Sony - Can Hirai Turn the Business Around?

A good article here which analyses the strategic challenges facing Sony and its new CEO Kazou Hirai.

As we’ve reported recently on the Blog, Sony is now undertaking a significant retrenchment strategy, including the loss of over 10,000 jobs (or 6 per cent of its global workforce) over the next 12 months. That sounds a lot, although it ought to be put in some context - Nokia has made over 30,000 job losses since Stephen Elop began his retrenchment strategy!

Sony has been badly affected by external factors outside of its control, including the strength of the Yen and the disruption caused by natural disasters in Japan (earthquake) and Thailand (flooding) in 2011.

However, a broader criticism is frequently levelled at the firm suggesting that the firm’s organisational culture has been too bureaucratic in the face of rapid technological innovation by the likes of Samsung and Apple.

A fundamental strategic issue for Hirai and the Sony Board to determine is - what kind of business should Sony be in. It has diversified into a wide range of consumer industries in recent decades, including consumer electronics and media. Some have done well. others, such as television production, have incurred vast losses for several years.

A fascinating quote in the article hints at what might be a deeper malaise at the heart of Sony’s culture - complacency:

A former president of Sony claims…

“There are many employees who take advantage of the Sony brand and swagger around despite having made no contribution”