Leadership and Changing Environments at Sony - Case Study Example

Leadership and Changing Environments at Sony Name Course Tutor Date Leadership and Changing Environments at Sony Introduction Over the years, Sony Corporation has enjoyed massive growth in the 90’s to early 2000 (Mariko & Shunichi, 2012). However, the company has struggled to perform to the expectation from the 2000 to around 2005 when the new CEO was appointed. According to Schermerhorn et al. (2014, p.430) the changing business environment characterized by communication failure, interpersonal failure and poor leadership, earthquake, online database hacking, economic global crisis was blamed for the company’s poor performance. Even though, leadership and management style has been questioned, competition and globalization has happened rapidly prompting the CEO to change his strategies to sustain competition. The rapid change has overturned good times when Sir Howard Springer led to company to positive results; Sony TV set sales increased by 44%, computer sales increased by 28% while mobile phones and games also became more profitable (Schermerhorn, et al., 2014, p.430). In the period from 2011, the company has suffered from series of loses which has been blamed on poor leadership. Schermerhorn et al., (2014, p.430) argue that this is because these challenges such as database hacking, earthquake attacks and economic global is affecting Sony Corporation yet no proper response has been put forth by Sir Howard Springer. Hence the issue has resulted into renewed interest in transformational leadership. Based on the information, this case study will evaluate the need for transformational leadership for Sony to strength its brand. Issue identification The issue identified at Sony is the inability of the leadership to create the company strategy that can improve its performance in the changing environment (Schermerhorn et al., 2014, p.430). Some changes which Howard and has tuned to hurt his tenure is sidelining the deadwood employees, shifting the production oversee, outsourcing operations, developed new business units after selling old ones and neglecting research and development. Mariko & Shunichi (2012) contend that his tenure led to company’s stock decline by 75%. Howard failed to observe that the consumer electronics could have become commodities, which most of them were cheaply manufactured in China and Korea. Shifting most production abroad was both a good and a bad move. In foreign country, the company faced a stiff competition and government regulations. Sony’s Corporation brand has not been strong enough to counteract quality and new products manufactured by other market players at low prices (Mariko & Shunichi, 2012). Howard also was not able to get Sony Corporation into Smartphone platform which was lucrative from 2007 (Schermerhorn et al., 2014, p.430). The Smartphone market was market by launched by iPhone by Apple Inc. in stead the company opted to form a joint venture with the Ericsson so a as to capture larger share of the market. In a nutshell it did not make its own Smartphone. It later bought Erickson but it was late for it to gain competitive advantage in a market which was already influenced by Samsung, Apple and Nokia. Similarly, Sir Howard was not able to push Sony Corporation to enter the computer market when it just took off (Mariko & Shunichi, 2012). He however, pushed the sale of Sony computers but it did not last since it was already flooded with cheap computers from Dell, Hp, Samsung, Apple and other companies. According to Mariko & Shunichi (2012) launched of iPod by Apple also greatly affected Sony. This is because it was Sony who planned to venture into this kind of music system storage. This was followed with the launch of iTune Music store. Still Sony had project similar to that of ITunes but took a long period to release into the market. This point out that Sony led by its CEO Sir Howard did not want to let go its CD project (Mariko & Shunichi, 2012). In technology industry, time is of essence and the first persona to launch new and unique product influences the market and gain competitive advantage. During its tenure, even though he recognized there was deadwood among managers, he retained and sidelined them while promoting talents (Schermerhorn et al., 2014, p.430). According to Crain (2009, p.35) deadwood managers are described as low performing managers or managers who are less productive. From this perspective, it can be argued that the company allowed low performing managers. Schermerhorn et al., (2014, p.430) posited that these managers also started sabotaging reforms that Howard was fronting. Demoting them is not a solution but rather encouraging poor performance. Some employees see such cases as organizational politics, hence when demoted they are still have a hand to sabotage the leadership through under-dealings (Murphy, 2005, p.128). Outsourcing operations has a great native impact. With outsourcing operations management roles are transferred to another company. Decisions are influenced by such firms because the parent company, Sony believes this company as the best strategies. This means control of operation is limited at the headquarters and the outsourced firm which is helping the leadership to run the company can interfere with the operations (Baitheiemy, 2003, p.91). The risk which outsourcing companies face is the business knowledge loss. Youndt & Snell (2004, p.341) pined that companies are advised to cautiously evaluate its business knowledge and decide if transferring it to the offshore place will put them to risk of the continuing capability to operate at the needed levels. At times transferring the unit to a certain location or country makes it hard for a company to produce the number of goods they used to do back at their original plant (Agarwal & Nisa, 2009, p.85). Critical Discuss Research and development helps managers come up with new strategies at the workplace. Research and development is described and the