Sony: Organizational Structure, Leadership, and Decision-Making

This report analyzes Sony's organizational structure, leadership, and decision-making processes. It begins by outlining Sony's organizational purpose and structure, specifically the divisional structure, along with its advantages (clear chain of authority and clear vision of advancement) and disadvantages (lack of flexibility and unity). The report then discusses the reasons behind Sony's record profit, identifying management and product team distance, lack of risk-taking, and cost awareness as key issues. It highlights the lesson of creating a healthier working environment between management and production units. The report examines the structured and unstructured problems Sony faced, the most inappropriate decision-making style, and applies the rational decision process to Sony's turnaround. Finally, it identifies two crucial leadership qualities of Sony's President & CEO: a visionary critic and a disciplined leader, and how they helped transform the organization.

Organizations in Global Context - SONY
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Author Note

Q1. Organizational Purpose:
Sony is a Japanese multinational corporation which focuses on various business
products like electronics, gaming, and entertainment as well as financial services. Sony also
possesses the most significant music entertainment industry and the most extensive video
gaming console and publishing business in the world (https://www.sony.net/). The company
started in 1946 as an electronics shop in a departmental store of Tokyo named as Tokyo
Telecommunications Engineering Corporation. They made first take recorder in Japan,
named as Type-G. The company formed by two people, an engineer, called Masaru Ibuka
and his co-worker, a physicist, Akio Morita. They started the company with an investment
capital of $1600 and 20 employees to repair electronic equipment in the initial stages. Over
time, the small company becomes one of the largest electronic organization in Japan.
However, the sole purpose of Sony remains the same from the beginning, to make people
feel, laugh, inspire, excite, amaze, curious, and empower them with their technological
advancements. Like other business organizations, Sony also follows the principle of creating
a sustainable and developing culture in their organization. The organizational structure of
Sony evolves in a way to accommodate to a corporate structure, to determine and sort out all
the functions provided by their organizational members. Therefore, planning and creating
new business strategies can help to create a robust working culture and ensures the impacts
on the environment become very less.
Q2. Organizational Structure:
a. What form of organizational structure has Sony adopted?
Sony adopted Divisional structural form in its business organization. Hence, the
organizational functions are divided within its own division. Therefore, each division

possesses the necessary resources and functions that are needed to support the production
line and the management board as well.
b. Explain 2 advantages and 2 disadvantages of this structure for Sony.
Large organizations like Sony implemented Divisional organization structure to
operate and achieve the organizational goals. The Divisional Organization structure helps
Sony to organize and execute the authorization of decision making to the respective
divisions of the organization. Henceforth, this structure has some advantages and
disadvantages; they are as follows –
Advantages:
Clear Chain of Authority – Divisional structure helps to establish a transparent and
sustainable authority for the working culture in the departments (Falk & Kello, 2017).
Therefore, managers in their respective fields are authorized according to their level
and possess the power to allocate the resources, reward, and give orders to the
subordinate employees.
Clear Vision of Advancement – The divisional structure offers evident and
transparent advancement in careers. The respective field may not be secure. However,
the fabric provides a constant flow in the replacement of superiors (Low, 2018).
Disadvantages:
Lack of Flexibility – Divisional Structure tends to adapt with changes very slowly.
That may result in finding difficulties with adapting to the new market changes or
technological advancements (Falk & Kello, 2017).

Lack of Unity – According to the organizational theories, this structure helps to build
and achieve goals as a team. Whereas, this helps to benefit the unit only, rather than
focussing on organizational development.
Q3.
a. Give 2 reasons why Sony set for “a record profit”?
According to this article, Sony shattered in making its market progress three years
ago. Therefore, the company looked like it will doom due to the irrelevant marketing
strategies. However, the management was willing to make resurrection their business
of taking the largest market share in coming times. The management board discovered
the main two reasons affecting this organization are the management and product
teams oriented distance and lack of risk taking willingness and awareness of
maintaining costs (fortune.com, 2018). Sony decided to step over these barriers and
make a robust growth for making a giant gallop in its market position.
b. What specific lesson in organizational culture could be learnt from Sony’s
“resurrection”? And in what way did it help Sony?
The incident rolls out a specific lesson regarding organizational culture is to make and
create a healthier working environment between the management and production unit
of an organization. Therefore, they can work and sort out the problems together and
make a more robust initiative.
That resulted in 2016, where Sony expected to cross a 6.5 fold expansion regarding
the net market share at the end of the year. In the year-end, the company holds a share
of 480 billion yen, which is around $4.54 billion (Sugihara & Utsumi, 2019).
Q4. Was Sony facing a structured or unstructured problem? Give 2 reasons.

