Introduction:
Sony Corporation started planning in 2003 for some big personnel changes, all the way to the top. Their stock had hit a high point in 2001 and was steadily dropping and they decided it was time for changes. By 2003 they were in trouble. Once a nimble young company capable of challenging the behemoths because of their exciting ideas, they had become one of the behemoths. This put them in the awkward position of being a little of everything, but not the best at anything. This is not a good place to be, especially if the company is on the way downhill at the time. Clearly, they needed to do something to revitalize the corporation and to recapture the interest of the gaming community that fueled its original successes.
The prices rose around 2007 when they started implementing them. Once they were in place however the price dropped again. In early 2013 the stock prices fell to a low point, associated with the poor reception it received at the E3 Electronic Entertainment Expo were it received only a slight edge over Microsoft because of its “marginal edge on graphics, frame rates, and price.” .
The Planning Stage - 2003 to 2007:
In 2003 Sony knew it had to make some changes if the corporation was to survive. It was no longer the bright, flexible and innovative young company that captured the imagination of the gaming community. It had grown too large for its niche. The problem was that a large corporation needs a stable structure, and sound mature reasoning; whereas the gaming industry needs bright innovative minds that can stay on the cutting edge and a flexible corporate structure that supports them. These are two very decidedly different corporate structures.
In the autumn of 2003 Sony revealed plans to abandon its management system in favor of a two layer, four company structure intended to revitalize its competitiveness in the gaming world. .
On the 7th day of March in 2005 the Sony Board of Directors made history when it announced that it had appointed Howard Stringer to head the corporation as CEO and Chairman. Stringer was the first non-Japanese CEO ever to head Sony Corporation. At that time Sony’s Electronics division was showing negative growth. . In September 2005 Sony declared its intention to strengthen its development capacity. . On April 1, 2007, it revealed its new “"B2B Solutions Business Group" consolidating the B&P Business Group, FeliCa Business Division and part of the Personal Solutions Business Group” . It also announced the appointments found in the attached Addendum A.
The Initial Public Reception - 2007:
Initially, the public responded well to these changes. Sony Corporation’s stock prices rose. . The corporation enjoyed headlines about how Sony was turning around after the problems it was undergoing in 2005. . Sir Stringer changed the corporate thinking from the backward “Make Sony Cool Again” to the more visionary “Make.Believe” . Stock prices were up and the future looked bright. The perception was that Sir Howard Stringer “both externally and internally, implemented the organizational structural change to everyone’s full satisfaction.” . The well planned organizational restructuring initiated in 2003 had its desired effect and everyone seemed happy, until the world economic climate changed.
The Ongoing Effects of the Changes – 2008 to 2012:
Public perception remained good for a couple of years. At first the stock was enjoying good prices and moderate trading. Public confidence was high that Sir Howard Stringer was going to be able to pull the company around and “ recapture the spirit of innovation so deeply embedded in its DNA.”. This confidence existed even in the face of the economic problems that existed at the time. In Japan the yen was down, and the competition was up. Worldwide economies were suffering and the games that are so important to Sony’s economic health were not always a top priority for many people. Certainly, they were not as urgent as paying off mortgages, student loans and in some cases, buying food.
Sony knew that they had to change to keep up with the rapidly changing business environment, and to keep the interest alive in the gaming public’s awareness as well. To do that they had to embrace change, not only to cope with it but to assume leadership and take charge of it. This meant not just making far reaching personnel changes and reappointments (see: attached ADDENDUM A) but to retrain their people, get them engaged in actively working with each other to bring this change about. . At that time Sony’s leadership acknowledged that leading in changing times was what the company needed.
Unfortunately for Sony 2009 was not a good year, for retail sales or stock prices. Sony posted losses for 2008 for the first time in 14 years. Sony was not alone in its suffering, and that made matters worse. . There just was not the kind of disposable income there for people to go out and spend on games. Although 2010 was not a good year for sales either, stock prices were up dramatically from the previous year. Even though consumers were not buying as much the new corporate governance seemed to be making a good public impression and that was reflected in the sale price of their stock. . Then stocks prices started falling again in 2011. This time Sony reacted quickly with a new Corporate Organizational Restructuring.
