Part 1
Sony Ericsson, its resources and its competencies
Multinational strategies had always featured in the telecom industry. Ericsson, based in the small Swedish market, established manufacturing operations in Russia and sales subsidiaries in China and Mexico as early as the 1890s. Around one-third of Ericsson’s total production was manufactured in eleven factories outside Sweden in the 1930s. By 1990 it only operated telephones in Argentina. By that year Ericsson was the fourth largest telecom manufacturer, holding around 7 percent of the world market, and having 70 000 employees ( 2005). In the 1980s the industry underwent a major change with the development of cellular or mobile telephony. The mobile phone industry had two components: mobile communication infrastructure and mobile handsets. The early mobile networks were for the most part incompatible between countries. In the United States, several competing systems and standards evolved in different parts of the nation. Subsequently second generation systems, which used digital rather than analog technology, were introduced. A pan-European system known as global system for mobile (GSM) communication was launched in 1990, and accounted for seven-tenths of the world’s subscribers by the new century. The remainder used two competing US standards or the Japanese standard ( 2005).
The market for telecom equipment came to be dominated by a small number of large multinationals. In 2000 Ericsson’s sales of over billion included nearly one-third of the world mobile infrastructure equipment market and 10 percent of the world cellular phone market; however competitive pressures led it to divest rather than further expand international manufacturing. During the 1990s it reduced the number of its production plants from seventy to less than ten worldwide. The residual plants either focused on the development and design of new products, or on standardized products. The latter were concentrated in a few low-cost sites ( 2005). A decision to concentrate on mobile telecom infrastructure led to the sale of many of its plants at the turn of the century and the outsourcing of its non-core manufacturing to contract electronic manufacturers. In 2000 Ericsson and Sony established a London-based joint venture, Sony Ericsson, to exploit the opportunities of third generation mobile systems, whose implementation had begun in Japan. Ericsson’s strategies were broadly emulated by its major competitors in the world telecom industry, including Nokia, the Canadian firm Nortel, the US firms Lucent, Cisco Systems, and Motorola, and Germany’s Siemens, all of whom had telecom equipment sales in excess of billion in 2000. These firms all moved, although at varying rates, to outsource production to contract manufacturers. They also progressively outsourced innovation to cheaper locations (2005). Sony Ericsson’s resources come from reliable suppliers and manufacturers. The materials used in creating the products have to agree with the company’s greenheart process wherein most part of the product should be recyclable or harmless to the environment. Sony Ericsson’s competences include its highly advanced product, competitive products and concept of sustainability. Sony Ericsson makes use of its competences to achieve continuous growth and development.
Governance Chain
Diversity and social inclusion are core themes which guide governance applications at the social, organization, institutional, political and economic levels. In turn, governance considerations focus on concerns of how institutions and people understand the processes of inclusion/exclusion and diversity at these various societal levels, including that of the family. In particular, governance is concerned with how employment and inclusion are enabled by sound economic and financial policies that generate the funds driving the economy, provided such policies are grounded in an inclusive and sustainable framework policy formulation ( 2001). At the organizational level, corporate governance traditionally has addressed issues concerned with the exercise of choice and the creation of opportunities, and how choices and opportunities have an impact on institutions, decision-making and accountability. Corporate governance has focused on corporate entities, created under the law, and often locked together by ownership within groups. Corporate governance is concerned with holding to account the modern corporation, whether it is a large or small holding company and subsidiaries, listed, private, government or non-profit entity. One influential interpretation of corporate governance is to find a way to maximize wealth creation in a manner that does not impose inappropriate costs on third parities or on society as a whole. Corporate governance application requires a system of checks and balances designed to define appropriately the parameters of authority through accountability ( 2001). The following presents the governance chain for the company.
The key players include the stakeholders, board of directors and the employees. The stakeholders, board of directors and employees are the ones that will be affected by any change in management strategy. Any changes in management strategy can affect the service given to the stakeholders. Any changes in the management strategy can alter the position and responsibility of the management team and the personnel. The beneficiaries of any change in the management strategy include the clients and the government. The clients are beneficiaries because any change in the management strategy can lead to better service to them and it can lead to the emergence of better products. The government is a beneficiary of the change in the management strategy because they can now make business dealings with Sony Ericsson. The government can ask the company to make products that fits with their communication needs. This in turn can help the government provide better service to their constituents and deal better with outside forces.
