The Need for Change in Sony - Essay Example

? Organization behavior Different types of change that have occurred in Sony After Howard Stringer became the CEO of the American unit of Sony, herealized that were many inherent problems within the company that needs to be addressed. Besides, Sony also had to be at par with the rival companies like Samsung and Apple. He initiated changes in the company that began with redesigning the product line of the company focusing more on electronics, televisions, digital imaging, DVD recorders, and portable audio. He also initiated changes in its centralization power by authorizing the electronics division to be in charge of all duties and decisions. He tried to change the organizational structure to modify the corporate culture of the company. The company formed corporate tie ups with many companies to build its brand and increase exposure. These features introduced several forms of changes in the company. Firstly due to the redesigning of the product lines the patterns of work system in the company changed drastically. This began with the changes in the job description and skills and techniques of the workers as more emphasis was laid on the electronics goods and products. Changes in the organizational structure were seen in the form of centralizing the electronics department. The hierarchy of authority was modified. Division of labor was re-introduced with more emphasis on the R&D field. The hierarchy levels were reduced and more interaction was provided between the managers and front line mangers of the company. More hierarchy levels mean greater complications which would disrupt the decision making process gradually. The company previously had each unit with its own planning, human resources, finance, and sales functions and operated with considerable autonomy. This was not a very feasible strategy as it led to more troubles than solutions. Firstly, providing each unit with separate departments increased the cost of the company as it would be hiring many employees for each department. The autonomy offered to each unit would further increase the gap between the inter departments as there would be lack of communication. The span of control was reduced with Stringer laying off 10,000 jobs which comprised of 7% of Sony’s global workforce and shut down 11 out of 65 production units across the world (Howard Stringer: Turning Sony Around, 2003). This helped in reducing operation costs, reduced levels in hierarchy and better control by the managers. Sony was not advanced in technology and was redundant in its product designs. With the introduction of Apple iPods, the company felt the need to bring in changes in its working culture. Stringer who had introduced the changes believed that the new structure would streamline and speed up decision making across Sony’s product lines. It permitted uniform software development across the lines so that the products of the company would operate seamlessly with one another. This in turn eliminated the design and product redundancies and optimized the firm’s Research and Development spending. Apart from this, the corporate culture also saw changes in the company. sonSony had been long exposed to its conservative culture. When Stringer decided to introduce change in the company he faced oppositions as the cost of change was thought to be unnecessary by many people in the organization, stringer incorporated the idea of increasing the R&D area. He made them realize that R&D could save the company and it would attract customer attention. He made them realize that the problem with Sony products was not with its technology alone but also the product utility. The change plan also affected specific technologies. For example, Sony executives declared that television was of the utmost importance to the company. The firm scraped the production of cathode ray tube (CRT) television sets and focused on LCD and rear-projection TVs and technology. Also, Sony focused on self-luminous flat –panel organic light-emitting diode (OLED) displays, on high-definition technology, Blu-ray, and mobile technologies. The changed plan also helped the company to handle its problem where it was accused by the media of lacking in ideas (The rise and fall of Sony, 2012). It faced stiff competition from the high end products of apple that was both in terms of design and technology as well as customer utility far advanced than the Sony products. Sony had declared that it would be launching its television set that would compete with the Apple television sets. It has also introduced 3D technology in its LCD Bravia television sets (BRAVIA™ HD TV (LED & LCD, 2012). This showed that Sony progressed in its technological levels and decision making process after the changes were introduced in the company. 2. The internal and external forces that have created the need for change in Sony Before the launch of the present day modern electronics goods like Apple and Samsung products, Sony was the market leader for the consumer electronics goods. Sony had revolutionized the music industry in the ‘80s with the Walkman range of tape recorders while the Trinitron range of analogue TVs produced by the company were also popular for providing the sharpest and the cleanest picture on screen in the market. Riding on the back of its innovative and well-designed electronic products such as the Walkman, the Trinitron, as well as others (The rise and fall of Sony, 2012) Sony rapidly grew in size and money in the following years. Burt as success does not last forever, the company faced decline in its profitability from $150 to as low as $25. There were many factors that had led to this fall. Firstly, introduction of better technology and innovative products from rival companies like Samsung and Apple outshone their productivity. It is most likely to see people who prefer to listen to music on the Apple iPod instead of the Sony Walkman set and a general living room that might contain an LG or a Samsung flat-screen television than the Sony Bravia which was in their (Sony) product line. Two factors that have come up for explaining the loss of Sony in the market are its lack of ideas and the conservative nature of the company (The rise and fall of Sony, 2012). Apart from these there were several deep rooted internal problems too in the organization. The internal analysis of a firm is important in order to identify the strengths and the weaknesses. The external analysis helps to identify the outside threats and opportunities. Information about the strengths and weaknesses of the firm can be found from the firm itself. The analysis