Organizational Culture of Sony

Cultural Analysis of Sony

Defining Organizational Culture:

Organizational culture can be defined in several ways. The definitions that apply to this essay are discussed below. Morgan (1986) defined organizational culture as the development patterns as mirrored by the society's ideology, laws, knowledge system, daily rituals and laws. Schein (1985) says that organizational culture has relations with observed norms, behavioral regularities, policies, philosophies or values, the acceptable behavior and the sense of belonging that an individual has by being part of an organization (p.6,9). An organization's culture is essentially a product of the organization's members. The members are driven to achieve the goals of the organization which in turn has an effect on the organization's life. The data used in this essay has been sourced from secondary electronic and print sources.

The Nature of Sony's Business

Sony is a leading brand in a wide range of electronic products like home entertainment video systems and audio, gadgets for communication, professional electronic and broadcasting devices, PCs, robots and digital cameras. The Japanese corporation has undergone an evolution to become a giant in the electronics business with global operations. This essay explores the organizational culture at Sony and how this culture impedes or promotes Sony's effectiveness. The operations of the company are:

Sony Corporation (Sony Electronics located in the United States),

Sony Computer Entertainment,

Sony Pictures Entertainment,

Sony Music Entertainment,

Sony Financial and •

Sony Ericsson

Sony also manufactures semi-conductors and ranks well in the Worldwide Top 20 Semiconductor Sales Leaders.

The company was founded on May 7th, 1946. The present representative corporate executives at the company are Howard Stringer (Chairman, CEO and President), Ryoji Chubachi (Vice Chairman) and Noboyuki Oneda (Executive Deputy President and CFO) This information is provided by Sony Global (2009).

The Sony Corporation, popularly known as just Sony is a conglomerate with multinational operations with headquarters in Minato, Tokyo, Japan. It is among the world's biggest media conglomerates and records revenues in excess of 7.730 trillion Yen, or $78.88 billion U.S. (FY 2008). Sony's name is derived from a word in Latin that means sound, sonus.

An Introduction to Sony's Culture

Mr. Ibuka envisioned an organization with a very stable environment for work that would encourage visionary engineers possessing great appreciation for the world of technology and technology itself could work to meet their goals and visions and work whole heartedly. To inspire these workers, Mr. Ibuka encouraged them to embrace a spirit of cooperativeness and ensure that they unleashed their technological potential without reserving anything (Sony History). These were the aspirations he had and that he desired to witness in Sony and what set out to create.

Sony's Vision

The culture in this organization lays an emphasis on a spirit of open-mindedness and freedom as well as a burning need for innovation. The founder crafted such a great vision in the initial Prospectus and so this philosophy has stuck throughout the life of the organization and is exemplified by the employees and witnessed throughout the history of Sony.

Sony's Spirit

Since the inception of the corporation in 1946, it has always produced products so innovative that they will inspire fresh lifestyles. Morita and Ibuka, the founders, inculcated a challenging spirit for the production of products not yet produced and a will to afford excitement and happiness to the population that used the products. This philosophy is in the corporation's DNA and is still going strong even after sixty years.

Life at Sony

Sony's aim is to create a working environment that brings inspiration to its workers and makes them chase fresh challenges so that they expand their potential and realize growth by realizing their innovative and creative potential. The company has always striven to encourage personal development by way of on-the-job education and learning and through the employee's ability to access a number of programs designed to meet varied needs and wants, including the education of the next-generation of leaders in business, skills of management, skill training and also training geared towards improving an employee's skills and abilities.

Sony's Incorporation Objectives

the establishment of an ideal factory that lays emphasis on the spirit of open-mindedness and freedom, and somewhere where sincerely motivated engineers can max their skills and technological abilities;

reconstruction of Japan and the elevation of the culture of the nation through fluid manufacturing and technology;

the prompt application of very advanced technologies that were come up with in different sectors at the time of war targeting common families and households;

rapid commercialization of superior technological findings made in universities and other institutions of research that can be applied in common household;

the availing of radio communication as well as devices of a similar nature to common households and the promotion of home appliances usage;

active participation in reconstructing networks of communication that were damaged during the war;

the provision of high-quality radios and the provision of radio services that are useful in the era that is coming;

the promotion of science education in the general public sphere (Sony History).

