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Managing Strategic Change Sony Corporation Assignment Help
Introduction to the Sony
Managing strategic change Sony corporation assignment help is describesSony Corporation.Is one of the largest corporations of Japan, headquartered in Tokyo. The primary focus of Sony is on electronics products, gaming and financial services and is thus known for its diversified business. Till early 2000s, Sony was a hugely profitable company but during the late 2000s, it started to encounter losses due to several reasons such overall slowdown of the world economy, emergence of other competitors and natural calamities in Japan such as earthquake etc.
Mr. Howard Stringer was appointed as the new CEO of Sony in the year 2005 and was expected to revive the company and recover it from the losses. He introduced a lot of changes across the organization, which was the part of hisbusiness organizational strategy. He made changes so that Sony could now focus on its competencies to compete with other growing players in the market such as Samsung, Apple etc. For the same, he divided the organization into 5 major groups that was headed by the Sony’s Electronics division. He also introduced the latest technology in the business processes so as to reduce the complexity and resource wastage. Moreover, it helped integrating the company and improves the communication that optimized the company’s processes. He also understood that customer satisfaction through ease of use of the products was the key to success for its competitors such as Apple and hence changed its focus to customer satisfaction from technological superiority.
Strategic Change at Sony
Life-cycle of an Organization
There are four stages in the life-cycle of an organization. These four stages are Introduction, Growth, Maturity and Decline.
Introduction: This is the stage when an organization starts its operations and introduces its product in the market. This is the stage when the investments are made and profits have not started to come
Growth: This is the stage when the product becomes known and regular sales started to come. The investments are recovered and the company starts making profit.
Maturity: This is the stage when the product has become standard in the market. Regular sales are flowing and the growth rate is constant since the core competencies have shown their value
Decline: This is the stage when new products and technology come into the market and hence the sales decreases. The growth rate declines and the company start to approach its end. At this stage, the company is required to bring serious modifications in its business organization structureand product line so as to adapt to the latest trends and recover from the losses.
Since, Sony has now reached its decline phase in the organizational life-cycle; it ought to make serious changes in its business organizational structure since the competitors are swiftly coming in with new product lines and technology.
Strategic Management requires an organization to keep a track of the external environment in which it is operating. Since the external environment is highly dynamic and changes during every business cycle, that change needs to be recorded and necessary changes in the strategy must be done (Claire V., 2010, pp 242).
Since Sony did not kept track of its competitors in the maturity stage and due to sudden extreme scenarios such as economic slowdown, earthquake etc., it faced an additional heat of downfall and thus had to make sudden changes in the organization. Otherwise, if Strategic Management at Sony was efficient, the changes could have taken place more smoothly.
Human Resource policies at Sony: Recent ChangesDue to intense business scenarios during recession, growing competitors etc., Sony had to make some quick and major changes in itsHuman resource policies and organizational processes. Following are some of the important changes that Sony did:
- Change in Organizational Structure: Sony changed it organizational structure and transformed it into a more flat hierarchy. Earlier it had a comparatively tall structure where there were multiple layers and hence the communication and other business process took time. Now, as a result of lesser layers in the hierarchy, the communication became efficient
- Change in Leadership style: Earlier the leadership style was Autocratic in which the decision making power was with the top management only. Other levels had the liberty to put forth their ideas but the final decision was with the top management only. Due to this, the improvisation in the company was limited. But, in the critical times, there was a need to improvise more and thus the leadership style was changed to Democratic. Now Sony was a people’s company where ideas and perceptions were valued (Guy Millar., 2012, pp 4).
