Change And Change Management At Sony - Essay Example

?CHANGE AND CHANGE MANAGEMENT AT SONY By Types of Change at Sony Change is the cause that creates a difference in very many aspects of life. Individuals create change to improve their lives (Condrey, 2010, p. 45). Companies change for very many reasons but the utmost reason is the maintenance of relevance in the market. Sony, an electronics company as indicated in the case underwent very many changes due to the retrogression in economic strength it was experiencing. Two categories of change occur in the company; people related changes and organization related changes. The first change that occurred at the company was the drop in the value of the company share from a high of $150 to a very low value of $25. The drop in the value of the shares of any company is a clear indication that the real value of the company had gone down. In this case, the drop was a very high of 83%. An urgent action was desperately needed here to rescind the situation given that the drop took just three years. The second change was that one of breaking from the norm (cultural change). In 2005, a non-Japanese took over the leadership of the company. This was a change from the normal norm in which only Japanese top management had been in control. Having been in charge of the American unit, he had the record of integration of all units and creative coherence for a better progression in the country. This was important in that the record was the change that was required in the country and the world as a whole. More change came in after the executive; Howard Stringer took over the top management of the company (leadership change). With the company facing stiff competition from the other companies in the industry; Samsung and Apple, the first change that inevitably followed was streamlining of the company into five production groups. There was need to specialize in electronics, television, DVD recorders, digital imaging and the portable audio. This was stimulated by the fact that some of the companies competing Sony were moving away from the CRO televisions and adapting flat screen television sets. Apple was embracing the killer iPhone which had so many properties that it was almost full taking over the market. Every change was coming with the resultant consequences which were dubbed change in themselves. Eleven plants were closed and 10,000 employees were laid off. According to Cordrey (2010), such a step is taken to remain with the most effective personnel in operation. When he joined the company, Stringer found out that the decision making process was autonomous across all the units. The autonomy, he found out was creating internal strife and imbalance. This autonomy was inclusive of the key decisions of the company. On this, the change he made was that of centralizing all decision making processes in the company. Over the product lines, the decision was to make it possible for easier decision making processes to take place. His goal was to make SONY products to operate seamlessly with one another in the communication. To save on the cost spend on research and development, the new executive had to eliminate product redundancies which had been adopted by the seamless networking of the company products. The change realized here is in the mode of spending in which there was need to reduce the expenditure on such unnecessary items like the extended research that was being done (structural change). Sony products had worked miracles over the years and they were still doing fine until the simplicity of the other company products came to the market. This change was brought about as a result of the realization that the customers were not just interested in the complex Sony products but were also interested in the ability to operate the products. The overall outlook of the items at Sony needed to change and this is seen in the simplicity of the Apple products that force the general thought at Sony to change (technological change). The last plan that happened at the company was that leading to the lineation of the products that were being produced (strategic change). The business and corporate strategy changed and there was a plan to eliminate some products and introduce others. This change plan was to effectively create more emphasis on production of latest model television and eliminate the CRT old model. Production of flat screen LCDs as well as projectors was emphasized. The change was also to see production of blue ray, on high definition technology as well as mobile technologies. These changes were actually the ultimate constant that was to redeem the value of the company in the market. Analysis of Internal and External Forces There are many factors that affect the business of a company. These may be internal or external. At the Sony Company, the analysis of these factors is categorical of the form below; Internal Forces Management and Employees There are management changes at the company in that a new executive takes over the running of the company. This is an issue that brought the desired change to the company to avert the down movement of the company. The collection of the rightly qualified executive and the employees was an internal factor that changed. As an executive, Stringer laid off thousands of employees so that quality can be realized at the company. The second management issue was to centralize the management of key decision making practices in the company. These changes were useful for the creation of a progressive development of the company. Capital and Finances This is an important part of the company. It was realized that the value of the company ability to raise capital through sale of shares could not bear much money. This was because of the dropped value of the company share. Restructuring required capital. This saw a total of amount of $1.8 billion. However the capital saw a loss of well over $90 million. The capital investment also saw a change in preference from the old complicated types of products to new simple products that appealed to the customers. Therefore, the capital distribution covers several items and this is relevant in the development of the company. Cash flow One of the major indications that the company was making a positive