Multinational Culture and Development of a Dominant Market Player - Essay Example

Multinational Culture and Development of a Dominant Market Player Almost as a rule, when a company begins to experience a degree of success and expands its offerings into further sectors within the domestic and international economies, the firm itself is unaware and unprepared for many of the eventualities that await it within the international marketplace. Due to the fact that success is such a non-uniform process and can be arrived upon by a multitude of different firms in a multitude of different ways, there is not tried and true method of following something akin to a checklist of steps to ensure that key hurdles within the growth and development of the firm will assuredly be cleared. Rather, the process is much more akin to a learning curve through which each and every organization/firm/company must contend. Due to this non-uniformity, each and every firm experiences different levels of success with their attempts to make the difficult transition from that of a successful firm to that of a fledgling multinational. However, it can be argued that if there were such a thing as a single determinant that expressly assured a degree of multinational success it would be those companies that retain a healthy and vibrant culture that pervades every sector of their company and product/service offerings (Lashinsky 2005, p. 80). Such a statement will of course be corroborated within this analysis; however, even cursory examinations of a litany of multinational corporations that have succeeded share this common denominator towards eventual success. As such, this brief analysis will specifically consider the case of Sony with respect to the ways in which the factors of environment, organization, structure, technology, product life cycle, and last but not least company culture, proved to be the powerful motivating factors that guaranteed the survival and profitability of the brand from its inception until the current time. Moreover, the degree to which Sony focuses its energies on innovation and product development/change will also be discussed. Finally, a thorough examination of the ways in which company culture serve as a type of feedback loop into the items that have previously been listed, compounding, reinforcing, and encouraging the firm to even higher exemplifications of business success will be discussed and analyzed. As a means of guiding the discussion and focusing the responses which will be given, Richard Gershin and Tsutomu Kanayama’s piece entitled: “The Sony Corporation: A Case Study in Transnational Media Management” will be extensively used to draw uniform parallels and inference onto the key ways and manners by which the Sony brand has sought to organize, develop, and differentiate itself over the 60 years that it has been in business. Perhaps the most unwelcome and inhospitable climate and/or environment in which to begin a high tech manufacturing industry is in a nation that has only recently ceased hostilities in a world war that left millions dead and two of its own domestic cities targeted by nuclear weapons. Nevertheless, this was very much the scene that greeted Ibuka and Morita as they officially incorporated what would eventually become known as Sony in Tokyo in the spring of 1946 (Gruley et al 2011, p. 75). So abysmal were the working conditions and the lack of capital to fund their research and development that the pair began the venture with a net capital investment of less than 500 USD (Gruley et al 2011, p. 76). Moreover, the state of the building that the duo initially established the firm in was so horrendous that it had damaged windows as a result of Allied bombing during the Second World War and a plethora of cracks and foundational flaws that exhibited themselves within the walls and floor. However, the austere and somewhat depressing start did not prove to be a detriment to the early team as they began to set about finding a niche into which they could thrive and grow the fledgling startup. Though it may seem as something unremarkable to the current observer, Sony was unique in the fact that it sought out those opportunities which other manufacturers had passed up on. Rather than being content to market inferior products due to the fact that they saw no need to manufacture something better for lack of competition, Sony sought to analyze the market at nearly every juncture in time and be presciently aware of what gaps in quality, technology, and need existed within it. Another negative factor that the Sony Corporation was faced within upon entry and growth within the market was the uphill battle it had to face with regards to public perception. Although it may seem odd to the casual observer today, Japanese goods near the end of the Second World War bore a highly negative connotation that was associated with poor quality. Whereas today brands such as Sony, Toyota, Honda, and a litany of others help to make Japanese goods highly desirable and sought after due to superior engineering and quality, such was most certainly not the perception of the consumer in the late 1940’s and onwards. To combat this perception, and to some extent this reality, Sony dispatched groups of researchers to the United States in order to research and comprehend the means by which quality control processes and production was taking place in the United States. This recognition of what was missing and what could stand to be improved upon has been a hallmark of the firm and ties directly back to the company’s culture (Wakabayashi et al 2009, p. 2). As such, the culture of Sony will be discussed at greater depth later in this piece; however, suffice it to say that the drive to incorporate best practices of others and not to be ensconced in a rigid and intractable culture is one of the primary reasons that the brand has been able to grow and experience the level of success that it currently does. With regards to the organizational structure, Sony has developed in a somewhat uniform manner. Large corporate headquarters in Japan integrate closely with smaller regional offices in the main markets that the firm is currently active within. Again, discussing the structure of the firm and how it is organized is impossible to engage without making allusions again to the means by which a strong and pervasive sense of company culture helps to bind each of these disparate entities together to create a larger whole (Siklos 2009, p. 70). However, the more important story with regards to the way in which the firm is organized is the way that the fluid and open minded nature of leadership has defied, much to its benefit, the traditional mores and/or norms of Japanese management style. Whereas the purpose of this piece is not to draw a level of judgment onto cultural practices and place one above the other, it should be noted that a very regimented style of respect and deference typically exists within traditional Japanese companies; specifically with relation to the way that certain individuals and/or employees are allowed to or not allowed to interact with those in positions of upper management/decision makers (Wakabayashi et al 2009, p. 1). Such an approach necessarily constricts the level to which the free flow of ideas and development could take place. However, as is the case with Sony, the leadership has always prided itself in seeking out those individuals within and without of the firm that can have a valuable level of input. Such was exhibited in the reading when a music student, Norio Ohga, wrote to Sony a series of detailed letters expressing discontent with the way in which their music recorders captured the true quality and tone of the sounds he was utilizing them for (Kane 2008, p. 4). Rather than dismissing these letters or simply seeking to satisfy the customer by offering some type