Noting the fundamental ideologies informing these objectives of the Sony Corporation is quite interesting. The weight given to the Japan culture in the formulation of these objectives is quite evident even when we ignore the truth that the corporation was born after the destruction caused by the Second World ar. Mr. Ibuka's apparent vision was that Sony will serve as the contribution he has made to Japan's development, and also that technology was going to be important in the growth of the nation. This is in harmony with the advancement of the nation that the government was looking to achieve at the time.

To what extent are the initial objectives of incorporation reliable? Mr. Yoshihide Nakamura, Sony's Core Technology and Network Company deputy president, said in an interview that the culture at Sony is a mix of not so very Japanese thinking and Japanese thinking. He says that in a way, they are quite free. They are not pushed to do anything provided they are performing well. The freedom at Sony is tremendous. The innovative are afforded fresh opportunities. Some individuals who might be unsuitable elsewhere can thrive at Sony. These people will be afforded opportunities to attempt to meet their goals (Richard Gershon and Tsutomu Kanayama, 2002).

The Company Strategy

Howard Stringer on joining Sony Global Japan as the new CEO came up with fresh strategies and made use of them in streamlining Sony to be in harmony with the strategies.

First, he checked the core business and competencies of the organization and channeled his energies on the games, entertainment and electronics products. Established in the organization was a strategy for growth that said that the goal of the company was to realize consolidated sales revenue of at least eight trillion Yen as well as an operating profit margin of five percent ( 4% in electronics) at the close of the 2007 fiscal year. The strategy covering the years 2005 through to 2008 of the company was published by NewBlaze.

The strategy to revitalize the company over the three-year window was as given briefly below:

Restructuring of the electronics organization

Eliminating corporate silos and focusing more on competitive expansion and growth

Taking of steps to improve the organizations profit structure

Reducing costs

Selling of none-core assets like stock and real estate

Strengthening of the prevailing electronics business of the company

Focus more on the electronics field and ump profitability in the television arm by 2nd half of the year 2006

Launching in the market in 2006 a variety of HD products

Having a focus on interoperable and intelligent products

The development of network-enabled applications and products

Solidifying development of technology

Creating mobile and home platforms

Concentration of investment on important component devices and semiconductors.

Next- Generation Display (OLED)

The enhancement of the development of software

Group convergence strategy

Pursuing mobile entertainment

Establishing of a center for mobile development

Impact of Strategy on Organizational Structure:

On taking over Sony as the new CEO, Howard Stringer formulated strategies for every product the company made. These strategies are listed above in the essay.

Looking at the strategies, it is apparent that he had divided the organization along product lines and every product had its own strategy. The organization structure of Sony followed the same division. This means that the organization is flatter and every division now reports to the head office.

As always in organizations divided in several divisions, the divisions proceed to gain flexibility meaning that they can also do mergers, add divisions or close other divisions. This is true for Sony as its mobile division did a merger with Ericsson to take over the production of Sony Ericsson mobile devices.

It is public knowledge that the music entertainment division at Sony did a 50-50 joint venture with a music group, Bertelsman Music Group, thus changing the name of the division to Sony BMG Music Entertainment. Also, in 2008 August, Sony acquired 50% stake and Sony then renamed the division calling it Sony Music Entertainment.

It is clear that given the multidivisional structure at Sony, each and every division is capable of working on its own and is thus is able to do joint ventures as was the case in Sony Ericsson. This means that they are also capable of making decisions of whether to acquire a different company like BMG.

Howard Stringer also, on joining Sony, shut down restaurant chains as well as other non-core operations that Sony controlled.

Given the multidivisional nature of the company now, Howard was left to oversee the divisions by evaluating, from afar, each division's performance.

Looking at the merits of such a structure, it is possible to decipher that dividing organizations along product lines gives them the opportunity to specialize and advance on their main competencies.

It is clear that every division has become a company of its own, for example, the Sony Pictures Entertainment Inc., Sony Electronics Inc. As well as Sony Computer Entertainment Inc. The redundancy tests carried out in various reports reveal that each and every division posses its own head office. This explains the several numbers of parent levels at Sony and the many crucial departments like IT and HR face redundancy but due to the structure of the organization, these offices need to be put up. Despite the limited knowledge sharing in the organization, this problem is being overcome by the CEO setting up 5 strategic committees covering all the units of the business that are technology, product, production, sales and procurement. Standardization has therefore helped in the reduction of effort and reduction of poor coordination.