Sony was facing structural problems related to Divisional organizational structure.
There were several problem regarding the management and organizational strategies of the
organization. One of them is the lack of participation between the management and
production teams. Another one is, President and CEO Kazuo Hirai was unable take effective
decisions to recover Sony from the devastating structural problems. (Sugihara & Utsumi,
2019).
Q5. Give an example of structured problem in Sony’s Workplace.
The major structural problem Sony was facing in 2016 was related to lack of harmony
in between management and workers. Then-President and CEO of Sony, Kazuo Hirai was
supposed to evoke a sense of liveliness in the subordinates to make and feel them closer to
develop and enhance the organizational culture of the company. He fails to do that, instead.
Q6. What kind of decision-making style do you think would be least appropriate for the
situation Sony was in as reported in the article?
The decision-making style of Kazuo Hirai, the former CEO of Sony was the least
appropriate regarding the situation Sony was experiencing. His decision-making style was of
conceptual based. Hence, according to the situation the organization was going through,
conceptual based leadership decision is least appropriate. However, the President was more
concerned with the long termed results that will be beneficial for the organization in the
future, rather than focussing on the undeveloped factors that needs to be revised as soon as
possible. Therefore, according to the article, the least important decision making style would
be conceptual decision making style.
Q7. Apply the first 5 steps in the Rational Decision Process with elaboration for each
step in the context of Sony’s resurrection.

In this context, the 5 steps of Rational Decision Process will be elaborated, they are as
follows –
Identify problem: The main problem of Sony is the devastating fall in the market due to the
lack of participation among the respective organizational bodies. The distance between
management and production team affected the company most.
Gather Information about the problem: The problem was much deeply rooted in the
organization. The cause of it was related to the lack of encouragement in between the main
organs of an organization the management and production teams.
Choose the best decision process: The decision was to change the organizational culture, as
well as changing the head of the organizational structure. Hence, in 2016 the position of
President and CEO of Sony was assigned to Kenichiro Yoshida (fortune.com, 2018).
Develop options: Kenichiro Yoshida took some serious steps in order to generate and
enhance the organizational progress by making the production unit to work for new
innovations as well as considering the budget must be the same as before (sony.net, 2018).
Decide the best option: The decision of reducing the barriers between management and
production enhanced the ways of organizational culture, helped them to work side by side, in
the process of making progress, and in course of time the strategy went fruitful.
Q8. Identify 2 important leadership qualities of Sony President & CEO that were
necessary for him to transform the organization.
Kenichiro Yoshida, leading the position of CEO of Sony Corporation from April,
2018. After leading as a CFO and bringing financial discipline in the company the

management decided him to be leader of the organization. Here are some key aspects of his
qualities as a leader –
A Visionary Critic – Yoshida as a leader criticized all the malfunctioned strategies taken in
the business progress and taken all the necessary steps to make a systematic and sustainable
relation in between finance and invention. He spent most of his professional years inside the
core electronics’ operations of Sony. Therefore, he knows the company inside out. That
resulted him to be more effective as a leader (Low, 2018).
A Disciplined Leader – He as a leader likes to follow disciplinary movement among the
subordinates. Therefore, after becoming CEO he revised all of the faults and red spots of the
organizational structure and reconstructed them to recover the market shares and regain the
brand value of Sony.

References:
Falk, S., & Kello, C. T. (2017). Divisional organization in the temporal structure of infant-
direct speech and song. Cognition, 163, 80-86.
fortune.com. (2018). Meet Sony's New CEO Kenichiro Yoshida, the Enforcer of its
Turnaround. Fortune.
Low, K. C. P. (2018). Leadership in Japan. In Leading Successfully in Asia (pp. 193-237).
Springer, Cham.
sony.net. (2018). Sony Announces New Management Structure Kenichiro Yoshida named as
President and CEO effective April 1, 2018; Kazuo Hirai to become Chairman. Sony
Global - Sony Global Headquarters.
Sugihara, J., & Utsumi, M. (2019). How Sony saved itself, as seen from the trenches. Nikkei
Asian Review.