investigative actions which a business decides to carry out with intent of discovering or improving new or existing products, concepts or procedures (Mendonca, 2009, p.473). In the modern world of globalization, research and development remains one of the key issues which drive transformational leaders. In other words, transformational leaders formulate their strategies based of the outcome of research and development. Mendonca (2009, p.476) holds that a positive correlation between R & D and organization productivity has been established in nearly across every sector of economy. However, the relationship is stronger within technology companies. The company can also use it to keep an eye on its rivals and consumers so as to maintain pace with contemporary trends and evaluate societal desires needs and demands (Ortega-Argiles, Potters& Vivarelli, 2011, p.821). Transformational normally often do not seek to maintain status quo but rather bring change to an organization (Murphy, 2005, p.128). Deadwood managers and employees are always resistant to change. This is because it would disrupt their positions and their comfort zone. This is true with the situation when Sir Howard Zinger took the helm of Sony as the new CEO in 2005. Deadwood managers tried to sabotage changes that he was bringing into the organization (Schermerhorn et al., 2014, p.430). Research and development on employees could have provided the CEO with the way to deal with less productive employees. It this case, dismal could have been the viable cause of action. Youndt & Snell (2004, p.352) affirm that normally, employee wage turns out to be a liability on the balance sheet especially when the company makes loses. Actually, the retained earnings are affected mostly be the salaries it remunerates its employees yet they do not work for positive results. As stated earlier, shifting the production oversees and outsourcing operations has its negative impact on the organization. In the recent years Sony Corporation has experienced a number of database online hacking (Schermerhorn et al., 2014, p.430). In the process it has lost its important strategies and customer confidential information. It is a proof that leadership was not taking data security seriously hence they might have secured its database. Again, the company database was hacked in 2011 exposing the secrets of Sony businesses (Schermerhorn et al., 2014, p.430). It is depict a situation of less concern from the leadership, particularly when a mistake is repeated and in the process the company and customers suffers. Moving to another location could comprise business knowledge. This could have resulted to hacking of Sony’s online database. Hence, companies must carefully assess business knowledge and determine if moving it to an offshore location will compromise the company’s ongoing ability to perform at the required levels (Agarwal & Nisa, 2009, p. 86). Many companies such as Sony have however found it difficult to invest heavily when its company is making huge looses. Also change is taking place so fast and a product might just get outdated within a short period of time after research. Recommendations After recent years of dismal performances particularly between 2008 and 2011, Sony’s new CEO needed to devise new strategies to attract customers and increase profits. Some of the proposed strategies include reduce operation costs, improve the selected markets, create strategic partnerships, differentiation and better positioning. To increase its marketing, Sony Corporation needs to form strategic partnerships with companies in other target markets. Kapferer (2012) argues that the strategic partnership is meant to combine forces to enhance coverage of various markets. For instance, the company has not done well in different market and it was witnessed when Sir Howard recommended close of some business units while opening new ones. Closing while opening new ones means doing the same thing. Thus improving sales through partnership can be more profitable since it also eliminates business risks in overseas markets (Kapferer, 2012). In the recent years, Sony has incurred high cost of operations due to increasing high wage bill earned by less productive employees, earthquakes and implementation of security on database (Schermerhorn et al., 2014, p.430). Therefore, the first step should eliminate less performing managers and employees. Money used to pay such managers can be used for other projects. Conclusion From the case study, Sony is currently facing the inability of the management to company up with proper strategies to sustain competition in the ever-changing business environment. The situation has been intensified with put less emphasis on research and development. Strategic marketing has become a very important tool in gaining competitive advantage in world markets. As business environment becomes competitive, modern managers must seek to get the best strategies in when expanding to new markets. In doing this, transformational leadership and research and development forms the best factors in formulating best strategies for Sony Corporation. References Agarwal, R .,& Nisa, S. (2009). Knowledge Process Outsourcing, India's emergence as a global leader, Asian Social Science 5 (1): 82-92. Retrieved on 2nd January 2015 from www.researchgate.net%2Fpublication%2F41846103_Knowledge_Process_Outsourcing_Indias_emergence_as_a_Global_Leader%2Flinks%2F0c960523af2f51b501000000.pdf&ei=rhunVN_gNsyuU-vKg7gL&usg=AFQjCNEhTHkDTVV48CGAgjekKqi2ZdvxcQ&sig2=BpGaEF6n2wMrDWTcvxXIlQ&bvm=bv.82001339,d.d24 Baitheiemy, J. (2003).The seven deadly sins of outsourcing. Academy of Management Executive, 17(2): 87-98 Crain, D.W. (2009). Only the right people are strategic assets of the firm. Strategy & Leadership, 37(6): 33 – 38. Kapferer, J.N. (2012). Strategic Brand Management, 5th Ed ed. London: Kogan Page Mariko, Y., & Shunichi, O. (2012). Sony, Sharp Losing $11 Billion Leaves Investors Let Down. 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