An Assessment of Sony Corporation’s Organizational Culture and Structure
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 , Tokyo and gave birth to (), otherwise known as. 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, 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 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 (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 (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. 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. 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. , 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. … (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 (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 (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.,
“…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” (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. , 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 , who became president in April 1995, created two slogans — “Regeneration” and “Digital Dream Kids” (2000). Says President,
“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 (2000). The following figure is obtained from Sony Corporation’s Website.
Figure 1. The Organizational Chart of Sony Corporation as of 1 April 2006
In terms of hiring its employees, according to Mr. , Sony wants to have good individuals of heterogeneity (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, . An employee is said to acquire a “certain magical feeling”. According to Mr. to work for Sony means “a feeling of pride and security” to the local populace (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” (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 , 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 (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 (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. 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 (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. I 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.
Bibliography:
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