- Streamlining the process: The business units were segregated and their tasks and goals were also streamlined so that each department could focus on its core competency. This also reduced thebusiness communicationand resource allocation among the groups that improved the efficiency of the business unit as a whole due to reduced complexity in the processes. All the business units were headed by Sony’s Electronic division as it was the brain of the company and every resource flow was from this unit. Therefore, the major decision making was taken through this division and thus reducing complexity
- Adoption of latest technology: To smooth the processes and improve the team work etc., latest technology was adopted as a whole by the company. This also helped them to put one step forth in competing with its competitors as all its competitors such as Samsung, Apple etc. already adapted to the latest technologies
- Team building: Sony started to incorporate many activities under their team building domain so as to improve the team performance in various departments. Due to the recent restructuring, the teams and departments had a lot of reshuffling within each other. Hence, to quickly get its employees accustomed to that change, team building activities were started so as to reduce the team conflicts and stress among the employees. This in turn helped Sony to reduced wastage of resources in Conflict Management
- Downsizing: Sony downsized its employee strength by around 10,000 in order to recover itself from the losses faced. It also lead Sony to now focus on its core competencies and revive itself
Question 2 - What are the advantages and disadvantages of the Change?
Advantages and Disadvantages of Change
Every player in the consumer electronics and gaming industry was undergoing change in its organizational structure and processes due to changing economic conditions, Sony also had to follow those changes in order to move with the flow and adapt to the present situation. Therefore, these changes that Sony made were a second order or reactionary changes since they were done as a reaction to the steps taken by its competitors.
But, the change which Sony did had both positive and negative sides to it. On one hand, those changes were expected to bring the company out of the economic turmoil but on the other hand, they were also expected to bring with themselves some negative effects. Following are the advantages and disadvantages of the changes that Sony introduced:
- Change in Organizational structure & Leadership:
Majority of the competitors of Sony i.e. Samsung, Apple had already gone for the modification in organizational structure (Apple by default had a flat hierarchy, whereas Samsung had a vertical hierarchy earlier). This modification helped them to improve the transparency in their organization. Moreover, switching to transformation leadership program helped them to improve upon their improvisation quotient and hence at the time of crisis, new products development came in handy and companies like Samsung and Apple captured the market by their attractive product line
Moreover, when initial surveys for the transformation were carried out, it clearly showed the dissatisfaction of employees with the present scenario of the company and the structure of the organization
- A higher level of transparency in the company and hence a better decision making process
- Improved information flow and communication
- Increase improvisation and thus lot of new ideas by the employees that lead to generation of new products ideas
- Higher level of employee satisfaction as now they were more connected to the company since their ideas were given due importance. This improved their efficiency and thus leading to higher profits
- The major disadvantages were faced with the top management. Since there was a decentralization of powers, the power and authority with the top management reduced that lead to their dissatisfaction. Thus, the increased insecurity was one of the disadvantage
- Process Streamlining
Since due to economic slowdown and other reasons, profits of all the companies surged. This made them rethink about their organizational processes. So as to reduce the cost of process handling and minimize the wastage, companies thought of streamlining their process (Donald., 2003, pp 184).
- Process streamlining lead the human resource department to put forth much better goals that were more specific, measurable, attainable, realistic and time bound
- Now the employee expectation can be understood more well and the intentions of the organization could be matched with them easily
- Due to a better mapping between expectations and intentions, there was a higher level of trust and therefore higher loyalty
- There will be an increased workload with the human resource department, which some of them may resist
- For this to work out, employees might have to be more open with the management and some employees might not be comfortable with it
- Team Building
At this point of time, team work and employee efficiency was the best resource for any organization since they could not let their intellectual capital drain along with all the profits that the companies were losing (McBain., 2007, pp 16).
