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Sony’s Organizational Culture Change The reason of culture changing of Sony from traditional engineer to creativity is the change in the sources of organizational culture. The two changed sources are the characteristics of people within the organization and changing the property right system. Employees who are selected by the founder usually maintain the similar beliefs with the founder (Jones, 2012, p. 212). The practice of CBS/Sony which decided to hire inexperienced workers to seek diversity and innovative ideas from different ranges of employees has affected the culture of Sony. In order to gain the diversity of ideas, Sony desired to balance the working force from different backgrounds by giving up the traditional hiring upgraded graduates from the famous universities (Eric & Joeri, 2007, p. 4). This change of hiring process facilitated Sony to be more creativity and diversity as more kinds of employees were able to be selected. Change in property rights refers to the employees receives more authorities to use organisational resources (Jones, 2012, p. 215). Compared with other rivals, Sony arranged their designers to have more decision making power and higher positions than engineers (Eric & Joeri, 2007, p. 4). Sony realized that designers can drive the diversity (Eric & Joeri, 2007, p. 4). Therefore, the more power who held by designers, their diversities of managing ideas might affect the entire culture of Sony. The more hiring employees with different backgrounds and the more decentralized decision making to designers lead Sony’s structure to become organic. Organic structure can develop culture value of creativity and diversity (Jones, 2012, p. 246).

Once Sony’s new innovative culture is supported by the building up an organic structure to create a competitive advantage, the new culture can then be established.

Four Structural Continuums Sony’s joint venture with CBS records committed Sony to a double-balancing act, having to blend its traditional engineering culture with the less conventional norms prevailing in the creative and content industries (Mol & Quintane, 2007) According to Black’s Law Dictionary, a mechanistic organization is hierarchical and bureaucratic. It is characterized by its (1) highly centralized authority (tall hierarchy / structured), (2) formalized procedures and practices (standardization), and (3) specialized functions. They are relatively easier to organize, but rapid change presents challenges. Companies in a mechanistic organization structure typically hold tight control, over processes and employees; with an iron fist so to speak. Rules are implemented and rarely deviated from while there is also a very clear chain of command to delegate responsibilities and power throughout the organization. On the contrary, an organisation organic in nature is characterized by (1) Flatness: communications and interactions are horizontal (flat structure), (2) Low specialization: knowledge resides wherever it is most useful, and (3) Decentralization: great deal of formal and informal participation in decision making (mutual adjustment). Companies in an organic organization structure typically have a more open communication and contribution to tasks at hand. The structure of the business is more adaptable and flexible to changes.

Sony’s Structural Change Much of Sony’s earlier work practices were heavily influenced by those prevalent within the electronics industry, and prior to diversifying there was a strong level of participatory decision-making within Sony geared towards creating consensus (Trevor, 1983) rather than creating diversity of thought and behaviour - values similar to that of an mechanistic structure. A realization that a major change of its organizational culture was needed and slowly but surely, Sony began to redefine its organizational culture. In addition, Sony had adopted an unconventional organizational hierarchy with Sony holding its designers in higher and its engineers in lower esteem. Designer’s heightened levels of autonomy and decision making power was instrumental for realizing an organization that was open to ongoing developments in its surroundings (DuGay et al., 1997), providing a cultural change. Essentially designers had become the drivers of both diversity and creativity, prominently featured in Sony’s philosophy that aimed at becoming organic in nature. And though Sony was firmly rooted in the cultural traditions that were typical for manufacturing companies, the difference that set them apart was that Sony had a reflexive stance towards the organizational values it embraced. Its eagerness to adapt or override them in order to experiment with new practices and behaviours was assisted by their move into music. This set in motion a formidable change in its organizational culture, mixing the strict and predictable environment of the mechanistic engineering culture, with the loose and relaxed style of managing that prevailed in the creative, organic industries (Mol & Quintane, 2007)

Role Orientation for Newcomers at Sony When CBS and Sony agreed to enter a joint venture and CBS/Sony was just created, they changed their traditional recruitment system to hire people with fresh and new ideas with no experience. In the meantime, these employees are given full responsibility and the freedom to work on the ideas that matches their personal interest rather than corporate order (Mol & Quintane 2007). Thus, Sony, in this case, uses an individualized role orientation. Individualized role orientation refers to the situation when employees are allowed and encouraged to be creative and experiment with changing norms and values (Jones, 2010?). CBS/Sony, as a relative new company entering into Japanese music market, the management tries to promote individual creativity and entrepreneurship to compete with other record companies. Overall, the role orientation for newcomers at Sony is successful. There are several reasons that can explain this point of view. First of all, CBS/Sony starts from scratch and as a newcomer to the Japanese music industry; there is an urge to form its unique norms and values. In the meantime, the norms and values of the traditional electronics company cannot be used in such creative industry. Thus by hiring inexperienced people with fresh ideas, CBS/Sony under the lead of Noria Ohga, successfully created its unique and forwardthinking corporate culture at that time (also the first one in the Japanese music industry). However, there may have some weakness behind the individualized role orientation. That is, as employees are all given the freedom to focus on the ideas in their favour and the recruitment system is quite loose, there may cause some work efficiency problem and the budget for all those creative projects is high as well(Jones 1986).

Clash between Terminal and Instrumental Values Instrumental values can be seen as short term goals that helps to achieve terminal values and can be linked to short term thinking. Terminal values can be considered as the end goal and having a long term vision. Harvey Schein focused cost cutting to turn a profit. He may have had an instrumental value of cost efficiency and a terminal value of creating value for shareholders. Schein had an autocratic style of leadership, banging on tables and often scolding in meetings suggests he had an authoritarian instrumental value to help achieve his long term goals. Whereas, it seems Morita had an eye for creativity and changing the way how things were done at Sony as a whole. It can be said that Morita had a terminal value of Sony being innovative a place for original ideas and using imagination to produce distinctive artistic works such as music. Perhaps Morita chased this goal at the expense of making short term profit since he tried to convince Schein to focus on the long term picture instead of “chasing short term profit”. Morita may have believed that producing innovative music and being creative will bring success and ultimately profit whereas Schein believed in a strict and efficient enterprise, cutting costs wherever possible and focusing on the bottom line. This is commendable since a company will cease to exist without making a profit, but at the same time if a company does not think outside the box and differentiates itself from competitors, it will be unable to gain a competitive advantage and hence fail to generate profit and shareholder value. This is where the two ultimately came into conflict.

Reference: Gareth T. Jones, Organizational Theory, Design and Change (Prentice Hall, 2012 – Seventh Edition). Mol, Joeri, & Quintane, Eric. 2007. Competition or Collaboration? Betamax and the Compact Disc. Teaching Case, Department of Management & Marketing, University of Melbourne DuGay, P., Hall, S., Janes, L., Mackay, H., & Negus, K. 1997. Doing Cultural Studies: the Story of the Sony Walkman: Sage/Open University. Mol, Joeri, & Quintane, Eric. 2007. Down with Tradition: Sony’s Move into Music. TeachingCase, Department of Management & Marketing, University of Melbourne. Nathan, J. 1999. Sony: The Private Life. New York: Houghton Mifflin Company. Jones, G. R. (1986). Socialization tactics, selfefficacy, and newcomers' adjustments to organizations. Academy of Management journal, 29(2), 262-279.

Case Study #5 PSP_Gunes  
Case Study #5 PSP_Gunes