step was the distribution of the cash flow. Cash flow is an internal factor that affects the way a business runs its financial management practices (Griffin & Moorehead, 2011, p. 33). For instance, there can be a change in the general investment activities. Just as it was done at the company, there was a change in the creation of the products from those that would generate less cash flow to those that would create more cash flow at the company. For instance, there was a change from many other products to creation of the flat screen television. Away from technology, this is a product that would have a high stock turnover. Re-investment was a way of creation of more cash flow which was beneficial for the company. Structures Change of internal structural formation of the company was an inevitable issue. There is a high variation of the structures that changed at the company (Papadopoulos, 2011, p. 67). The first was the management issue in which the most important decisions to the company were made centrally. The implication of this decision making structure is that the top management is able to monitor the development of the company at all stages. More important is the fact that the top management is able to take charge of all the other employees at all levels. The other structural change was a shift in production. This calls for an overhaul of the machines so that the latest technology is instituted. External Forces Competitive factors The company was facing a very stiff competition from other external companies. Samsung and Apple were producing state of the art products that were very relevant in the creation of a better and bigger market for them. The Apple products were also simpler to operate. This was causing a shift in the customers from Sony products that were relatively hard to operate to apple products that were both detailed and easy to operate. Economic factors There are several economic factors that directly impacted on the company. The first economic factor is the drop in the value of the shares of the company. This, according to Papadopoulos (2011) creates a low profile of the company in the financial markets. This means that it will be almost impossible for the company to attract more shareholders to its stocks ad shares due to fear of a dip. The value of the stocks dropped from $150 to $25 within a very short time and this was a concern to the management. Technological Factors Initially, Sony was known for its Walkman and CRT televisions. There was a change in technology that forced the new management to institute a specialization to production of LCD televisions. This was fuelled by the advanced products from Samsung and Apple companies. The world of technology keep changing and although Sony had kept its products on the high go for long, there was a challenge from the other companies which meant the company had to adopt. The meaning of this adoption means that the company is able to create its own independence in the market and see to it that it survives and remains relevant. With the ever changing curiosity and class of the consumers, the company had to adopt that. Implementing the Change by Using the Various Theories of Change Sony Company is able to implement the change that is supposed to steer the company to the originality levels. The development of this change can be based on the models of change in the theories attributable to the change in institutions. The first applicable change theory is the evolutionary theory. The application of this model is based on the assumptions that are used to justify its applications to organizations. In the evolutionary theory, it is assumed that change takes time and is shaped by circumstances and situational variables (Hellriegel & Slocum, 2009, p. 89). It also assumes that the social systems are diversified in that they depend on social variables. There is also a range of belief that states that the management has a considerable ability to influence the changes that occur in an organization. The most important issue in this theory is the environment and the changes that have occurred. Therefore, the management can make an adaptation to the change that occurs depending on the type of change. In the case of Sony Company, there are so many contingency measures that are needed to create change in the situation; adaptability of the competitive ways of the other companies, change in financial management and introduction of the new and state of the art means of equipment are some of the methods that can be used. The management needs to create a strategic goal that is based on SMART principles (Specific, Measurable, attainable, Realistic and Time Bound). Organization needs to be made around outcomes and not the tasks. The end is supposed to justify the means used. The second theory applicable to the situation is the teleological theory. This theory is bound around scientific management, models that are rational, change that is subjected to effective planning. One of the greatest issues in this theory is that it asserts that change usually occurs because the leaders, change agents initiate change because they see it as a necessity. Management is very instrumental when it comes to issue of initiating change. It also alludes that change is more productive if initiated from inside rather than from outside the organization. This theory is directly applicable to Sony and the new executive is seen to initiate it. He has done a lot of changes from within. To implement the change, there has to be an internal belief that the change will be productive (Hellriegel & Slocum, 2009, p. 54). Therefore, the first procedure would be to initiate an internal psychological mobilization to initiate the change. This is because there are some employees who are very skeptical about the situations of change in the company. Based on the scientific procedures in the theory, there has to be knowledge that change starts from within and is possible. Therefore, it would be prudent to source for the most experienced and professional executives to head some important sections of the company. Admission of these would make the company have solid leadership at the departmental level and create a more workable format that would be more beneficial than it was before. The