Sony is suffering from a bad case of the schisms, a report has claimed.
In an analysis of Sony, Reuters said that Sony boss Kazuo Hirai has his work cut out putting the company’s engineers, mostly in Japan, against the movie studios and other content outfits mostly based in the US.
Apparently this all started in the mid-1990s when company leader Nobuyuki Idei started pushing Sony into content and networks. Idei bought the Metro-Goldwyn Mayer studio in 2005, and established New York-based Sony BMG Music Entertainment. He also started the mobile phone venture with Ericsson which did not do so well.
But the problem was that the push to content stuffed up the hardware side of things. The fact that Sony’s music business wanted content protection meant that Sony failed to shift to hard disk drive plays and gave the business to Apple.
Meanwhile, it was missing other chances. In 2001 it created the Airboard, a pre-tablet tablet that Sony decided to drop in the end. While Sony made shedloads of cash the move away from fabrication toward content was getting up people’s noses. This was true in Japan, where manufacturing and the jobs it creates are considered part of the mission of the country’s major companies.
In 2005, Idei handed over to Howard Stringer, who vowed to bust open Sony’s silos and make content and hardware work together.
He won the Blu-ray war which enabled him to claim that content and hardware were finally working together.
But Stringer has never been sure his managers in Japan listened to what he asked, understood what he said, and would act as he directed. Mostly because he never spoke Japanese.
This happened in 2005 – managers dropped back-lit LED TVs because of costs without telling Stringer. Samsung released its own version in 2009, forcing Sony to play catch-up in 2010 with a product it had first.
Japanese engineers were miffed that Stringer was spending too much time hobnobbing overseas and too little time paying homage to Sony’s roots as a maker of hit gadgets.
In 2008 Stringer laid off 16,000 workers and cut back $3 billion in expenses as he had to deal with the worldwide recession. Japan’s earthquake and tsunami last year unraveled supply chains and then there was the hacking of its online game accounts.
The outfit made staggering loses. Stringer surprised shareholders by announcing Hirai’s promotion to CEO a year earlier than expected.
Hirai differs from his two content-oriented predecessors by being a mixture of engineer and content manager. He is also bilingual and bicultural which should smooth over the cultural differences between the content and hardware sides.