Vol. Each aspects have different manager to manage the progress. 38, no. Organisational restructuring and investment strategies were among the solutions in coping with technological changes. It helped accelerate the structural reform of the electronics business of Sony on top of the creation of synergy as a result of the merger. The cost-benefit consideration was not given much thought before the outsourcing was done. Available from: http://www.sony.net/SonyInfo/News/Press_Archive/200010/00-1018E/ [Accessed 4 January 2011]. 35-47. Due to the external environment effect such as the Asian financial crisis, the ever increasing competition, as well as the internal business issues like the low efficiency, the profits of Sony has been reduced dramatically since 1998. The following are the responses made by the company alongside with its underlying rationale: Investments: Sony invested heavily in R&D, capital equipment and facilities in order to meet demands and improve profitability. Sony music entertainment is the world 2nd largest music record company. [Accessed 30 November 2010]. Available from: Business Source Complete. Vol. Graph 6 Source: www.HYPERLINK “http://www.sony.net/”Sony.net, Press Archive, March 29, 1999. The takeover became part of Transformation 60. Sony is shaking up its management structure for its PlayStation business, a move that signals increased emphasis on the company’s PlayStation Network. We're here to answer any questions you have about our services. The newly announced Sony A1 camera features a brand new 50MP Stacked BSI CMOS sensor and an ISO range from 100 - 32000 and an expandable ISO range up to 50 - 102400. This means that employees are grouped by function within individual projects, allowing each project team to … On the other hand, Sony has announced that a new organizational structure called ” One Sony” is being formed. Sony (2001a) Press Releases: A New Group Structure for the Next Stage of Integrated, Decentralized Management–Transforming Sony into a “Personal Broadband Network Solutions Company”. Ok, Sony has done it now. Retrieved from. The constructed financial holding company absorbed Sony Life Insurance Company Ltd, Sony Assurance Inc. and Sony Bank Inc. By these convergences, Sony clarified the operational structure and concentrated on the engineering, innovation and financial resources. Matrix Structure . The Sony Alpha 1. Vol. Below are among the steps taken by Sony to beat the competition in the market: Partnership with Solectron Corporation in year 2000 and off-shoring to China were to aid the outsourcing process of production of electronics was a step to help the company meet fluctuations in demands, cost reduction, quality improvisation and customer satisfaction (Sony, 2003; Sony, 2000). Those segments can be included into this category, which operates in low sales growth industry and have high market share. … 1, pp. Smart phone industry is growing each year but unfortunately, Sony product line of smart phone manufactured under the brand name of Xperia lagged behind in competition. The product-based organizational model also enables businesses to operate with more flexibility, as each business division can follow the unique processes they need for each product without having to accommodate processes for the other divisions.This can enable the company to shorten their development and manufacturing cycles and bring products to market faster to beat the competition. Azumi & Mcmillan (1975) found that both the U.S. and Japanese culture are quite highly centralized and company’s rules and procedures are abided. Free resources to assist you with your university studies! We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. The constant improvements in technology have caused the company to respond to the demand of the market. If you’ve had a job, you likely worked in a functional organizational structure.The functional structure is based on an organization being divided up into smaller groups with specific tasks or roles. Therefore, the restructuring was necessary for Sony to survive in the competitive market. Sony A1 Press Release, Full Specification and Price Sony finally announced the new flagship FF Mirrorless camera. Sony (2002) Press Releases: Accelerating structural reform of the Sony group’s electronics business [online]. Schwartz and Thompson (1986) suggested that the divisionalization form can facilitate the various divisions to compete fiercely among them, with effective operations to face rapid changes in external environment. The entertainment business saw the joint of assets of pictures, music, game, electronics and services to enhance its position as a worldwide media company. 21, no. The matrix organizational structure is a mix of two other organizational structures, the project system, and the functional system. For any company product is a very essential element. Although it is less dispersed than the structure in 1999, the pull to formalize by the technostructure of Sony could be seen in Transformation 60 (Mintzberg, 1981). With it’s 50 megapixels. The business operates in over 200 countries and covers the games, electronics, financial services, entertainment markets and others (ibid.). The group announced the organisation’s restructure plan in March 1999 to seize further growth opportunities in the new century and the Internet era (Sony, 1999). This framework is the four quadrant graph each quadrant represent different category of segment, according to its market share and industry growth rate. Headquarter of the company is located in Tokyo, japan. It is also the most confusing and the least used. Sony is one of the leading company in electronic industry. The Sales figure remained in the reasonably floating level before 2007. Sony as a world class player in a diversified high-tech market was challenged with the fierce competition during the late 1990s (Sony, 1999). Organisational Culture and Leadership 3rd editions, John Wiley & Sons, Inc. Schmidt, T. (2006) A review of Structure in Fives: Designing Effective Organizations. Schein, E. H. (2004). 