Such aspiration of the founder therefore is what he wanted to see in the
organization that he was then about to create.

Incorporation objectives include the following: 1) to establish an ideal factory

that stresses a spirit of freedom and open-mindedness, and where engineers with sincere
motivation can exercise their technological skills to the highest level; 2) to reconstruct
Japan and to elevate the nation’s culture through dynamic technological and
manufacturing activities; 3) to promptly apply highly advanced technologies which were
developed in various sectors during the war to common households; 4) to rapidly
commercialize superior technological findings in universities and research institutions
that are worthy of application in common households; 5) to bring radio communications
and similar devices into common households and to promote the use of home electric
appliances; 6) to actively participate in the reconstruction of war-damaged
communications network by providing needed technology; 7) to produce high-quality
radios and to provide radio services that are appropriate for the coming new era; and 8) to
promote the education of science among the general public (Sony History).

It is interesting to note the underlying ideologies behind these objectives that

Sony Corporation has set. The national culture is evident in the way these objectives are
created, aside from the fact that this work organization was born during the aftermath of
the World War II. Mr. Ibuka has pictured that his company will serve as his contribution
for national development, and that technology is the key to their growth. This is in line
with the national advancement that the Japanese government was aiming at then.
 How reliable is the very first incorporation objective? In an interview with Mr.
Yoshihide Nakamura, the current deputy president of Sony’s Core Technology and
Network Company, when asked to describe the existing culture within Sony, his
testimony says,
“…But Sony’s culture is a mix of very Japanese thinking and not very
Japanese thinking. In a sense we are very free. We are not forced to do
anything as long as we are doing a good job. You really have freedom
in Sony. If you’re innovative, you are given new opportunities. Some
people who may not really be suited for anything in other companies
can still survive in Sony. They will be given an opportunity to try to
realize their dream. … (Beamish 2000)”

These are Sony Corporation’s management policies. The first policy states, “we
shall eliminate any unfair profit-seeking practices, constantly emphasize activities of real
substance and seek expansion not only for the sake of size.” Second, “we shall maintain
our business operations small, advance technologically and grow in areas where large
enterprises cannot enter due to their size.” Third, “we shall be as selective as possible in
our products and will even welcome technological challenges. We shall focus on highly
sophisticated technical products that have great usefulness in society, regardless of the
quantity involved. Moreover, we shall avoid any formal demarcation between electronics
and mechanics, and shall create our unique products uniting the two fields, with a
determination that other companies overtake.” Fourth, “we shall fully utilize our firm’s
unique characteristics, which are well known and relied upon among acquaintances in
both business and technical worlds, and we shall develop production and sales channels
and acquire supplies through mutual cooperation.” Fifth, “we shall guide and foster sub-
contracting factories in ways that will help them become independent, and we shall strive
to expand and strengthen mutual cooperation with such factories.” Sixth, “we shall
carefully select employees, and our firm shall be comprised of minimal number of
employees. We shall avoid to have formal positions for the mere sake of having them,
and shall place emphasis on a person’s ability, performance and character, so that each
individual can fully exercise his or her abilities and skills.” Lastly, “we shall distribute
the company’s surplus earnings to all employees in an appropriate manner, and we shall
assist them in a practical manner to secure a stable life. In return, all employees shall
exert their utmost effort into their job” (Sony History).

Many distinct features lie underneath these management policies by Sony

Corporation. First is the use of the word “we”, which implies the organization’s
commitment to work as a team. This feature is distinctly Japanese, or Asian or Eastern,
as opposed to the West’s individual-based work being the norm. It has also been found
out that during the beginnings of the company, its pioneers were really hardworking that
they work even until after the work hours or until midnight. Among the Japanese
managers, working for long hours, i.e. 12-14 hour workdays adding in “semiobligatory
evenings out with their work team”, is said to be the norm (Earley 1997, p. 180).

Secondly, minimalism or miniaturism is distinctly Japanese, as evidenced in their

material culture. Thirdly, there is a stress on innovation. Innovation is a significant idea
for the Japanese. According to Goto and Odagiri (1997), technology has been deemed as
the driving force at the back of the Japanese manufacturing firms’ victory, and the
Japanese economy at the same time. As of the moment, what prompted research
pertaining to Japan’s innovations system is its function to Japan’s speedy economic
growth and modernization (p.1). In Sony’s eyes, the key to success is by possessing
the attitude of being innovative. According to Mr. Nakamura,
“…Winners win and losers lose, so it has become quite obvious in
many industries in Japan that anybody who is creative and innovative
can really make money and anyone who has maintained the status quo
and is not really creative is losing ground and even going bankrupt”
(Beamish 2000).

