Case study:saving sony

Assignment Help Management Theories
Reference no: EM13489

Case study : Saving Sony

Sony is famous the world over for its Walkman music player, TVs, PlayStation game console, and other electronic gadgets. Unfortunately, success rarely lasts forever: From 2000 to 2003, Sony's hot-under-the collar shareholders watched the value of their shares drop from $150 to $25. It was enough to force some major changes at the company.

In 2005, Howard Stringer became the first non-Japanese head of the company in its history and one of the few to ever lead any major Japanese company. Stringer was born in Wales (UK) in 1942 but moved to the United States in 1965. He joined Sony in 1997 as the head of Sony America, turning around the performance in that unit by establishing higher levels of integration and cooperation across its electronics, game, and entertainment units.

However, after taking over as CEO of the global enterprise, Stringer determined that Sony's problems were both broad and deep. It was facing mounting financial losses and increasing pressure from relatively new products, such as Samsung's LCD and plasma televisions and Apple's category killer- iPod. To compete, Stringer decided Sony had to streamline its business into five groups focusing more on electronics, televisions, digital imaging, DVD recorders, and portable audio. That would entail closing 11 plants and laying off 10,000 employees.

The cost of the restructuring?An estimated $1.8 billion. Because of the changes, Sony reported that it expected to incur a financial loss of about $90 million on sales of about $65.1 billion in 2005. Previously it had been expected to post a profit of $90million. Some people inside and outside Sony were sceptical of the change because past efforts to transform the company had failed. "We have made promises before, but we failed to execute them" Stringer said.

Stringer was determined to make change a success. A key part of the initiative involved giving Sony's Electronics division central decision making authority over key areas. Previously each unit had its own planning, human resources, finance, and sales functions and operated with considerable autonomy. Stringer believed the new structure would streamline and speed up decision making across Sony's product lines. It would also permit uniform software development across the lines so Sony's products would operate seamlessly with one another. This would, of course, also eliminate design and product redundancies and optimize the firm's Research and Development spending.

Stringer also hoped the change in structure would help change Sony's corporate culture. Sony had a tradition of engineering the best products. This approach had worked wonders for years. However, the development of Apple's iPod highlighted the fact that consumers were not just interested in technical superiority but the easy use of products. And some of Sony's products had become too complicated for customers to operate.

The change plan also affected specific technologies. For example, Sony executives declared that television was of the utmost importance to the company. The firm would scrap the production of cathode ray tube (CRT) television sets and focus on LCD and rear-projection TVs and technology. Furthermore, Sony would focus on self-luminous flat -panel organic light-emitting diode (OLED) displays, on high-definition technology, Blu-ray, and mobile technologies.

"Our target is for the Sony Group to achieve consolidated sales of over 8 trillion yen and operating profit margin of 5 percent (Electronics 4%) by the end of fiscal year 2007" said Mr. Stringer.

Answer the following questions:

  1. You have been appointed by Sony as a consultant on change management. Advise Sony on how they could implement the change by using the various theories of change you have learnt.
  2.  Examine the likely sources of resistance that could occur in Sony and how you would deal with it as a manager.

Reference no: EM13489

Questions Cloud

Investigate the concept and process of marketing : Investigate the concept and process of marketing. Be able to use the concepts of segmentation, targeting and positioning.
Draw a relay construction diagram : Draw a relay construction diagram and briefly explain the operation of a relay.
Foreign direct investment in the automobile industry : Prepare rearch on "Impact of political economy on inward foreign direct investment in the automobile industry".
Determine the price of computers in a free market : Examine the factors that determine the price of computers in a free market.
Case study:saving sony : You have been appointed by Sony as a consultant on change management. Advise Sony on how they could implement the change by using the various theories of change you have learnt.
Genital and reproductive function : This assignment describe the Genital and Reproductive Function.
Research proposal:cargills ceylon plc : Why Cargills internal information attacked increased and how to minimize it by countermeasure ?
Design of absorption column and the cooler : Design of absorption column and the cooler. Process design of other units should be completed along with pipe sizes.
Illustrations of concepts from organizational structure : Illustrations of concepts from organizational structure, organizational power and politics and organizational culture

Reviews

Write a Review

Management Theories Questions & Answers

  Learning in action

Learning contract proposal that will form the basis of your learning contract report.

  Change is the only constant

"Change is the only constant " Evaluate the different types of change that have occurred in Sony.

  How do advertisers try to use group influence

How do advertisers try to use group influence?  Will you find any specific examples and explain the relevant theory of group behavior and influence?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd