Sony Corporation - Restructuring Continues, Problems Remain
apan-based electronics and communications company, Sony Corporation, was subjected to a spate of restructuring exercises since 1994 to improve the financial performance and competitiveness of the company. With the initial efforts to restructure the company not yielding results, Sony went in for a revamp of the top management in 2000.
The efforts by the top management in organizational restructuring failed to put Sony back on the growth track. At this juncture, in 2005, Howard Stringer became the first non-Japanese CEO of Sony. Under his leadership, Sony was subjected to a major reorganization in September 2005.
Stringer's efforts started to show results and Sony reported encouraging results for the financial years ending March 2007 and March 2008.
However, by late 2008, Sony was again in deep trouble. For the fiscal year ending March 2009, the company announced annual loss of ¥ 98.9 billion. In February 2009, Sony announced another round of reorganization, with Stringer assuming more powers as the President of the company. Through this reorganization, Sony formed two business groups - The Networked Products & Services Group and The New Consumer Products Group. The case details the restructuring exercise and outlines the pros and cons of these efforts. It also discusses in detail the main reasons for Sony's problems including culture, competition and macro-environment issues.
Issues:
» Examine the adverse implications of frequent restructuring at Sony Corporation.
» Analyzing the impact of competition in global consumer electronics industry on Sony.
» Evaluate the strategies being adopted by Sony to regain lost market share.
» Appreciate the importance of innovation and introducing new technologies in the consumer electronics industry.
» Critically study the latest restructuring plan proposed by Stringer in February 2009 and evaluate its efficacy.
Contents:
Page No.
Sony in Crisis, Again 1
Background Note 2
The Restructuring
The efforts by the top management in organizational restructuring failed to put Sony back on the growth track. At this juncture, in 2005, Howard Stringer became the first non-Japanese CEO of Sony. Under his leadership, Sony was subjected to a major reorganization in September 2005.
Stringer's efforts started to show results and Sony reported encouraging results for the financial years ending March 2007 and March 2008.
However, by late 2008, Sony was again in deep trouble. For the fiscal year ending March 2009, the company announced annual loss of ¥ 98.9 billion. In February 2009, Sony announced another round of reorganization, with Stringer assuming more powers as the President of the company. Through this reorganization, Sony formed two business groups - The Networked Products & Services Group and The New Consumer Products Group. The case details the restructuring exercise and outlines the pros and cons of these efforts. It also discusses in detail the main reasons for Sony's problems including culture, competition and macro-environment issues.
Issues:
» Examine the adverse implications of frequent restructuring at Sony Corporation.
» Analyzing the impact of competition in global consumer electronics industry on Sony.
» Evaluate the strategies being adopted by Sony to regain lost market share.
» Appreciate the importance of innovation and introducing new technologies in the consumer electronics industry.
» Critically study the latest restructuring plan proposed by Stringer in February 2009 and evaluate its efficacy.
Contents:
Page No.
Sony in Crisis, Again 1
Background Note 2
The Restructuring