Sony Ericsson ethics and Social Responsibility
The process of globalization over the past decade has created unprecedented opportunities for global companies in trade, investment, services, and production. The fact that the rapid pace of growth of economic opportunity has not corresponded with the growth of leadership in business ethics and a sense of corporate responsibility has potentially threatening consequences for the reputation of free market economies and businesses. Public concern is accelerated by a wider use of electronic communications that is changing the nature of politics as much as that of business operations ( 2003). The leadership of a few progressive companies, the rise in consciousness of corporate responsibility as an essential feature to sustain global capitalism, and emerging evidence of partnership initiatives which hold the key to equitable development, are all encouraging pointers towards progress. Corporate responsibility is a pact for the mutual benefit between society that needs business for economic and social development, and business that needs a supportive business environment. It is also a pact between capital and management in modern companies, which has been as shaken up by some recent scandals where management disregarded the bond of transparency with shareholders ( 2003).
All too often professional managers and their advisers have been tempted to see the resources of public companies as their own property without the sense of stewardship that owner-managers once had. The balance can only be struck by combining professionalism with transparency. The international nature of the operations of business in trade, investment, and production brings a more complex dimension to business ethics and corporate responsibility in both the cultural aspect of doing business in environments with different norms and values, and in diversity of employees and stakeholders. While, until recently, some companies would argue that they should respect local values even if these are more tolerant of low standards and corruption, the prevailing ethos of the leading multinational enterprises and international institutions is that standards should be universal (1996). This is not without dilemmas in operating in different cultures, not least where preference is given to relationships along family, tribal, ethnic, and community lines. One of the fundamental problems of addressing ethics and corporate responsibility in an international setting is the existence of many governments that lack the capacity for proper market regulation, let alone the many states which are weak, corrupt, and in a few cases failed states engaged in internal conflict and civil war. Companies engaged in such locations have a compelling reason to engage in collective efforts to promote an enabling environment for corporate citizenship (1996). Sony Ericsson has and believes in corporate responsibility. The company makes sure that it follows all laws and regulations in every country they operate in. It has procedures and processes that make sure that corporate responsibility is implemented not only in internal environment but within its suppliers and trading partners. Sony Ericsson gives much importance to their personnel; the company makes sure that the welfare of the personnel is given appropriate attention.
The management strategy that will be changed
Expanding into additional segments, after reaching an acceptable market share position in the primary market is a prudent option. The common strategy is to penetrate with either line extensions or technology applications. It is an acceptable and logical move for a market leader particularly in a flat market. It’s only advisable though if sufficient resources are available to penetrate the new segment and, providing sufficient management attention and resources are available to vigorously protect the primary segment ( 2006). The target market of the company involves almost all sectors of the society. The company aims to provide mobile products to young or old, boy or girl. The company as much as possible aims to reach all walks of life. This target market is a good source of income. The company has different strategies that can cater to the taste and appeal of such markets. The change in management strategy will focus on increasing the market of the company. In increasing the market the company will need to make sure that the stores where its products are located will be in the most profitable places. The distribution stores for the products should be in places where clients can easily see the store and they can be encouraged to visit the store and buy products. The distribution store should make sure that competition in the location they want to put up the branch will not be too heavy. The market of the company can still be expanded to accommodate the elder people market. The company can consider such clients as a different segment that should receive a different kind of product. They should also provide a different kind of mobile products for such market.
Part 2
The mission statement and how it contributes to the firm
High-level leaders in innovative companies take the long-range view, looking down the road and striving to anticipate every contingency. They develop a mission and vision that are consistent, challenging, but realistic ( 1997).They also develop strategic plans to achieve the mission and cultural plans to achieve the vision. Innovative leaders attract the voluntary commitment of followers to the company’s mission and vision through example and assertive, convincing persuasion. Innovative high-level leaders take charge, make things happen, dream dreams, and then translate them into reality. They make decisions that serve long-term strategic and cultural purposes rather than making short-term politically expedient decisions. The innovative company and the role of the leader in it are dramatically different. Innovative leaders’ success will hinge largely on their ability first to plan and then to empower other people to implement the plans. An innovative organization must be led by a leader who develops and aligns the organization with the mission and vision, develops and maintains trust, ensures that coordinating and communicating occur, and encourages creativity and learning (1997).