of free goods, the leadership invited Norio to their headquarters and listened intently to what he had to say. Such an approach allowed leadership to see the opportunities for improvement that their brand could benefit from as well as to recognize the clear and undeniable talent that Nio himself could potentially bring to the firm. As such, the changes were instituted and Norio himself was hired and put over one of the project designed the improve tonality capture of the recording devices (Gibney 1997, p. 20). This story in and of itself, although but an anecdote, is indicative of the means by which Sony was and continues to be open to change and willing to listen and consider the views of their customers. Moreover, it appropriately displays a firm in which even though traditionally Japanese, is not bound by the constraints of a rigid culture to insist that only certain key individuals can have access to the leadership of the firm (Schlender 2000, p. 145). By opening up the communication process and allowing for a free flowing discourse of potential between shareholders on nearly every level, Sony virtually guaranteed its continued survival even through economically challenging times and times in which research and development overruns threatened the viability of other product lines and the firm at large. In what has become somewhat emblematic of Japanese technology and industry, Sony’s design structure was, and to a large extent continues to be, based not solely upon development of entirely new product offerings but rather on a focus upon improvement and/or perfection of given item (Johnson 2007, p. 36). Examples of this type of design aspect can of course be seen in the following devices that Sony has pioneered, albeit not invented: Triton/Chromoton TV sets, Walkman, Playstation, Sony Vaio, and a host of others. Although Sony did not invent the TV, the gaming platform, the computer, or the radio, the company was able to gain a great deal of success by analyzing the market, noting key weaknesses within current offerings and allowing their prestigious research and development branches to seek to engineer a superior offering to the consumer (Collins et al 1996, p. 76). Whereas Sony could have contented itself by saying that IBM Hewlett Packard and others had a dominant force within personal computing, Nintendo and Sega in video gaming technology, and others in the realm of audio technology, it instead chose to incorporate existing design and function and create a superior device through heavy investment into research and development and a healthy concern for ways in which key shareholders within the company saw a future opportunity for revenue generation (Fonda et al 2006, p. 5). By means of this approach, Sony, as well as many other Japanese brands, were able to slowly but surely shed the misidentification and labels that had earlier defined the “made in Japan” label and seek to create a type of international brand loyalty which to a large part continues to this day (Jan Vardaman 2009, p. 19). The ability of the Sony brand to continue to experience such a high degree of success can mostly be attributed to a culture that praises innovation and development on prior less than stellar results. Furthermore, in order for such a model to work effectively, it is necessary for the firm to have a rather fluid process of idea transference and sharing (Beamish 2000, p. 80). As discussed, the culture of Sony as it exists currently and as it has been formulated over the years of its rise and development feeds into this process by allowing key contributors and shareholders the freedom to engage within the process, speak directly to management, and continually seek to redefine and refocus the energies of the firm in ways that would support an active and energetic development sector. Rather than needing to work against an entrenched culture steeped in ritual and hierarchy, Sony actively realizes that the viability of the firm is entirely dependent not upon maintaining the few cash cows that the firm has but seeking to differentiate the product offerings and refocus the energies of their research and development components (Edwards et al 2005, p. 38). This culture of research and development is the grease which keeps the Sony Corporation in operation. As compared to their competition, Sony far and away spends a higher portion of overall funding on research and development. In realizing that their most profitable product lines have come not from an executive committee but from the individual musings of one of their researchers or associated staff members, Sony is able to maintain an organizational structure that places the ultimate focus and resources on research and development (Beamish 1999, p. 14). Accomplishing maintaining a powerful centralized organizational structure while at the same time seeking to reduce organizational constraints to the free flow of information, developing further multinational needs, and encouraging the expression of ideas and research and development from their respective departments is doubtless a balancing act; yet, it is a balancing act that the culture of Sony, along with its founder and subsequent leadership, have been keen on promoting. As a means of ensuring that the spirit of innovation and research remains strong within the corporation, Sony has recently undergone what many have termed a type of reorganization (Higgins et al 2006, p. 409). However, rather than being what the traditional sense of the word implies with divisions being moved under new leadership, sections being eliminated and all of the other negative connotations that the word necessarily bears, the reorganization that Sony underwent would perhaps better be defined as a type of refocusing of the company’s creative energies. As a function of the fact that the firm has been in existence for over 60 years and dabbled in a litany of different consumer products ranging from kitchen appliances to home theater and personal electronics, the product offerings had become so diverse that the firm was at risk of losing some semblance of its key focus and core mission areas (Dvorak 2003, p. 35). As a way to ameliorate this risk while at the same time not cutting any of the products or research into existing lines, the company sought to refocus the energies of the company for the future on the 5 pillars that it saw as the most promising product lines that the company could hope to benefit from (Gunther 2001, p. 106). As has been seen from the information that has been presented on the Sony Corporation, a type of synergy strongly exists from the top levels of management/leadership to the bottom layers of both research and design engineers and concerned shareholders. As a function of this open-minded culture and ability to react to and serve the needs of emerging markets, the business model and operations of Sony Corporation have seen it continue to be a powerful market force within the field of consumer electronics. Doubtless, if it were not for the way in which the firm actively seeks to engage its employees at nearly every level and actively create an open environment to idea generation and sharing, it is doubtless that the same corrupting and degenerative cultural influences that affect many well established firms would have crept in and diminished the ability of leadership to allow the lower levels of the company to continue to have a voice in product generation and idea creation (Brenner et al 2005, p. 30). In this way, the Sony Corporation can be definitively viewed as a type of success model for how a firm can transition from a small domestic supplier of consumer devices to a large top multinational player without sacrificing the culture of the firm that allowed it to enjoy such a very high degree of prosperity in the first place. 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