This report has been prepared towards the completion of the Organizational Behavior Case Study 1. The report is an evaluation of the organization structure implemented in Sony when Howard Stringer joined as CEO in October 2005. The transition Stringer made of Sony’s organization structure was from Transnational structural to a multidivisional structure. Hence, this transition has been analyzed in detail. In conclusion, it can be seen that the stock share value has increased during 2005-2007, which means that Howard Stringer, both externally and internally, implemented the organizational structural change to everyone’s full satisfaction. Brief information about Sony
Sony is a leading manufacturer of audio, video, communications, and information technology products for the consumer and professional markets. Its motion picture, television, computer entertainment, music and online businesses make Sony one of the most comprehensive entertainment and technology companies in the world.
Sony’s organizational change
When Howard Stringer joined as the CEO of Sony Global Japan he brought new strategies and used those strategies to restructure Sony’s organization to be in-line with these strategies. Firstly, Stringer changed Sony’s vision from: “make Sony cool again” to: “make.believe”. Then, he looked at the core competencies of the corporation and focused mainly on the games, electronics, and entertainment sector. Stringer then established a growth strategy saying, “Our target is for the Sony Group to achieve consolidated sales of over 8 trillion yen and an operating profit margin of 6% by the end of fiscal year 2007”. From the analysis on the organizational structure that Howard Stringer was trying to implement in 2005 we can see that it was clearly a multi- divisional structure (see Appendix 1).
Sony’s Multidivisional Organizational Structure
Sony’s multi-divisional structure is also known as the “product structure” where the divisional structure groups organizational function into a division. Each division works as an independent section within the company and the divisional structure contains all the necessary resources and functions within it. Each Division has its own engineering, sales and marketing departments. As per the strategies implemented we can see clearly that Stringer had devised different strategies for each core product that Sony was providing and so he also divided the company’s organizational structure the same way (See Appendix 1). Thus, we see that the corporation became more flat and each division reported to the headquarters. The organizational structure used in a company is intended to increase productivity, provide direction and motivate employees. Hence, the change into a multidivisional organizational structure provided several advantages for Sony in coordination. Products and services were given the focus they needed to retain quality. Communication between facilities became more effective, problem-solving were better managed and teamwork was encouraged through this structure. Due to the fact that each department operates as its own business, people were not overlooked, and processes were evaluated and changed for greater effectiveness. Furthermore, the multidivisional organizational structure change promoted motivation among team members because of the performance/reward connection. Therefore, this structure made it easy for the leadership in the organization to maintain keen oversight and reward those who perform well. Thus, Sony’s employees encouraged this change. Also, Sony customer services provided to customers meet their needs more appropriately as leadership and employees worked more closely with customers. Which resulted increased team member loyalty, dedication and most importantly satisfaction.
However, there were some risks involved when Sony changed its organizational structure. Such as; * Conflicts could occur between divisions. However, this could...