Also, the CEO travels around the world visiting the operations of Sony and he covers almost 30,000 air miles every month (Nakamoto 2006). This builds the spirit of employees and the excitement can be spotted in the employees' eyes the world over.

Sony's Management Policies

Sony has its own management policies. Its first policy is that they shall do away with any profit-seeking practices deemed to be unfair and constantly lay emphasis on activities that add substance and push forward the agenda of expansion only for size's sake. Secondly, they seek to maintain the operations of the business small, improve their technology and grow sales in areas large corporations struggle to access given their size. Thirdly, they state that they will always be selective and be welcoming to challenges in technology. Their focus will be on very sophisticated products of technology that are useful to the people of the society, without regarding the involved quantity. Further, they seek to avoid formal separations between mechanics and electronics and shall make products that unite mechanics and electronics in a determined manner. Fourthly, the corporation shall utilize fully the characteristics of the firm that are known well and depended upon by friends in both the technological and business worlds. They also stress the fact that production development, acquisition of supplies and sales channels will be achieved through cooperation. Fifth, Sony will foster and guide factories in sub-contracting through avenues that will ensure their independence and they shall also work towards strengthening mutual cooperation with these companies. Sixth, Sony will keenly choose employees and the corporation shall have a few employees. The company shall try not to have formal positions for just the sake of it and shall emphasize ability, character and performance for every person to fully utilize his skills and abilities. Lastly, the organization's surplus earnings will be distributed to all workers appropriately and assistance will be made practically to ensure their life is stable. The employees are expected to therefore give their all in their work (Sony History).

A number of features can be spotted in the management policies of Sony Corporation. One can easily notice the insistence on 'we' that implies commitment of the organization on promoting team work. This custom is very Japanese, or Eastern or Asian. While the West operates individualistically, the Eastern philosophies encourage team work. It has been discovered that at the start of the corporation, the first people were quite hardworking and it is reported that they could work past normal working hours, sometimes until midnight. It is normal for Japanese managers to work long hours, up to 12 to 14 hours. This is also encouraged for other working staff (Sony, 2003).

Secondly, minimalism is common among the Japanese as shown by their material culture. Thirdly, they emphasize on innovation. This is a key idea among the Japanese. Goto and Odagiri (1997) say that technology is viewed as the driver of the victory of manufacturing firms in Japan as well as the economy of the nation. Right now, the motivation to research innovation in Japan is the appreciation of the role innovation played in the nation's modernization and growth (P.1). Sony views the key to success to be the possession of an innovative attitude. Mr. Nakamira says that winners always win while losers always lose and so it is apparent in several industries as well as among individuals that make lots of money and pretty much every individual that has maintained their position and is not concerned about being displaced or being declared bankrupt (Beamish 2000).

History of Sony's Organizational Structure:

Four words describe the expectations of the Sony Group. Unique, in the sense that uniqueness guarantees the corporation's constant innovation. Quality, this gives the best description of the products the company produces. Speed, refers to how fast the corporation is able to adapt to its changing environment. Cost, explains the importance of pricing its products competitively (Sony History. The four are the key components of the organizational culture at Sony. The company continues to meet current and changing demands and this has ensured that it remains relevant in the international market.

Sony Corporation reorganized the organization's structure in 1999. What prompted this? Nakamura says that it was a necessity since the world of the digital network had just dawned and the reorganization was necessary so that the company stays competitive in the 21st century. Sony is a giant company now but the company strives to maintain the feel of a small company. To achieve this, Noboyuki Idei, the company's president in 1995, came up with two clarions -- 'Digital Dream Kids' and 'Regeneration' (Beamish 2000). President Nobuyoki says that this gives them the opportunity to collaborate and promote team work -- not working individually but as teams. 'Regeneration' was established as a new theme of management to make sure that the company remains excellent over the coming 50 years. The concept conserves the initial spirit the founders had. Through 'regeneration', the current workers can renew themselves and aim at much higher heights. Indeed being present in the digital age can be exciting to persons of any age. Both the young and the old marvel at technology. The 'digital dream kids' are the company's customers of the future. Sony therefore strives to exemplify 'the digital dream kid' at all levels of its organization so that the needs of its customers are always met.