scientific management therefore, with its insistence on quality management based on tangible issues would see an effective implementation of the company strategic goals of regaining is past glory. Dialectical theory is the next theory that would be used to create awareness to progressive movement. From the running of this theory, there is a borrowing from the political arena in which the coalitions that dominate maintain the status quo by a collective measure. The leaders are viewed as very important in the running of the leadership of the institutions but the key idea is the unifying strength that brings all the stakeholders together for a common goal (Condrey, 2010, p. 132). Few people according to this theory involve in the top management to take care of the key issues but the other members are to actively participate in the attainment of the common goal. The value of the opposition is also highly recognized. This is a method that is already practical in Sony Company in that the new executive has centralized key decision making organs. What will be done therefore at this point is to be keen about the value that the opposition group (the skeptical group) is up to. Inculcation of their ideas in the decision making kit will be valuable since they had witnessed the impossibilities they are expressing. To implement the change therefore, there will be need to create unity in the company. This will be important because with the few skeptical ones, the swaying of their strength can overturn the planned strategies. The inner decision making organ that was centralized can also act as a training ground for the executives that would later be posted to manage the international branches. The importance of the information from these theories is that they touch on all areas of the company management. Individuals are the company and therefore should be reached to at all times for the implementation of the strategy. (Hellriegel & Slocum, 2009, p. 501) Likely Sources of Resistance in Sony Resistance can occur from several sources. There are also several indications that there is resistance in a company. There are two also types of resistance that can occur to an institution; individual and organizational resistance. Individual sources are those that reside in humans in which there are naturally programmed forms of resistances. Organizational resistance is that which emanates from groups in the organization. By nature, organizations are conservative and tend to hold onto that in case of any change that occurs. Some of the signs of resistance are passiveness, malicious compliance, failure by the parties to implement the change, procrastination, withholding of important information and even sabotaging ideas (Griffin & Moorehead, 2011, p. 77). The first individual source of resistance in an organization is security. Many people in employment positions feel insecure when change is introduced. In Sony, the new management was forced to lay off over 10,000 employees. There must also be resistance by the remaining ones because of the fear that new changes will be implemented that will take their job places. The second cause is the fear of the unknown. At Sony Company, some of the employees are skeptical, not because the endeavors have failed in the past but because they fear the new management might introduce some operation procedures in which they are not well versed with and adapting will be an issue to them. According to the discussed ways of implementing change at the company, there might be times when the amount earned will be directly proportional to performance. Therefore, the reduction in their earnings might cause them to resist the change. Organizational change comes due to many reasons. The first is structural inertia. In an organization, there are conventional ways of doing things and all the employees are well adapted to that. For instance, there can be specified job descriptions and a culture at the job place. All endeavors to change this therefore are met with an inertia that repels the new changes. The second source is the group inertia. Much as everyone would like to change their behavior, there are group mechanisms that repel this change and keep situations at conservational levels. At Sony for instance, the new management initiates a centralized decision making process. The autonomous process that existed before is bound to have cultured the top managers to adapt some form of behavior. They may therefore not easily conform to the new standards of group ideas. The third organizational source of resistance is limited focus on change. If there is a change in technology without there being a structural back-up, then there will possibly be resistance. With the technological changes in place, there is bound to be resistance. Dealing with resistance to change is very tricky. However, the first way to deal with change would be to have the people resisting that change taking part in the change itself. This should however be done carefully lest it bring more trouble than value. For instance, the management would include the skeptical members to take part in the decision making so that their views would be inculcated in the final decision making process. The second way is to get to the length in understanding the true nature of the resistance. This is important in that all those resisting may have tangible reasons to do so that may be helpful to the company (Griffin & Moorehead, 2011, p. 547). Sony was experiencing changes that had not been witnessed for a very long time and there was therefore need to create an understanding among the employees to appreciate the need for the change. The last idea was for Sony to take concrete steps that constructively creates the need to have an understanding of the situation. In this case, there will be a positive gain to the advancements changing the company positively. References Condrey, S. E. (2010). Handbook of Human Resource Management in Government. New York: John Wiley & Sons. Griffin, R. W., & Moorehead, G. ( 2011). Organizational Behavior. New York: Cengage Learning. Hellriegel, D., & Slocum, J. W. (2009). Organizational Behavior. Washington: Cengage Learning. Papadopoulos, P. (2011). Role and Function of Stock Markets. New York: GRIN Verlag. Read More