Menu

Organizational Behavior and HR in Sony Corporation

0 Comment

102500 Kalyanaram and Gurumurthy (2008) offer that businesses that are the first to market in certain industries have a significant competitive advantage over competitors. Theory indicates that when buyers perceive a satisfactory product or achievement of effective customer service, risk averse customers often develop attachments to the pioneering product or brand. therefore they are unwilling to switch to new late movers’ products. Oftentimes, these buyers assess the late entrant against the first mover with adverse assessments in favour of the pioneer (Kalyanaram and Gurumurthy 2008). Sony was not able to launch innovative products (such as the LCD television) before competition, therefore the market had established brands with positive consumer sentiment about the brands that is difficult to undo for a late mover. The presence of competitive product offerings and new innovative products is what served as the first catalyst for change at the firm that required restructuring to meet and adapt to market needs more rapidly. Slocum and Lei (2005) reinforce the dangers of increased globalisation that make change a constant phenomenon, especially for businesses that operate in multiple business divisions and product categories, such as the conglomerate Sony. Industries are defined in theory as “ecosystems through which businesses compete for customers and are significantly inter-dependent based on changes in local or international markets” (Slocum and Lei 2005, p.35). Globalisation opens new markets for new competitive entrants into a market, breaking down the political barriers or improving supply networks that facilitate more rapid and cost-effective production with competition. Sony was witnessing many new market entrants offering unique products that were gaining attention and recognition from important revenue-building markets, essentially shortening the product life cycle of many of its previously-profitable products such as the PlayStation gaming console and older cathode ray tube television sets. Sony was now facing competition that sustained the resources and talents needed to produce innovative products. This challenge of competitive innovations was built through increased globalisation, thus Sony could no longer sustain the growth of existing Sony products, forcing the business to be more adaptable and flexible in providing similar competitive products. Consumer markets were favouring competitive products which continued to erode market share from Sony, making change driven by competitive product introductions forcing the need for continuous change practices to be developed in order to remain relevant in its technology markets. As market circumstances continue to evolve, contingency theory states that the organisation’s internal structure must adapt in order to remain competitively relevant (Buchanan and Huczynski 2010). It was not until the new CEO Howard Stringer joined Sony that the business became aware that continuous change in the external market was causing a need for rapid internal restructuring in order to adapt properly to market conditions and more prevalent competitive practices in manufacturing and marketing. Sony relied heavily on its electronics division to generate profitability, therefore the business was forced to centralise decision-making so that the electronics division maintained authority over key areas of business. The business could no longer respond quickly enough to meet competitive actions in the market,