Leadership and Changing Environments at Sony - Case Study Example

Leadership and Changing Environments at Sony Name: Institution: Table of Contents Leadership and Changing Environments at Sony 1 Table of Contents 2 Abstract 3 1.0 Introduction 4 2.0 Issue Identification 5 3.0 Critical Discussion 5 4.0 Recommendations 8 5.0 Conclusion 8 6.0 References 9 Abstract Survival of any organization needs that the methods used by leaders to convey operational knowledge have to change faster than the changes in environment that threaten feasibility. The leaders’ novel strategy must be about continually familiarising to change in an environment that is ever-changing as evidenced in Sony case study. So as to achieve this, the emphasis should be to look further than market share and competition to more important questions of sustainability as well as survival in an environment that is continuously changing and turbulent. In this report we seek to examine Sony’s leadership and changing environments, through analysing a management issues that needs to be addressed within the organization and work. Leadership and Changing Environments at Sony 1.0 Introduction Sony Corporation is an international company with its headquarters in Tokyo, Japan, and remains to be the largest media conglomerates in the world with huge profits, such as US$88.7 billion in 2008. Sony is still the world’s top producers of video game consoles, video communications, electronics, as well as IT products for the professional and consumer markets. However, Sony’s margins and prices are facing extreme pressure considering that the electronics industry by 2004 experienced a double-digit price drops concerning products like flat-panel televisions, digital cameras, and DVD recorders. Increasing digitalisation of almost all electronic devices from TVs, audio devices and handsets has as well result in shorter lead times for products’ replication by competitors. The report will provide a brief introduction; highlight the issue facing Sony; provide a critical discussion and recommendation; and a conclusion. According to Simoes and Esposito (2014), for an organization to be well managed, there must be well defined plans, organized processes, systems and structures so as to function efficiently and effectively. Therefore through effective leadership, employees must be able to perform activities, assess, and monitor the outcomes. Still the leadership must enable the organization to cope with external environment which as mentioned by Manz et al. (2011) is naturally dynamic. As it will be evidenced in the report, lack of creativity attributed by poor planning is the major management issues facing Sony. 2.0 Issue Identification Sony is without a doubt an example of what ensues when an organisation blindly becomes in love with its brand; considering that Sony utilises its brand on every product: TVs, computers, cameras, video games, toys, among others. In an extraordinary move, some years back Sony made the decision to utilise its brand on a music label and a movie studio; thus, making Sony’s high-end products as well as low-end products to all carry the same brand. As a result, the brand became weaker; losing meaning, and making the company to become undistinguishing player in the world of electronics. Evidently this is an issue and is attributed by lack of creativity and innovation among the managers. Numerous developing issues, attributed by lack of innovation, forced Sony into an aggressive pricing approach, poor performance of Sony films, and increased competition. This can as well be blamed on lack of leadership bearing in mind that in the last two decades Sony have had just three CEOs. The changing environments, especially in Sony’s core electronics business, that makes up almost 70% of its profits experienced intense pressure from the competitors and the management failed to find any innovative and creative gadgets that could boost revenues. Lack of creativity, ill-advised decisions are to blame for the downfall of Sony considering competitors such as LG and Samsung have overtaken Sony in mobile phones and TVs markets. 3.0 Critical Discussion According to Ramezan et al. (2013), environmental issues are a good promoter of organisational change because they promote novel look at deep-rooted habits and provide an opportunity to re-examine the organisational culture. Manz et al. (2011) posits that a values-based culture no more require to be at variance with the business culture. Whereas the global environment and the economy time and again play important roles in compelling the organisations to make changes in their company, the outcomes may be positive. Involuntary changes give opportunities, which the company could have ignored at one time. They may result in higher worker morale, improved performance, and, eventually, better revenues for the business. The manner in which Sony responded to the changing global economy had an impact on the success and survival chance in the electronic industry. According to Storey and Hull (2010), contingency approach is no more adequate for basing a strategic change in an organisation. Storey and Hull (2010) rather holds the view that strategy and structure subsist interdependently and impact each other. A contingency approach to management is rooted in the principle that effectiveness of management is dependent upon the relationship between the use of management behaviours and particular situations. All activities rotate around the coordination of tasks and division of labour, as well as the manner this is carried out shapes the structure of the company. Situational factors as stated by Storey and Hull (2010) impact the choice of the strategy and structure design like environment, age, power in addition to technical system. With regard to Sony case, the company have been trying to restructure into a