Four buzzwords are expected for the entire companies in the Sony Group to
resonate. Unique, being so guarantees Sony’s always being innovative. Quality, is what
describes its products. Speed, is to refer to the adaptability of Sony to the market
environment. Cost, points to the significance of competitive pricing once the three are
established (Sony History). These are the essential components of Sony Corporation’s
organizational culture today. It has responded to the current demands, which are
necessary in order to thrive in the global market.

In April 1999, Sony Corporation has reorganized its structure. The reason?
According to Mr. Nakamura, considering the dawn of the digital network era of the
21st century, the company deemed it necessary to adapt a new and realign its
organizational structure. Sony is indeed a giant now, but as much as possible the
company wanted to maintain the spirit of being “a small venture company”. In doing so,
President Nobuyuki Idei, who became president in April 1995, created two slogans —
“Regeneration” and “Digital Dream Kids” (Beamish 2000). Says President Nobuyuki,
“It is a chance to collaborate with team spirit – not as individuals, but
as a team…To ensure that Sony remains an excellent company over its
 next fifty years, I have set forth ‘regeneration’ as a new management
theme. This is a concept that preserves the original founding spirit by
renewing ourselves and aiming for even greater heights… Living in the
digital age is very exciting for people of all ages. Young and old alike
are truly mesmerized by digital technology. These digital dream kids,
are our future customers. And at all levels of Sony, we must ourselves
become dream kids to continue creating new products that will meet
our future customers’ expectations (Sony History).”

Sony deconstructed itself into four divisional companies. These are Home
Networking Company, Personal and Information Technology Network Company, Core
Technology and Network Company, and Sony Computer Entertainment (Beamish 2000).
The following figure is obtained from Sony Corporation’s Website.

In terms of hiring its employees, according to Mr. Nakamura, Sony wants to have
good individuals of heterogeneity (Beamish 2000). The management policy refers to the
hiring as only to carefully select. In reality, it hires not only or merely individuals who
come from the engineering field, but those who have a good eye for the electronic
products. Note that its current CEO today is even of an American nationality, Howard
Stringer. An employee is said to acquire a “certain magical feeling”. According to Mr.
Nakamura, to work for Sony means “a feeling of pride and security” to the local populace
(Beamish 2000).

The procurement or purchasing activities of Sony are said to be grounded on two

major principles. The first one deals with the customers, or global customers to date.
They are to meet the expectation of the customers being, that Sony products and services
tender a high level of value. Likewise, customers expect that Sony is a good corporate
citizen by way of its operations. The second one deals with the relationship with the
company’s suppliers. Since the raw materials for the production of their products come
from various suppliers across the globe, procurement activities therefore require “smooth
relationships” that are founded on “trust and cooperation”. Sony puts a premium on
keeping a good partnership with its suppliers. It is in this manner that Sony believes it is
able to deliver its products as well as services best (Sony History).

The organization under study is found to be placing a premium on maintaining a

good relationship with its suppliers. This resounds with the concept of “keiretsu”.
Simply put, it implies collaboration among firms with other firms of a different industry
by way of “intercorporate stockholding and personnel transfer” (Lebra 1992, p. 139-
140). This leads to a powerful business bloc. Clearly indeed that Sony Corporation
considers the entire key players, from employees to consumers to suppliers, in their
actions and decisions. According to Sony Executive Keiji Nakazawa, all Japanese
companies arrive at decisions quickly, but before arriving at a certain decision;
everything has to be completely taken into consideration in order to produce first a
detailed business plan (Kageyama 2005).

Sony Corporation’s Efficiency

Sony Corporation stands on a very strong base, which is rooted from its
organizational culture. This essay believes that the organization is truly strong in terms
of its widely held goals, values, policies, and principles. All of which are clear, as
detailed in this essay. And, it is strongly held by its members, especially its founders.
This in turn, defines the organization’s success story that keeps on burning in every
employee’s heart. Employees are encouraged to be participative enough and to work as a
team. They are free to open their ideas. It is in this state that the organization is able to
“regenerate”, thereby contributing to its efficiency.