of the this study takes into consideration all the activities that are done by the company by taking into consideration the estimated cost of its operational activities, fixed cost with management, training expenditure, research in comparison with its competitors. By providing these information, the unit manager will be able to plan and formulate strategies in a better manner in order to achieve the objectives and missions of the firm. Sony faced changes in its organizational structure and corporate culture due to many factors. The stakeholders at Sony were showing dissatisfaction owing to its poor performance. The changes in the company were the outcomes in its internal and external environment. There were inherent problems in its working force, lack of co ordination between the managers and workers, repetition in product designs and techniques. Presence of several hierarchy levels within the departments made it difficult for the workers to approach their supervisors. There was lack of co ordination between the departments and people. The workers in the department lacked modern skills and technology. The corporate culture of the company also needed changes in its functioning. The company was confined within its conservative nature where it was reluctant to invest in R&D and other technical avenues. The company lacked support from its stakeholders when it wanted to initiate a new move as the shareholders were skeptical about it going by their earlier experiences. The company lacked in proper management and administration process. It was running into huge financial losses. The company lacked to implement the technology that was being used by its competitors. Also, the reputation and image that the company had gathered over so many decades was lost after its financial crunch, market instability and stakeholder displeasure. There were many external factors too that led Stringer to introduce changes in the company. Sony had been functioning with its conservative ideas and techniques for a long time. It was a pioneer of electronic goods till the market was flooded with Samsung and Apple products. The goods produced by Sony were found to be inferior and complicated for usage e.g. the Sony walkman which the consumers had replaced with the Apple iPod. Television sets were Sony’s forte. But here again the customers switched to the new LCD television sets of the rival companies. The firm produced cathode ray tube (CRT) television sets where as the consumers had developed a taste for focus LCD and rear-projection TVs and technology. The company was not able to live up to the customer expectations. Losses incurred by the company was huge both in the domestic units and oversee production plants. There closing of its production plants together with the sacking of 10,000n of its employees had created unrest among its present employees which, very naturally, affected the production rate. These internal and external problems led Howard Harbinger to introduce changes in the company. 3. Theories in leadership to implement changes There are many theories that can be used to bring in changes in an organization in any level. To introduce changes the quality of leadership is of vital importance. Going by the case study on Sony, the following leadership theories can be used by the managers to bring in changes in the company. Trait theory Trait theory focuses on the personality traits of individuals to separate the capable leaders from the lot (Kinicki, 1999, p.342). There are a few qualities and traits that can be recognized in leaders such as intelligence, task-relevant knowledge, his charisma, self-confidence, high level of energy, stress tolerance, honesty and emotional maturity. In Sony, Howard Stringer introduced changes in the company in all levels. To bring in changes at such large scales, it would require efficient managers who would also be able leaders. These leaders would be able to motivate the workers and employees. Situational theory The concept of situational theory is based upon a leader who is both flexible and knowledgeable (Hamilton, 2010, p.276). It assumes the fact that in an ever changing field a person cannot survive using the same techniques and structure. Since Sony was losing its market share in a huge scale, it became important to bring in changes in its product line. Now to change the product line it would require changes right from the bottom level workers. Sony also needed to change its technology. This meant that the workers would need to be trained in the technology. For this the managers are required to have sufficient knowledge and expertise in their relative disciplines. Hersey Blanchard’s Situational leadership theory Hersey and Blanchard formed leadership style according to the amount of task related behavior and relationship behavior that a leader provides to his followers. They classified all leadership styles into four types of behavior, which were termed as S1 to S4 (Nelson, et al, 2012, p.201) S1: Telling which is known as one-way communication in which a leader defines the duties of the individual or groups and informs them about the queries related with what to do, how to do, why to do etc. the managers at Sony can use the first strategy in introducing changes in the company. S2: Selling where even while providing direction, the manager uses a two-way communication network by providing the socio-emotional support that would allow individuals or groups to buy into the changing process. People are used to working in the same culture again and again. Introducing changes in the company culture will not be easy for the worker to work with. By extending the socio-emotional support, manager can convince workers to get accustomed to the changed scenario. S3: Participating through which shared decision-making about features of how the task should be accomplished and the leader who would less task behaviors at the same time maintaining good relationship behavior with his workers. S4: This involves delegating the leader who would be involved in decision making. The process and responsibility need to be passed on to the individual or group. The leader would be there to monitor the progress of the people. McGregor's Theory X and Theory Y Douglas McGregor in 1957 had developed a philosophical approach of humankind using his Theory X and Theory Y which is two opposing views about how people perceive human behavior at workplaces and organizational life (Schermerhorn, 2010, p.38). McGregor realized that companies and the managers who work there could follow any one of the two approaches. Theory X Theory X states that