state-of-the-art organisation given that they have numerous support personnel, specifically the innovative employees, in addition to the fact that Sony management centralise their decision-making. Under different leadership, Sony has tried to re-establish their internal development by means of innovation through various organisational strategies. According to Ramezan et al. (2013), organisations must become accustomed to changing environments so as to develop, and that is why Stringer was appointed by Sony to maintain the environment’s dynamism. Sony’s strategy was developed around a centralised system for decision making and it depends on employees’ creativity whereas their objective is for market leadership and growth in a technological environment and a market that is extremely dynamic. For that reason, Sony can be regarded as an organisation that meets customer and work’s ever changing wants and needs on the notion that random change is unavoidable. When analysing Sony’s leadership and changing environments, McKinsey’s 7 ‘S’ Framework is a key model to taken into account, especially when identifying how the organisation realised their super-ordinate goals. The model is utilised in helping to identify what must be realigned so as to improve organisation’s performance, or to keep alignment during other organisational change (Singh, 2013). Owing to the fact that Sony was operating in a changing environment they cannot be based around positional concepts and for that reason try to build on their main competencies. Even though maintaining the organisation’s core business and being outstanding at what the company does is important for a company that have to be supplemented with a constant growth. Sony at the moment needs a form of nonstop improvement so as to remain competitive in the electronics market, considering that this can help the company maintain its market leadership. Companies that had core philosophy and maintained it for many years continues to perform astonishing well, whereas visionary companies outclass other systems in the organisation. Therefore it is apparent that Sony was to develop a lasting growth strategy instead of resting on past actions. Organisations requires lasting determined goals so as to double up as an effort focal point, something which Sony has failed to achieve, in spite of their detailed commitment to develop pioneering technology with entertaining content and also to create novel products. Additionally, Sony has unsuccessfully endeavoured to gain back its innovative culture as well as to enable its workers to come up with creative concepts, ideas, which are crucially needed. Prior to the arrival of Stringer, Sony had fallen behind their rivals, simply because they were contented with the little they had and had no intent moving forward. So leadership creativity exhibited by Stringer is what Sony needs to outdo its rivals such as Samsung considering that a company have to believe that ‘good can by no means be enough. 4.0 Recommendations There are scores of ways through which Sony can improve its value creating function, and this can be achieved if the company integrate and support its product line by exploiting of its music ad movie business together with its experience so as to bring value added content. Sony is currently the sole owner of Sony Ericson, which was a joint venture, so this offers Sony the chance to act without obstruction and to be creative in a booming tablet and Smartphone market. Sony should also venture in other industry such as healthcare, and the recent 30% stake acquisition in Olympus can offer the company a major penetration into the healthcare-imaging sector. Sony can as well achieve success through incremental adaptation and fine tuning and not by means of frame-braking change. Besides that, effective leadership can help Sony foresee the need for major change as well as make incremental changes so as to avoid any radical change. Stringer inability to forecast any change made Sony unable to apply incremental change and for that reason, the organisation need a more radical approach that have seen companies like Apple succeed in Smartphones market. 5.0 Conclusion In conclusion, as argued in the essay, Sony has become unsuccessful thanks to their inability to produce innovative products, thus, making its rivals outdo it in electronics market. Thanks to lack of creativity, Sony is currently having a rough time to compete their competitors, considering that when an organisation is extremely big it cannot change its processes or values to acclimatise to any changes within the market. For Sony to become successful, it has to produce something novel and focus on continuous development. Even though they are exceedingly far behind, thanks to contentment in previous years, a radical change can help alleviate the current management issue and help the company competitive again. 6.0 References Manz, C. C., Manz, K. P., Adams, S. B., & Shipper, F. (2011). Sustainable Performance with Values‐Based Shared Leadership: A Case Study of a Virtuous Organization. Canadian Journal of Administrative Sciences , 28(3), 284 - 296. Ramezan, M., Ebrahim Sanjaghi, M., & Rahimian Kalateh Baly, H. (2013). Organizational change capacity and organizational performance: An empirical analysis on an innovative industry. Journal of Knowledge-based Innovation in China, 5(3), 188 - 212. Simoes, P. M., & Esposito, M. (2014). Improving change management: how communication nature influences resistance to change. Journal of Management Development, 33(4), 324 - 341 . Singh, A. (2013). A Study of Role of McKinsey's 7S Framework in Achieving Organizational Excellence. Organization Development Journal, 31(3), 39-50. Storey, C., & Hull, F. M. (2010). Service development success: a contingent approach by knowledge strategy. Journal of Service Management, 21(2), 140 - 161. Read More