Sony’s minimalist perspective, combined with innovation, have a bearing for the
effectivity of Sony for its products and their performance. For instance, when Sony
launched its Walkman to the market, consumers have been very receptive to the idea of a
personalized audio gadget. Add the fact that Sony has been in an advantage position for
being the first to introduce such kind of product. According to Covin & Miles (1999), the
risk behind Sony’s way of introducing innovative products in the markets is reasonably
minimal, because small only a few resources are needed (p. 47). Add the fact that the
products are asked to be developed with quality and uniqueness, Sony Corporation is able
to manage better its performance. This is also in line with the “digital dream kid” that is
said by President Nobuyuki.

Interestingly, the organization employs a good decision-making process. There is

a tendency to accumulate various responses or views from the employees because of their
team-based nature of working. The executives are better equipped with the information
needed to come up with a decision because of this, and the fact that decisions are realized
according to its projected effect to the key actors in the market environment.

Furthermore, Sony Corporation is in a position of advantage upon restructuring

itself. As reflected in Table 1, it has employed a structure that is independent yet
interactive with the other branches of the organization. Recall that one of its principles
too is to maintain the company small yet strong. As Lebra (1992) puts it, crosscultural
interactions fill in the Japanese manufacturers’ organizational culture (p. 156). It has
decentralized, yet it better facilitates the needs of the company to survive in the
21st century.

Sony Corporation’s 2 major principles in its procurement activities likewise

contribute to its efficiency. As what has been discussed, according to Harvard University
Professor, “firms should add value to the product that they get from their suppliers before
they pass it on to their customers, otherwise they have no justification for being in
business”. By being careful in the purchase of its raw materials as well as in maintaining
a good relationship with its suppliers, the organization is able to create and maintain
unique and quality products at the same time for the benefit of its consumers across the
globe.

The organization has learned a lot from its earliest failure — the electric rice
cooker. Mr. Ibuka has dwelt on the idea of creating a device that is used on a daily basis.
But, it has turned out to be a failure because of lack of further research and the wrong
rice. He has worked on this by incorporating perseverance to innovate products back to
back with looking for the right kind of rice.

Conclusion

Organizational culture and structure forms the backbone of an organization, like

Sony Corporation. It has been proven that organizational goals, such as profit goals, is
dependent on the kind of culture and structure that exist within the organization. That
change is the only constant thing in the world is a line often heard, but this teaches
organizations to adapt to the existing environment in order to survive. This is the
principle behind Sony Corporation’s innovation. Diversity and decentralization matter to
the organization. Needless to say, organizational culture defines the efficiency of the
organization, especially in the attainment of its goals.
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Sony Corporation
Company Profile, History and Culture, and SWOT

Executive Summery
Sony's current financial difficulties are tied into its corporate culture which were stated over 30 years ago.
With such a large multinational corporation, greater planning and more use of strategies should be pursued.
Sony could start with the implementation of a new mission statement, with profit and benefits of the
company tied more closely to everyday operations. Internally, the four forces, the management, the
designers, the production and the marketing should achieve better communication and cooperation. Alliance
and cooperation between competitors should also be actively sort after in order to create standards in new
fields. Sony should aim at being the leader instead of being the maverick. As for cost cutting, Sony should
seriously consider setting up operations in other Asian countries in order to take advantage of the cheap
labour and the budding markets. Finally, diversification, instead of pursuing the fast changing and easily
imitated consumer goods market, Sony should use its technological know-how for high-end business and
office equipment.

With SWOT analysis and Porter's competitive forces model, we can view that the market is much more
competitive with less profit margins and lead-time for product innovation. The conclusion is that change is
needed in Sony. However,even with strategirial and structure change, the Sony spirit of innovation should
remain intact because that is what made Sony grow and would make it stay strong.

