Sony Corporation - Restructuring Continues, Problems Remain

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Case Code : BSTR361 For delivery in electronic format: Rs. 400;
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Organizational Restructuring
Case Length : 22 Pages
Period : 1995-2009
Pub Date : 2010
Teaching Note : Not Available
Organization : Sony Corporation
Industry : Consumer Electronics
Countries : Japan


Japan-based electronics and communications company, Sony Corporation, was subjected to a spate of restructuring exercises since 1994 to improve the financial performance and competitiveness of the company. With the initial efforts to restructure the company not yielding results, Sony went in for a revamp of the top management in 2000.

The efforts by the top management in organizational restructuring failed to put Sony back on the growth track. At this juncture, in 2005, Howard Stringer became the first non-Japanese CEO of Sony. Under his leadership, Sony was subjected to a major reorganization in September 2005.

Stringer's efforts started to show results and Sony reported encouraging results for the financial years ending March 2007 and March 2008.

However, by late 2008, Sony was again in deep trouble. For the fiscal year ending March 2009, the company announced annual loss of 98.9 billion. In February 2009, Sony announced another round of reorganization, with Stringer assuming more powers as the President of the company. Through this reorganization, Sony formed two business groups - The Networked Products & Services Group and The New Consumer Products Group. The case details the restructuring exercise and outlines the pros and cons of these efforts. It also discusses in detail the main reasons for Sony's problems including culture, competition and macro-environment issues.


Examine the adverse implications of frequent restructuring at Sony Corporation.
Analyzing the impact of competition in global consumer electronics industry on Sony.
Evaluate the strategies being adopted by Sony to regain lost market share.
Appreciate the importance of innovation and introducing new technologies in the consumer electronics industry.
Critically study the latest restructuring plan proposed by Stringer in February 2009 and evaluate its efficacy.


  Page No.
Sony in Crisis, Again 1
Background Note 2
The Restructuring Efforts 3
The Outcome 5
Problems Resurface Again 6
Reorganization in 2009 8
The Aftermath 9
Looking Ahead 10
Exhibits 12


Sony Corporation, Reorganization Programs, Organizational Restructuring, Silo Culture, Sony United, Cross-company Collaboration, Organization Structure, Howard Stringer, Product Innovation, Content Development, Function-specific Organization, Nobuyuki Idei, Transformation 60, B2B Solutions Business Group, Business Segment, Networked Products & Services Group, Organization Chart of Sony, New Consumer Products Group, PlayStation, Cross-functional Teams, Champion Products, Yen Appreciation, Consolidation of Electronics Business

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