people would have an inherent hatred for work and would avoid it whenever it is possible. As Sony was lagging behind, most companies it would be possible that there can be some workers who would have a dislike towards their work. People need to be coerced with control, direction, or threatened with consequences in order to make them achieve the objectives of the organization. It is observed among people that prefer to be directed, will not want to handle responsibility, and will have little ambition. Also, people would have a tendency to seek security above every other matter. Going by the situation of the company, there are high chances that the managers face one or most of these challenges. In such conditions, the role of the manager would be to coerce the situation and exert control over his employees. The Theory Y approach of the Douglas model would not be applicable in case of Sony as the company had been facing rough times. There is high possibility of employee dissatisfaction and poor performance which is reflected in the Theory X of the model and not in Theory Y. Theory X also provides the accurate measure to deal with the problem and so we have used Theory X approach in the paper. 4. The likely sources of resistance that could occur in Sony and their solutions The CEO Of the company Howard Stringer had decided to lay off 10,000 employees worldwide and shut down 11 of its 65 production houses. This would lead to massive protests and employee grievances. Secondly, introduction of new work culture and corporate situation would not be accepted by the employees easily as Sony has long been following its conservative nature of work. There can also be situations where the existing employees go on a strike or mass protest against the management. Managers would have to deal with the situation in a very tactful manner so as not to disrupt the company harmony. The manager would firstly have to develop a two way conversation with the employees addressing their queries and grievances. The manager would have to ensure that no action or word is spoken that would hurt the sentiment of the workers who lost their jobs. He would have to provide them with the assurance that their jobs would be restored. Different grievance redress forums will have to be formed by the manager where the grievances of the employees would be heard (Classification grievance procedure, 2010). The prime motto of the grievance redress procedure would be to promote practices and methods which would make sure the creation and sustenance of a healthy employer-employee relationship, an expeditious settlement for genuine grievances of the employees and officers so as to elevate satisfaction levels in the job that would result in improved productivity and efficiency for the company. A dissatisfied employee or officer can submit his grievance to a designated officer in-charge present in the Grievance Cell at the Corporate Office of the company that would be mentioned in the assigned Grievance Format. The Officer in-charge of the Grievance Cell at the Corporate Office would address the grievances wherever it would be possible to do it at his level and inform the aggrieved employee or the officer regarding the decision either directly or through any Terminal Manager where the grievance would be routed though him, within 15 days of the receipt of the grievance (Classification grievance procedure, 2010). Besides, this, it may result in strengthening the team spirit among all the members to perform in concert which is necessary to achieve the goals of the organization. The manager would also have to issue warning to the existing employees not to create confusions, false allegations and actions against the company. Resistances can also be faced when the workers would deny working in the changed situations. They may find it difficult to adjust or learn the new methods. The manager in this case would have to convince the worker and employees that these are introduced for the betterment of the company which would help them in their growth too. There can be resistance from the local government and bodies against the closing of its 11plants which employed many workers. The manager would need to address each of them making it clear that the decision of the management is to head towards prosperity and the units shut down were running in loss. He would have to ensure that the jobless workers don opt go unsatisfied which would provoke him to talk ill about the company. Apart from the employees there can also be situations where the company can face resistances from its stakeholders. The stakeholders may withdraw their claim over the company or issue legal notices to the company. They also disrupt the company from venturing into any new plan. In order to achieve the above tasks, it is very important that the manager has the leadership qualities needed to lead and control a team. He manager would help himself and others to identify and discuss about the issues that are at the core of resistance. He would have to understand what is in his control to modify or change and what actions he needs to take. Regarding the stakeholders the manager would have to instill faith in them about the company. The manger would have to convince the stakeholders not to withdraw their money and not resort to any legal action. He would have to convince them of the rough situation the company is in. the manager would have to convince them of the new changes that he plans to introduce in the company and confirm company progress to them. The manager can also organize social events and gatherings to rebuild the trust of the stakeholders, the employees and also the consumers. References 1. BRAVIA™ HD TV (LED & LCD), (2012), available at < http://www.sony.co.in/productcategory/bravia-lcd-tv > (accessed on August 14, 2012) 2. Howard Stringer: Turning Sony Around, (2003), available at < http://www.ibscdc.org/Case_Studies/Leadership/Leadership,%20Organizational%20Change%20and%20CEOs/Turning%20Sony%20Around-Case.htm > (accessed on August 14, 2012) 3. Hamilton, C. (2010). Communicating for Results: A Guide for Business and the Professions, Wadsworth Publishing 4. Kinicki. (1999). Organizational Behavior 3E, ICDC Publishing 5. Nelson, D. et al. (2012). Orgb 3, Student Edition (with Management Coursemate Printed Access Card, Cengage Learning 6. Schermerhorn, J.K.R. (2010). Management. John Wiley & Sons 7. Classification grievance procedure, (2010), available at < http://www.tbs-sct.gc.ca/gui/prog-eng.asp > (accessed on August 14, 2012) 8. The rise and fall of Sony, 2012), available at , (accessed on August 14, 2012) Read More