Introduction

The first thing that comes to peoples minds of the company and products of Sony is its high-technology-
filled-with-gadgets electronic goods and innovation. It was also this innovation that make Sony the greatest
company that started in post-war Japan. Sony has used its innovation in building markets out of thin air,
created a multibillion, multinational electronic empire with products such as the transistor radio, the Trinitron,
the Walk-in and the VTR. that changed everyday household lives forever. However, this consumer targeted
quest for excellence and constant innovation instead of targeting mainly at profit also has a lot to do with
current crisis Sony is facing - sales and profits are down or are slowing down, capital investment cost and
R&D are climbing, competitors are moving in with copycats, the battle between VHS and Beta and the
search for a smash hit product such as the Trinitron or the Walk-in. This volatility and emphasis (or
gambling) on new products instead of concentrating on profit and loss statements have always been a part
of Sony since its beginning days. For each successful product (i.e. transistor radio and Trinitron), R&D cost
often ran so high that the they pushed the firm to the verge of bankruptcy. This can also be seen through the
eyes of the investor in which although sales have increased tremendously throughout the past twenty years,
the stock price has remained relatively low.

History and Culture

The current Sony corporation has a unique culture which is firmly rooted in her history especially in
relationship to her two founders, Masaru Ibuka and Akio Morita. Ibuka and Morita were both dedicated
electrical engineers and geniuses above their business talents. Both gave insights and visions in what the
company should make and how it should be made. Ibuka, especially, gave constant advice and suggestions
to the engineers involved in projects from the earlier on transistor radios to Walkmans. This created the
umbrella strategy in which Sony operates under where the top management, especially Ibuka, Morita and
now Norio Ohga gave the general direction in which the lower engineers actively learned, developed and
improved on the vision/idea. Therefore, although there is a planned direction, the actual product
development through launching is emergent with great flexibility.

Although the research and development section of Sony differs greatly from other companies with its great
flexibility, Sony, in its essence is still a traditional Japanese company in many ways. There is life-time
employment, with strong norms and values which in turn create strategies through their actions. Status is
given (the crystal award) instead of bonuses (not significant amount) for superior achievement. There is also
the strong seniority system such as the mentor and apprentice relationship that is typical of a Japanese firm.
All this can be classified as the cultural school in which strategy formation is of collective behaviour.
Collective vision and stress on human resource, which is typical of many Japanese, can be clearly seen in
the mission statement "Management Policies".

Weaknesses and Threats

Referring to Exhibit 1, sales has slowed down considerably since the beginning of the 80s. In the domestic
market, sales actually decreased by 7.22%. The overseas market expanded both in real terms and relative
to total sales, but slowed down to around 10% a year. This can be seen as the vacuum period between one
hit product, the Walkman, and its succession. As mentioned by Ibuka, business is conducted in a ten year
cycle. However, in the eighties, the product might still take a few years to develop, but the time reaping the
results and profits might be much less. As seen in the VTR example, both the VHS and Beta were
developed by Sony. However, in a short time, Matsushita could come up with a competitive product based
on Sony's technology. Therefore, it is fair to say that other electronic firms would be able to copy Sony's
technology in a much shorter time while offering more competitive prices. The margin for technology
advancement is therefore diminishing.

Associated with innovation is the capital expenditure cost and return on investment ratio. As seen from
Exhibit 1, capital expenditure has risen dramatically, especially in 1981, due to the automation of plants.
However, the return on investment has decreased. Spending around 10% of sales on capital investment is
by all company standards an extremely high figure. The question is that does this high rate of investment
represent corresponding growth in profitability? As mentioned above, the diminishing returns from product
innovation is apparent. However, the internal dimension also poses as much of a problem.

With its great freedom, research and development are divided into small teams which are free to pursue
their interest with little reference to "how it will fit into a market, what the product can do, how well it will
function or how it could be used by customers." Secret projects without management knowing about them
until "secret reports" are submitted are of common practice. With this kind of practice, there is lack of
communication between management and R&D and threat of duplication of resources among the small
groups. There is also a lack of general direction. This would be especially prominent when Ibuka and Morita,
the symbolic leaders and founders retire. This is because the two in many ways act as the main guidance
and bridge between management and the engineers. Therefore, there is also a succession problem.

Sony has always been a leader in technology, creating markets by looking for new markets where bigger,
well-established companies are not a threat. However, new products such as VTR, the Walk-in and the
Mavica involve both hardware and software. Sony can no longer just produce superb quality machines and
expect them to sell. The software would also have to be available. For the Walkman, cassette tapes were
well established but for the Beta system and Mavica, a standard has yet to be set. For example, the images
of Mavica would be held on a high density magnetic disk but Kodak, 3M and Sony all have different systems
and are not compatible. The Mavica system also stands alone with little compatibility with conventional
systems and little transitional interfaces.