There was deconstruction of the organization to create four divisions. They are the Home Networking0020Company, Core Technology and Network Company, Personal and Information Technology Network Company and Sony Computer Entertainment (Beamish 2000). This information is available on the Sony Corporation's website.

Hiring Policies

As concerns the hiring of employees, Mr. Nakaruma says that the organization strives to get excellent individuals into the corporation (Beamish 2000). Hiring as per Sony's management policy means carefully selecting individuals. Actually, Sony hires both engineers from various fields of technology as well as those with a keen appreciation of technology products. It is notable that the current CEO, Howard Stinger, hails from the United States. Sony's employees are said to feel good about the company. Working for Sony, says Mr. Nakamura, offers the local population a feeling of security and pride (Beamish 2000).

Procurement

Procurement at Sony is based on two key principles. Principle number one is about customers or its global customers up to the current moment. They strive to exceed customer expectations by delivering high value and quality to their customers. Also, the customers have expectations that Sony be an excellent corporate citizen through its operations. Principle number two is concerned with the suppliers of the company. Given that the company sources the raw materials used to produce their cutting edge products from various suppliers the world over, the company's procurement relationships have to be smooth and should be grounded on 'cooperation and trust'. The company places a premium on keeping its suppliers happy and maintaining good partnerships with them. It is in this way that the corporation sees that it will be able to deliver products and services well (Sony History).

Sony Corporation maintains fruitful and amicable relationships with the suppliers. This is in harmony with the 'keiretsu' concept. In other words, the company collaborates effectively with other firms in different niches and industry through stock-holding between corporations and the transfer of personnel (Lebra 1992, p. 139 -140). This results in an influential business bloc. Sony does perceive the entire spectrum of major figures, from its workers to consumers to its suppliers, in all their actions and decisions they make. Keiji Nakazawa, an executive at Sony, opines that Japanese corporations always make decisions fast, but before any decision is arrived at, all factors have to be considered so that a detailed and efficient business plan is produced first (Kagayama 2005).

Impact of Organizational Culture on Sony's Strategy and Structure

Organizational culture can sometimes influence organization strategy when not taken seriously. Sony's culture has a role in the financial problems it is currently facing. Power blocks in Sony made communication flow difficult and also the cooperation between managers, production, marketing and designers reduced.

Gerry Johnson and Kevan Scholes developed the Cultural Web in 1992 to help in the study of organizational culture and to help change it. Using this structure, practices and assumptions can be posed and work on the alignment of the elements of the organization can begin using the strategies developed (Richard and Tsutomu Kanayama, 2002).

The Cultural Web as developed by Kevan Scholes and Gerry Johnson in 1992 gives a similar approach for studying and altering the culture of your organization. Cultural practices and assumptions can be exposed by making use of it. After exposing the two, you should start working, making effort to align elements of the organization with each other also with the strategy you have (Richard Gershon and Tsutomu Kanayama, 2002).

How Sony's Paradigm Hurt its Businesses

The cultural web points to six connected elements that assist in forming 'paradigm' as conceived by Johnson and Scholes. The 'paradigm' is the work environment model or pattern. An analysis of each of the factors will help you see your organizational culture big picture: what is optimally working, what is failing, as well as what needs changing. The following are the 6 elements:

Power structures: There was a culture at Sony that ensured that executives that had served for long wielded so much power and influence in the organization. The annual general meeting saw these executives sit at the front chairs as the people lower in ranks sat way back in the room.

A number of the senior workers even failed to discuss the value of their shares and failed to participate in the discussions.

Control Systems: emphasis was put by Sony on emergency fixes and budget plans as the major systems of control. No emphasis was made on quality. The belief was to get more done under the least possible costs. The junior workers were rarely given rewards for the achievements they had made nor awarded bonuses at the year end. These measures to control costs hurt the company and made the quality of the products they manufactured to be very poor.

Organizational Structure: Sony had the transnational/functional type of organizational structure where the CEO is at the apex and all the heads of departments report to the CEO. The belief at the organization was that of top management making all the major decisions without involving the junior staff including the engineers. This harmed cooperation and liaising between the various departments and delegation increased so as to get the work done.

