Corporate level strategy is the decisions made at the corporate level that can affect the operations of the entire company. Typically, decisions related to the selection of new businesses, mergers, business environment and competition are corporate level strategies. These strategies will have a reach across the entire company. The aim is to improve the overall profitability of the company and tap any possible future niche besides tackling competition. Creating a competitive advantage is also a part of corporate level strategy.
Its working and implementation has been explained by Watson and Wooldridge (2005; p.1) as, Corporate level strategy "allows the Chief Executive Officer (CEO) and the "corporate office" to set corporate strategy, while delegating more detailed matters to the managers of business-specific subunits. It might thus appear that, although these business unit managers may be formulators of business strategy, they are implementers of corporate strategy."
Sony implemented a major corporate level strategy and that is to introduce blu-ray format in the popular PlayStation 3. This gave a big boost to the sales of blu-ray and it helped the company to win the blu-ray format war. Similarly, Sony should use corporate level strategy to win the 3D TV war as well. It can formulate a strategy after taking into account the competition levels and the impact of the new technology in the market. It can try to introduce 3D in its PlayStation games as well to create awareness about 3D TV technology.
Optimal Organizational Culture and Structure
Organizational structure can make a big difference between the success and failure of any company and Sony is no exception to this rule. The existing structure and its merits has been explained by Kobayashi (1970, p.1) as, "any existing power structure was destroyed by removing titles that connoted superiority. In fact it became possible, and the practice initiated, for department managers and section managers to exchange duties without a change of prestige. Next, participation in decision-making was implemented and rules were abolished. Job duties, especially managerial, were re-defined constantly by the position holders themselves. Renesis Likert's team concept was established and communication lines for reliable information were kept open. Above all else, methods and procedures were voluntary. The net result is a living organization supported by the responsible judgment and actions of its members." This existing structure helped Sony to have considerable growth and prosperity within a short period of time.
This departmentalization worked well during the last several decades for Sony. However, the changing environment necessitates a change in the organizational structure as well. There has to be more interactions between the different departments. This can be achieved by making the departments more flexible rather than rigid independent units. The mindset must be moved from an independent unit to a set of inter-dependent units that work together to achieve a common goal.
The current structure is mechanistic and it must be moved towards a more organic structure. "In contingency theory, the term organic structure is used to describe an organizational structure that is designed to promote flexibility so that employees can initiate change and adapt quickly to changing conditions" (George & Jones, 2005, p. 508). On the other hand, mechanistic structure is the exact opposite. "In contingency theory, the term mechanistic structure is used to describe an organizational structure that is designed to induce employees to behave in predictable, accountable ways" (George & Jones, 2005, p. 508). The company should move to a more open, dynamic and organic environment to tackle competition and to be successful in the ever-changing business environment.
In short, there are many factors that have contributed to the success of Sony in the blu-ray format war. Though the 3D TV format war is slightly different because of the attitude and preparedness of the manufacturers and distributors, Sony must take all possible steps to become a market leader in this segment. This can come with an external as well as internal change. The external change must be the change in technology as well as good corporate level strategy to popularize 3D TV. Internally, the company and its organizational structure must undergo a transformation. These changes will help Sony to be successful in this market segment.
Kobayashi (November, 1970). The Creative Organization -- a Japanese Experiment. Personnel p:8.
MarketWatch. (January 2009). Company Spotlight: Sony Corporation. MarketWatch:Technology 8(1). p 36-44.
no author. (4th April 2010). 3D Tv Formats explained. Retrieved from: http://www.practical-home-theater-guide.com/3d-tv-formats.html
Williams, Ian. (March 22nd 2010). Maybe there won't be a 3D Format War. Retrieved from: http://www.theinquirer.net/inquirer/feature/1597331/maybe-won-3d-format-war Sherer, Peter.D; Lee, Kyungmook. (February 2002). Institutional Change in Large law Firms: A Resource Dependency and Institutional Perspective. Journal of Management. 45(1). pp 102-119.