6, pp. Hence, in U.S., risk-taking is very much observed. 197-220. Sony entertainment have produced many famous movies like, karate kid, spider man and men in black 3. [Accessed 23 December 2010], Lynch, R. (2006). The structure of Sony in 1999 displayed Sony’s trend to be decentralization to distribute the power yield. Copyright © 2003 - 2021 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. Those segments are included into the category of Dogs, which operates in low sales growth industry and have low relative market share. Question Mark is one category of segments amongst the four in BCG framework, which includes, those segments which have low relative market share and operates in high sales growth industry. Sony, a world class consumer electronics makers, was facing serious concerns since the late of 1990s, such as Asian financial crisis in 1997, the tech bubble and the terrorist attacks in America in 2001. The tactical and strategic plans were permitted to each sectors, which points that the divisionalized form still existed. (2010) Management and Organisational Behavior, 9th edition, Harlow: Pearson Education Limited, Purse, K (2009) ‘Outsourcing myths and workers’ compensation claims administration’, The Australian Journal of Public Administration Vol. Sony is large and decentralized, with divisions and groups that are sometimes described as independent fiefdoms. Sony’s mobile business is now small enough to not be losing money. 2, pp. It was the drop in profits that led investors to force the overhauling of top management, as a result, the “unified dispersed” model and Transformation 60. BCG matrix is developed by Boston based private consulting firm, for the conglomerates like Sony which comprises of diversify divisions or segments. In this Value Creation Model, the “unified dispersed” management method saw changes in the electronics operations, establishment of Digital Network Solutions (DNS), changes in composition of workforce which could ultimately affect the morale of employees, implementation of new value-based performance measurement system and the separation of headquarters into two distinct functions (Ravi, 2005; Sony, 1999). In this diverse environment, different structures will be taken in specific department to meet different aspects of situation for Sony. The electronic business consists of various subsidiaries (Graph 6). Since these authorities flow downward and sideways, this structure is called a matrix organization structure.Employees may report to many managers in a matrix orga… Vol. The structure of the organisation is determined by its age and size, technical system, power and environment (Mintzberg, 1979). Just when you thought it was OK to go back and take photos again Sony goes and releases a new super camera, the Sony Alpha 1. Sony is known for its superior quality and service. In light of the situation above, the new team led by Stringer with the probable change in organisational culture could probably help turn things around. 5, no. Corporate Strategy, 4th edition, Harlow: Financial Times Prentice Hall, Mintzberg, H. (1979). Firstly its name was Tokyo Tsushin Kogyo Kabushiki Kisha which means Tokyo Telecommunications Engineering Corporation but later on its name changed to Sony Kabushiki Keisha … As directed by the Board of Directors of Sony Corporation, this report will analyse the company’s situation from 1999-2005. Consequently, Sony had to accelerate the reform plan and announced another restructuring plan called “Transformation 60” in 2003. Sony today introduced the Alpha 1, the new flagship camera of its full-frame mirrorless system. Available from: http://www.sony.net/SonyInfo/News/Press/200503/05-014E/index.html [Accessed 16 January 2011]. Outsourcing may be beneficial to the company as a whole but it could ultimately decrease the motivational level of employees, as there is a tendency of decrease of power of managers, and failure rate is between 40%-70% (Purse, 2009). To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! Sony entered a joint venture with Sharp to produce and sell large-sized LCD panels and modules. If you need assistance with writing your essay, our professional essay writing service is here to help! In console games PlayStation brand has highest market share therefore, game and network segment of Sony can also be included into the category of stars. Strategy and organisation structure are correlated to each other, even the debate of whether strategy or structure comes first is still in existence (Lynch, 2006). For example, Sony set up a “unified dispersed” management model which facilitates more functional and operational autonomy (Ravi, 2005). 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