This leads to the problem of cooperation where Sony is often the maverick, alone creating markets. With
Sony entering markets such as the VTR with no standards, it might be beneficial to both Sony and other
vendors if they cooperated instead of competing on conflicting software that supports the systems. This
could also be seen in Exhibit 2, the Porter competitive forces mode: new entrants from other Asian
countries, other Japanese industry competitors, substitutes and buyers are all strong and much stronger
than 20 years ago which reinforce the weakness of Sony acting alone.

Last but not least, Sony lacks strategy. Product development, manufacturing and marketing are all well
established but the firm lacks any formal long term direction. The original mission statement is also outdated
with its references to W.W.II. Short term strategy is also lacking and there is little emphasis on profit and
accountability of research and development of products. The result: a company with strong components but
unable to coordinate in a coherent way in order to achieve maximum potential.

Strengths and Opportunities

The greatest asset of Sony is of its human capital, especially its engineers which make up the R&D
department. Their constant innovation is crucial for a consumer electronic firm which specializes in audio-
visual equipment and the higher profit margin, which comes from being the leader of the pact. Subsidiaries
are also well established, such as in the United States and Europe which give Sony a distinct local hands-on
knowledge of the local market. It also makes Sony an international corporation, bringing together the talents
and best of strategies of both world to the organization. Besides the employees, the two founders, Ibuka and
Morita also legends in their fields which they create vision and sense of direction for the organization. The
also acts as bridges between the employees and the management.

The self promoting system and job rotating systems creates satisfaction for employees and give them
greater exposure to all aspects of the business. Ideally, this would produce better products as engineers
gain knowledge on consumer needs while marketing people engaged in the production and can give their
point of view.

The innovative style also stems from the "never copy others" culture, the generous funding of the R&D and
huge amounts in capital investments. As described by Ibuka,"It also stems from consumer driven in which
technology is targeted at consumers or business while American electronic industry are spoiled be military
and space applications."

Sony has been ahead in the race of Video Tape Recorders and digital imaging techniques in Mavica which
both offer tremendous potential of household penetration and sales. It also has the opportunity to set up
standards and dominate the field. Sony has also acquired enough technology to increase width by going into
the high technology business fields. With the rise of the Asian countries, Sony also has the opportunity to
make use of them for markets and for cheap labour.

Recommendations

Building of Strategy

With the succession of the two founders at hand, it would be very difficult for the company to find someone
as visionary, as respected and with the same engineering background to lead the umbrella strategy
company. With Sony as a much international company with major branches in Europe and the United States
and stocks listed in 23 stock exchanges, the Japanese cultural school strategy is not sufficient. Becoming a
mature company, the strategy should also change to more profit orientated. There should also be greater
emphasis on market share, especially in Japan where Sony's market is shrinking. Strategy should be aimed
at greater control and communication between manager and workers, especially the engineers in the R&D
Department. A more planned strategy should be adopted, which should outline the general direction of the
company.

Diversification

One direction which is possible is concentrating more on electronic know how in non-consumer business.
Currently, the buyer has much more choosing power and competition is fierce (Exhibit 2). The competitors
are also able to copy the product in a much shorter time. To create larger profit margins, Sony should
concentrate on the business sector and industries, supplying high technology equipment and parts. This
would make full use of the R&D Department, the strongest advantage of Sony without waiting for the price
cutting and technology adaptation to fit the average consumers needs. This would also make Sony less
dependent on coming up with a steady stream of relatively short-lived hit products, and able to use its
unique talents in video and semiconductor technology to create its version of the office of the future.

Although the Sony name is often related to expensive, high-profit end of the market, the organization should
also expand its product range by offering lower priced, simpler featured products that would compete head
on with other copycats. With the lower priced line, Sony can also increase its market shares in both
overseas and Japanese markets.