High-level managers have an important role in formulating and implementing an innovative culture for their company. First, they set direction and get people in the organization aligned. Drawing on their own insights and the ideas from others, they develop a sense of what is possible, articulate their vision, and work with people to align them with it. Furthermore, they select, train, and develop people capable of realizing that vision. Through these people, they create, shape, and influence how work is done in order to ensure that it gets done in the best way possible. In essence, they are endeavoring to create their version of the company’s culture. At the heart of the innovative culture lies the vision of the leader. This vision includes the broader sense of who the company is, why the company is doing this work, why it’s important, the promises they have made to customers, and the code of conduct (2000).Developing the vision, though, is not enough. The leader must be able to inspire others with the vision so that others want to say yes to it. In articulating the broader sense of vision, the new leader must be able to touch the hearts of the employees. The first person the new leader must convert to his or her vision is himself. If he is not sold on the company’s vision, it will be next to impossible for him to effectively convert his employees. As innovative companies move into the twenty- first century they will be operating with a culture of greater employee autonomy and self-direction. Teams will be less controlled by management and will exercise more autonomy in completing tasks from start to finish. It will be the leader’s job to ensure that the team’s efforts are bound together by a shared commitment to the mission and vision ( 2000).
A necessary input to developing the vision, core values, and guiding principles of the organization is the mission statement from the strategic planning effort. If a corporate mission statement is not available, the company should take steps to have one developed before proceeding. The mission and vision should definitely be consistent and supportive, but they will not be exactly alike since they serve two different purposes ( 2002). Normally the mission should be developed first, with the vision of what the organization should be like to achieve the mission being developed second. Because the mission is directly linked to the customers and external environment, it makes sense for the vision to be based on the mission. It is extremely important that the organization’s mission and vision be consistent and mutually supportive. One of the better methods of testing the vision, core values, and guiding principles is through employee focus groups. The focus group approach involves leading a group of employees, from various divisions and levels in the company, through an open, in-depth discussion of the proposed vision, core values, and guiding principles. Members of each group session would be chosen from a list of volunteers, so that each group represents a valid cross section of the company’s employees. A session is usually conducted as a casual roundtable discussion with eight to twelve participants. The setting should be relaxed and casual to encourage a free and uninhibited flow of ideas ( 2002). Sony Ericsson’s mission statement concentrate on making sure that the company will produce the most attractive products. This mission statement fits well with what the company is doing and showing to the public. This mission statement can still be used to achieve the company’s overall goals. Sony Ericsson has partly achieved its mission because it has created a wide array of eye catching products that are globally competitive and full of innovation.
Objective setting
Ambitions and objectives are formulated at three levels. For the long term, guiding objectives are important. For the short and medium term, a system of measurable objectives must be created. Finally, the actual missions are the concrete translation of those objectives to the social players involved. All companies that wants to have research on a new product or a new idea have applied strategic management procedures for the identification of new market opportunities related to the changing conditions of sustainability. Some companies started specific programs for the promotion of innovation through product stewardship. Others are adding issues of sustainability to existing regular strategic routines and audits for the identification of business opportunities (2004). Some enterprises are designing new search efforts in and beyond the company to identify options for technological renewal and innovation in view of arising demands of sustainability. And most companies are right in the middle of a search process to find strategic management routines to adjust these changing external conditions. The procedures adopted appear to relate to regular approaches of strategic management. The enterprises also expressed difficulty in determining appropriate and clear short- and intermediate-term goals for sustainable strategies (2004).
This was especially the case in determining business objectives and strategies for the introduction of new technology (2004). Establishing focus is the competency through which managers ensure that their subordinates are aligned with the business’s objectives and that resources are appropriately prioritized and allocated. Communication is a key element of establishing focus, because employees usually perform better and accomplish more when they understand their role and how it relates to the bigger picture ( 2000). Of course, to help others get and stay focused on the most important business objectives, managers need to stay focused themselves. It is a common complaint of many employees that their manager is not well focused and does not help them focus, either. Establishing focus is critical to ensuring that employees are all pulling in the same direction and making the best use of their time. It is the leaders’ job to align the organization around common goals and objectives. They are tireless in their efforts to reinforce how the duties and responsibilities of each individual, unit, and department relate to the organizations overall goals and objectives. Leaders also deal with nonalignment where it exists by allocating resources and establishing priorities to ensure that organizational activity supports business objectives. People know where the organization is going, they know their role in helping the organization get there, and they are provided the resources they need to play their part (2000). In setting the objective a clear picture of the internal and external environment was used by the firm. The environment showed the firm its weak points or problem areas. Through knowing its weak points the company was able to plan for future possibilities and future plan of actions. After the company knew its weak points it was able to create the objectives by determining the weak points or problem areas that should be given top concern and priority.
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