A New Reorganization Plan 2012:
On 27 March 2012 Sony announced that it established a new corporate structure positioning itself to place digital imaging, games and mobile apps as the three core pillars of its electronics business. Sony further revealed that it established this structure through the corporate leadership of President and CEO Kazuo Hirai. . As part of this corporate restructuring and revitalization plan it established another new corporate structure (See: Addendum B). Led by Kazuo Hirai who as President and CEO, replaced Sir Howard Stringer, Sony again restructured their entire organization and called it “One Sony.” This was not the long planned and well thought out campaign that started in 2003. This was a fast hard move to recapture their market share with immediate change in reaction to a suddenly shifting market and economic climate. “The key ” Hirai was quoted as saying “is creating products that move people emotionally.” . Hirai was concerned with getting back to the core of Sony’s strengths, the video gaming industry and using the television business as a point of contact with Sony’s customer base. Sony dissolved its joint venture with Samsung and moved engineering resources out of Japan into Malaysia. Hirai used the Japanese word “kando” to describe the new direction he was taking Sony in. He defined it as “to move people emotionally.” Saying that in the Sony context it meant “to put a big smile on our customers’ faces around the world. That connects everybody with Sony, whether you’re an engineer improving picture quality on an LCD television or you’re a video game producer.” . Hirai was focused on getting back to Sony’s core, divesting, expanding the Sony United concept to become One Sony. When he moved into his position he saw the future as mobile space and smartphones and tablets as the devices that would make use of it. . As part of this he looked to the acquisition of Gaikai and the company that will help take the video game industry into the cloud space. . He saw Japan and the United States as remaining places for some manufacturing. Unfortunately, he also admitted that Sony’s head count had to come down by about 10,000. Although in a 2912 interview he admitted that “that it’s not an easy decision to make but if the decision needs to be made for the right reasons, those decisions have to be made.”
The Next Phase – 2013:
Sony may now be “One Sony” but, Hirai is not putting smiles on everyone’s faces, at least not yet. In June, 2013 Sony’s PS4 did not show well at the E3 Electronic Entertainment Expo although it received a slight edge over Microsoft because of its “marginal edge on graphics, frame rates, and price.” . After the past failures in reorganization Sony did the worst thing possible, the safe thing. The whole gaming industry is based on appealing to people who want adventure in their lives. The last thing they are going to buy is a predictably safe, new, boring game system that is just like everyone else’s.
Devoted gamers were disappointed with both large corporations for not being more innovative and for not doing a better job at distinguishing themselves from each other. One of the reviewers observed that this failure opened the door for some of the smaller, innovative companies to grab a larger share of the gaming market. . That was not good news for Sony since this is how they began their rapid rise to success so many years ago. The people who play the Stock Market are certainly watching to see what the gamers are going to do next. It seems like in the gaming industry there is not much difference between the cutting edge and the bottom line.
Works Cited
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« New Appointments » ( as of April, 1st )
New appointments relating to the organizational changes are as follows.
- Ryoji CHUBACHI (President and Electronics CEO, Representative Corporate Executive Officer, Member of the Board)
President of B2B Solutions Business Group
- Mitsuru OHKI (Corporate Executive EVP)
In charge of B&P, B2B Solutions Business Group
(Currently) President of B&P Business Group
- Hiromasa OTSUKA (Corporate Executive SVP)
Deputy President of B2B Solutions Business Group
(Currently) Deputy President of Personal Solutions Business Group,
Senior General Manager of FeliCa Business Division
- Yoshinori ONOUE (Corporate Executive SVP)
Deputy President of B2B Solutions Business Group
(Currently) Deputy President of B&P Business Group
- Shinji HANATANI (Corporate Executive SVP)
Deputy President of B2B Solutions Business Group
(Currently) Deputy President of B&P Business Group,
Senior General Manager of Product Planning & Marketing Division,
B&P Business Group
- Takashi FUKUDA
President of TV Business Group
(Currently) Deputy President of TV & Video Business Group
- Hidenosuke KANAI (Corporate Executive SVP)
Deputy President of TV Business Group,
Senior General Manager, Planning and Control Division, TV Business Group,
Deputy President of Video Business Group
(Currently) Deputy President of TV & Video Business Group,
Senior General Manager, Planning and Control Division, TV & Video Business Group
- Kiyoshi NISHITANI (Corporate Executive SVP)
President of Video Business Group,
Senior General Manager, Storage System Development Division, Video Business Group
(Currently) Deputy President of TV & Video Business Group,
Senior General Manager, Storage System Development Division,
TV & Video Business Group
- Kazumasa SATO
Senior General Manager, Creative Center
(Currently) Representative Director of Sony Style (Japan) Inc. .