Stories: The company had carried out a number of restructuring in the last nine years so as to better the financial position of the company. Focus was not on the customer. Investments were made on non-core areas of operations and the organization did not have current products even with the presence of very good engineers.

Despite the company believing in the people's and company's harmony, all the restructuring activities reduced the employees' morale and it could be seen in the new excitement of employees after Howard Stringer began his career at Sony.

Rituals and Routines: Because of the respect in the culture of the Japanese they never fired their senior executives even after they had retired. They got new positions as 'advisors' (Gunther, 2006) and every of the retired executives were furnished with a car and driver and a secretary and they actually had the power to second-question Sony's employees who were still working in the company.

The ritual at Sony was that when an engineer discovers a fault in any product the engineer would inform the executives and they would just solve the problem and do away with it. The senior executives were therefore not involved deeply in Sony's business.

Symbols: A seniority symbol existed with the corporation failing to retire the senior executives and also given that at the annual general meetings the executives were offered the most comfortable seats in the room while other Sony employees had to make do with the least desirable seats in the room as a symbol of the significance the senior executives had in the company.

In the creation of the desired harmony and so as to offer employees a wide range of varied health benefits, Sony offered its employees the following benefits (Information extracted from Sony website)

fitness centers were provided at Sony workplaces they gave flu shots on the sites of work cafeterias at the places of work the company organized wellness fairs the employees were given 100% dental and medical plans health risk assessments were carried out for the employees the company had programs to help people quit smoking they availed information regarding nutrition

How Sony's Organizational Culture Promotes Efficiency

Sony Corporation is grounded well because of its organizational culture. This essay holds the belief that the organization is actually very strong given its goals, principles and policies. As this essay details, all these are actually quite clear. And its members strongly believe this to be true, especially the founders of the company. This therefore defines the success story of the organization and keeps every person on fire to work towards the achievement of the organization's goals. The employees get encouraged to be involved with the organization and work as teams. They are told to be free to express any ideas they have. Through this state, the organization is capable of 'regenerating' and so enhancing its efficiency levels.

The minimalist perspective taken by Sony when compounded with innovation has the potential to increase efficiency in Sony in terms of performance and in its range of products. For example, following the launch of Sony's Walkman, consumers have grown to be comfortable with a personalized audio experience gadget. The advantage swings to Sony since it was the first in the game and launched the first product of this kind. Covin and Miles (1999) argue that there is minimal risk behind the way Sony introduces new products into the market. This is because it employs little resource in such launches (p. 47). In addition, Sony instills in its engineers a need to always manufacture quality products and so the company can effectively manage its performance. This concept is in harmony with the concept fronted by President Nobuyoki called the 'digital dream kid'.

The Sony Corporation also employs an effective and sound decision-making process. They tend to get views and responses from various people in the organization given their insistence on team work. Their executives, having gathered the needed information, are at a better place to make informed decisions and the organization therefore performs better as they drive the organization considering the major players in that market and environment (Richard Gershon and Tsutomu Kanayama, 2002).

Further, the company is at an advantageous position following the company restructuring exercise. Employed in the organization is an independent structure that is still interactive with the various divisions in the organization. Remember also that the organization has a philosophy of having the mindset of a small start-up despite its big size. Interactions that are cross-cultural are present in the Japanese manufacturing culture (p. 156). There is decentralization, but it is still capable of facilitating the company's needs and is able to thrive in this century.

The corporation's two main principles when it comes to procurement have also fostered the efficiency of the organization. As already been pointed out, a Harvard professor stresses that firms must add value to those products they source from suppliers as these products await transfer to the consumers. Without that kind of value addition, the company has no business operating as a business. By carefully purchasing its raw materials and taking the effort to maintain amicable relationships with the suppliers of the raw materials, Sony has gained the ability to make and maintain special and good quality products that benefit all the consumers of the organization's products the world over.

Many lessons have been drawn from the previous failures of the organization especially the electric rice cooker. Mr. Ibuka now stresses on the concept of creation of devices that have daily usage. The cooker was a failed project because Sony did not do adequate research and did not use the right rice. Mr. Ibuka continues to work on this through incorporation of perseverance in the innovation of products, and this time with the right type of rice.