Alliance and Cooperation

Sony should try to become a leader instead of a maverick. The difference is great, the leader, besides a
great innovator, should also be a great coordinator. New products, which involve both hardware and
software such as the Mavica, should try to achieve industry wide standards. The standard may not be the
best or the one created by Sony, but Sony, by pioneering in the field first, would already have a significant
head start and the standards is just a way to ensure stability to allow Sony to concentrate on product
development and improvement. This is because Sony is not large and strong enough to acquire and provide
both software and hardware for one product. They also lack the know-how to the creative software market.
Consumers also prefer to have the ability to choose between competitive equipment.

Internally, the different R&D groups should cooperate more. The product line should also be made more
compatible with one another which is crucial through the communication between groups and managers, i.e.
no more secret projects. Products should be made with higher added value and longer life rather than
making frequent model changes. This is also a shift from a manufacturer-orientated mentality to a
consumer-orientated mentality, which is a way to save natural resources. The brand-line compatibility also
builds brand loyalty for consumers.

In relationship with the other Japanese consumer electronic firms, a more cooperative attitude should also
be taken. Just like when Japanese took over the US market through cheap yet quality consumer goods,
other Asian countries such as Taiwan and South Korea, with their lower labour cost, pose as great
competitors at the lower end of consumer goods. Therefore, the Japanese firms should cooperate in setting
up standards in high technology areas in order to reap maximum profits and extend the technological lead-
time over their fellow Asian countries.

Cost Cutting

Cost cutting is important because R&D plays an integral part in the success of Sony and cannot be cut
drastically although it gobbles up 10% of sales. Therefore, the only way to improve profit margins is to cut
cost.

Sony currently has factories in the United States and Japan. Although this is good for relationship of the firm
in a foreign firm and offers a chance to pay suppliers with local currencies, Sony is not fully making use of
other lower cost areas in the world, especially Asian countries such as Malaysia, Thailand and the
Philippines etc. By setting up factories in these countries, Sony can take advantage of their cheap labour
and also get a head start in their budding consumer markets.

As mentioned above, products should be refined instead of reinvented so that there would be less set up
cost and greater automation could be achieved.

Integration of production, design and marketing

In many ways, designing and developing of a product is separate from the production and marketing.
Although there is job rotation, the design stage is backed by intuition and experience rather than market
research and analysis. Often, the rational is that it is the marketing personnel's job to find a market for a
product after it has been developed instead of the other way round. To cure this phenomenon, R&D should
listen more to what the consumer needs and then innovate instead of always creating new markets. With
great freedom, the designing team should also take on greater responsibility in making the product fit to the
current production pattern and marketing aims. They should also be made more responsible to the profit and
lost of the particular product. Empowering these three separate groups create conflict, but it also brings
these separate efficient groups together achieving synergy.

Implementation

Internally, strategy should be reviewed beginning with renewing the corporate goals. It should integrate
together both the Japanese work ethic and its western counterparts. This is possible, because Sony is a
multinational corporation with employees and customers in many different countries. This involves writing
the importance of profits and its responsibility to shareholders in the statement. Integration of the company,
the designing, production and marketing should be encouraged, with increased communication between
each groupand the management acting as liaison and guidance. The management should be providing the
organization with specific goals and strategies for the short and long term. These changes are intended to
balance business Vs engineering.

Setting up alliances with fellow electronic manufacturers / competitor is crucial to mutual benefit so should
be pursued as soon as possible. In areas such as the VTR, Sony has to decide what standard the world is
adapting and make decisions to cut off setbacks. For new products such as the Mavica, new standards for
the industry should be actively sort after with commitment from other competitors and conventional
producers. This is also a change in culture for Sony so top management has to actively push and pursue for
this direction.

Cost cutting, with emphasis in making use of lower cost of labour in the Asian developing countries should
then be implemented. This could also be seen as a long term strategy. The work force could also be made
more flexible. Finally, diversification, with emphasis on making business supplies a major part of Sony's
business. This is one of the long term goals in which Sony should thrive to achieve. However, the end
product ratio between consumer and business products should be constantly reviewed throughout the
process to achieve the optimum mix.

Conclusion

Although other electronic firms are taking market share and profits from Sony by being copycats, the heart of
Sony's success, the innovative spirit and quest of excellence and perfection cannot be copied. Sony's main
task is to integrate its talent by placing common goals and priority for this increasing competitive market.
Sony also has the potential to innovate into a company with international operations as well as culture since
it was one of the first Japanese companies to set up a main branch in the United States. With strategy and
luck, Sony could become a great firm as it was and will be.