The paper "Organizational Change Analysis of Sony" is a great example of a management case study. This case study in organizational change analysis focuses on organizational change at Sony. This report outlines the need for change at Sony since 1994 when the corporation’ s profitability declined as a result of competition from other electronics companies such as Apple and Samsung. It provides an overview of the process of change at Sony, analyses the nature of change at Sony, and describes the change management models that are most appropriate for understanding change at Sony in terms of organizational redesign interventions, strategy, and organizational culture.
In its conclusion, the report recommends that Sony continue redesigning itself as a built-to-change organization. 1.0 Introduction 1.1 Organization Background Sony Corporation (referred to as “ Sony” ) is a Japan-based multinational conglomerate and one of the world’ s leading manufacturers of electronics products. The origins of Sony can be traced back to 7 May 1946 when Masaru Ibuka and Akio Morita co-founded the Tsushin Kogyo Kabushiki Kaisha (Tokyo Telecommunications Engineering Corporation) (Sony 2012). Sony would subsequently become one of the world’ s largest electronics companies in the late 1980s and into the 90s with a diverse product line in electronics, entertainment, insurance, and finance (Hitt et al.
2009). Over the last two decades, Sony’ s products, such as televisions, laptops, cameras, music players, car stereos, video game consoles (Playstation), and its music and pictures (film) groups, have been some of the most popular in the world. This report will analyze organizational change at Sony. It will begin by providing a brief history and overview of the change process at Sony, highlighting how change has been implemented as a strategic reaction to the external environment.
The report will then analyze the nature of change occurring at Sony since 1994 and appropriate models for understanding change at Sony. The report will then conclude by recommending that Sony should redesign itself as a built-to-change organization. 2.0 Organizational Change at Sony 2.1 The Need for Change at Sony The need for change at Sony since 1994 when the first discernible restructuring effort was initiated can be understood as part of its strategic reaction to external environmental forces such as changes in technology and competition (Waddell et al 2011).
While Sony had been one of the world’ s largest and most successful electronics manufacturers in the early 1990s, the corporation began struggling in the late 90s as it faced year after year of declining profits and a shrinking market share in its business lines. Despite a series of organizational changes aiming to halt the drop in profits, Sony’ s financial performance would continue to deteriorate to losses of ¥ 293.36 billion in 1995 (BBC News 1999). In response to its declining financial performance in the early 1990s, Sony has introduced a series of changes to its management structure with the intention of reversing this decline.
For example, in 1994 under the chairmanship of Norio Ohga, Sony transformed its management structure from that of a “ group” into eight divisional companies – a move aimed at harnessing the potential of its high-growth businesses in an increasingly dynamic market. The restructuring was also intended to streamline decision making by halving the number of decision-making levels as each divisional company would have its own autonomous leadership and would be responsible for its own goals, strategy, and financial performance – an intervention consistent with Waddell et al. ’ s (2011) built-to-change design.
This restructuring, however, did not produce the desired results as Sony’ s financial performance continued to deteriorate in the late 1990s (Kunii 1999, Yasi 2011). Subsequent restructuring efforts were made in 1996, such as restructuring the company from eight-division to a ten-division company structure (Kunii 1999).
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