- Employees developed a greater bonding with each other and thus more efficient team work
- There were reduced conflicts and thus lesser wastage of resources
- Reduction in communication gaps and thus higher productivity
- Higher work for thehuman resource department
- Initial exercises could lead to higher conflicts in teams
Due to reduced profits, organizations had to cut down their size of organization so as to reduce the expenses and focus on their core competencies
- Lowering of expenses and thus higher disposable income for core competencies
- Employees giving more input so as to reduce their chances of getting laid off
- Might lead to employee demotivation that may affect their efficiency and output
Change in Organizational Culture: Concepts and Realities
Organizational culture comprises of 7 basic elements as described by Gerry Johnson in his ‘cultural web’ model (H. Frank., 2013, pp 62). These 7 elements form the core of any organization and therefore any change in even one of the four elements causes disorientation in the entire organization. Though change in organizational culture is realistic for any manager; however it must be done through proper planning, which is the case with Sony as well (since it brought about significant changes in its organizational culture by changing the organizational structure, leadershipor power control, etc).
Kotter’s 8 Step Change Model
change. Following are the aspects on which the model focuses:
- Creating a climate for change:Creating an environment of urgency and letting the employee know that a change might be coming in some time and to keep themselves ready
- Engaging and enabling the organization:Provide necessary resources to the employees for sustaining that change. Moreover creating short-term and long-term goals to relate to them
- Sustaining the change:Last step is to motivate the employees and keep the flow of resources required so as to sustain the change
Stringer initially created a sense of urgency in the organization as soon as he became the CEO. He closed 11 of Sony’s plants and laid off 10,000 employees to create the sense of urgency. Now he was ready to move in to bring the change. He focussed on the core competencies and reduced the structural hierarchy and changed the leadership style. This made the overall business process speedy and thus saved immense resources.
He also changed the focus to customer satisfaction considering the latest industry trends and thus deciding upon its product line. Thus, he brought the changed in an effective manner. Thus, he was successful in gaining the market share from its rivals and targeted a profit margin of 5% by the end of 2007. This helped him to motivate the employees and keep their trust and loyalty with the company (Dawn-Marie., 2011, pp 64).
Question 4- Think of a change situation within your organization. What were the sources of resistance? How did the management try to combat them?
Sources of Resistance to Change
It is true that change is inevitable. But still it is difficult to accept and manage. Since the employees are used to the regular style of working, any change is uncomfortable to accept initially and there are some barriers attached with it. Some of them are:
- Environmental Barriers: Some of the environmental blocks arise when there is lack of support from the top management, the managers are not supportive enough to give time for accepting the change
- Cultural Barriers: Some changes are considered taboo under some perception and thus might arise as a barrier for some employees. If the change requires to digress from a certain tradition, that becomes a barrier for change
- Emotional Barriers: The inability to take a risk during the change is a barrier. Since changes are never nice in the beginning, keeping a positive perception regarding it is difficult and that is also a barrier to change
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Combating with changes
A Five change approach can be followed to deal with the barriers to changes:
- Educating the employees regarding the change: The employees must be motivated to accept the change. This can happen only if they feel that the change will be good for them. Hence, positive nature of the changes are to addressed to the employees to motivate them
- Motivating them to take part in decision making process so that they feel that the change has improved their value in the organization
- Management support must be increased so that the employees not feel left out and get demotivated
- Negotiating with the employees if needed to remove certain negative and unethical barriers to change
- Use of coercion by managers in order to bring the change if there is too less time for the employees to get used to it due to critical business plan
Change has to follow some inevitable phases and a right path to be accepted by the employees. A right structure to bring in the change makes it more effective and efficient for the employees to accept it and work upon it. Sony needed to bring some critical and drastic changes and thus the time for employees to accept it was too less. Therefore, Sony had to do the job of sustaining the change in a better way.
Hence, at this point of time when the company has overcome the downturn and recover their losses, there is a need to sustain those changes for the employees to master them till the next business cycle. For that, the top management has been more supportive and provide the employees with proper resources to get used to those changes. Thus, implementing various change management models and team building and conflict resolution models would help them to smoothly transition through this refreezing phase. Moreover, Sony has to recreate their trust in the hearts of its employees since during restructuring; it had to lay off around 10,000 of its employees, which surely have created a sense of insecurity in the minds of the existing employees.