- Howard Stringer
Director, Representative Corporate Executive Officer, Chairman
(Currently Director, Representative Corporate Executive Officer, Chairman, CEO and President)
- Kazuo Hirai
Representative Corporate Executive Officer, President and CEO
Currently Representative Corporate Executive Officer, Executive Deputy President, Officer in charge of Consumer Products & Services Group (“CPSG”), Common Software Platform, Global Sales & Marketing Platform and Creative Center)
- Ryoji Chubachi
Director, Representative Corporate Executive Officer, Vice Chairman
Currently Director, Representative Corporate Executive Officer, Vice Chairman, Officer in charge of Product Quality & Safety and Environmental Affairs)
- Hiroshi Yoshioka
Corporate Executive Officer, Executive Deputy President
Officer in charge of Medical business
(Currently Corporate Executive Officer, Executive Deputy President, Officer in charge of Professional, Device & Solutions Group (“PDSG”))
- Keiji Kimura
Corporate Executive Officer, Executive Vice President, Officer in charge of Intellectual Property
(Currently Corporate Executive Officer, Executive Vice President, Officer in charge of Intellectual Property and the Disc Manufacturing Business)
- Nicole Seligman
Corporate Executive Officer, Executive Vice President and General Counsel
- Masaru Kato
Corporate Executive Officer, Executive Vice President and Chief Financial Officer
- Tadashi Saito
(Newly appointed)
Corporate Executive Officer, Executive Vice President and Chief Strategy Officer
(Currently Corporate Executive, Executive Vice President, Deputy President of PDSG, President of Semiconductor Business Group, PDSG)
- Shoji Nemoto
Newly appointed)
Corporate Executive Officer, EVP (promoted)
Officer in charge of Professional Solutions Business, Digital Imaging Business, Disk Manufacturing Business, System & Software Technology Platform and Corporate R&D
(Continues as) President of Professional Solutions Group
Currently Corporate Executive, Senior Vice President, President of Professional Solutions Group, PDSG)
- Tomoyuki Suzuki
(Newly appointed)
Corporate Executive Officer, Executive Vice President (promoted)
Officer in charge of Semiconductor Business, Device Solutions Business and Advanced Device Technology Platform
President of Semiconductor Business Group, President of Core Device Development Group, Advanced Device Technology Platform (Continues as President of Core Device Development Group)
(Currently Corporate Executive, Senior Vice President, in charge of R&D Platform (Materials/Device/ Semiconductor Technologies), President of Core Device Development Group, R&D Platform, Deputy President of Semiconductor Business Group, PDSG)
- Kunimasa Suzuki
(Newly appointed)
Corporate Executive Officer, Executive Vice President (promoted)
Officer in charge of PC Business, Mobile Business and UX, Product Strategy and Creative Platform President of UX & Product Strategy Group, UX, Product Strategy and Creative Platform
(Currently Corporate Executive, Senior Vice President, Deputy President of CPSG, In charge of Integrated UX & Product Strategy, President of VAIO & Mobile Business Group, CPSG)
Organizational Changes (as of April 1, 2012)
- Consumer Products & Services Group (“CPSG”) and Professional Device & Solutions Group (“PDSG”) to be abolished.
- Home Entertainment Business Group to integrate personal audio business and be newly established as Home Entertainment & Sound Business Group.
- Personal Imaging & Sound Business Group, CPSG to be realigned as Digital Imaging Business Group
- Medical Business Unit to be newly established.
- R&D Platform and Common Software Platform to be realigned as System & Software Technology Platform, Advanced Device Technology Platform and Corporate R&D.
- Quality Center to be integrated into Manufacturing, Logistics, Procurement and CS Platform and the platform to be renamed as Manufacturing, Logistics, Procurement and Quality Platform.
- UX, Product Strategy and Creative Platform, UX & Product Strategy Group to be newly established.
Management Appointments (as of April 1, 2012)
- Haruyasu Nagata
Corporate Executive, Senior Vice President
(Newly appointed, currently Group Executive)
(New) In charge of Global Sales & Marketing
President of Global Sales & Marketing Group
(Current) President, Sony (China) Co., Ltd
- Shigeki Ishizuka
Corporate Executive, Senior Vice President
(New) President, Digital Imaging Business Group
(Continues as) President, Device Solutions Business Group
(Current) President, Device Solutions Business Group
- Masashi Imamura
Corporate Executive, Senior Vice President
(New) President, Home Entertainment & Sound Business Group
(Current) President, Home Entertainment Business Group, CPSG
- Ichiro Takagi
Corporate Executive, Senior Vice President
(New) Deputy President, Home Entertainment & Sound Business Group
(Current) President, Personal Imaging & Sound Business Group, CPSG
- Keiichiro Shimada
Corporate Executive, Senior Vice President,
(New) In charge of Mid-to-Long term Technology, System & Software Technology Platform and Corporate R&D
(Current) In charge of R&D Platform (Information/Media Technologies), Common Software Platform and President of Technology Development Group
- Kiyoshi Shikano
Corporate Executive, Senior Vice President
(New) In charge of External Affairs, Kansai Region
(Current) Global Sales & Marketing Officer,
President of Global Sales & Marketing Group
- Tsugie Miyashita
Corporate Executive, Senior Vice President
(New) Special Assignments
(Current) In charge of External Affairs, Kansai Region
- Ryosuke Akahane
(New) President, VAIO & Mobile Business Group
(Current) Deputy President, VAIO & Mobile Business Group
- Mitsuya Kishida
(New) President, Production Group,
Manufacturing, Logistics, Procurement and Quality Platform
(Current) Deputy President, Production Group,
Manufacturing, Logistics, Procurement and CS Platform
- Nobuki Kurita
Group Executive
(New) President, Sony (China) Co., Ltd
(Current) President, Corporate Executive,
Sony Marketing (Japan) Inc.
- Hiroshi Kawano
(New) President, Corporate Executive, Sony Marketing (Japan) Inc.
(Continues as) President, Sony Computer Entertainment Japan* .
