What types of organizational change eave occurred in Sony in terms of series of events through time? Organizational change will be evaluated as a process and will be analyses at different levels. Moreover, what are external and internal triggers of change, which initiated the need for organizational change? Furthermore, the paper will examine some useful theories of change, advocating the methods for managing the change at the implementation stage. In addition to that the sources of resistance will be evaluated which are possibly occur in Sony. 2. 0 INTRODUCTION Sony is Japanese consumer electronics giant.
Nowadays Sony Group is span into ere main businesses: entertainment, electronic and financial services. Today’s rebuilding the electronics business and repositioning it for the future growth are the most urgent tasks, which require the responsibility – says President and CEO of Sony Corporation Kazoo Hiram (Kazoo, 2013). Entertainment and financial services have stable future growth. However, the operating environment for electronics faces increasing pressure from its competitors: Samsung and Apple. Kazoo Hiram became President and CEO of Sony Corporation on 1 April 2012, overcoming Sir Howard Stringer.
Even though Sony began preparing to implement some changes by Sony ex-chairman and chief executive Nobility Died in terms of restructuring plan strategy, company failed to execute the changes. From 2000 to 2003, Sony faced big challenges, the business seemed unprofitable and Sony planed to consolidate its production in fewer factories. Sony profit plunged 98%, indicating the total sales were down 6. 9% to 1. 6 trillion yen (BBC News, 2003). In addition, the value of shareholders shares declined from $150 to $25. Sony was far away from meeting its profitability goals and it was enough to force some major changes. 3.
ANALYSIS 3. 1. 0 Organizational Change and types of organizational change in Sony 3. 1. 1 What is Organizational Change? According to Panamanian et al (2010), the change simply can be defined as “making things different”. Organizations need to change for variety of different reasons whether there is a necessity for improvements or maximize the productivity or accelerate organizational effectiveness. Ultimately, organizations need to be profitable and provide shareholders value. However, there are might be patters when changes are occurring by new products, new opportunities, expanding market or shrinking market.
Those changes can be both within and outside the organization: 1 . Mergers; 2. Acquisitions; 3. Adapting new practices; 4. Upgrading technology. The only thing is constant is change. Therefore, change should be seen as the rule rather that the exception in organization (Panamanian, Reedy, Rose, & Cavity, 2010). 3. 1. 2 Organizational Changes in Sony Generally, three main types of change emerge: Transactional change Transitional change Transformational change Among three main changes the best would be applied is transactional change, s it outcomes the strategy that Sony has chosen to cope with the newly chaotic environment.
For Sony successfully implementing the chosen change the company needed to have higher level of leadership and organizational investments. Sonny’s current position on the market was so weak that it had to redesign its existing systems of policies and procedures. Furthermore, those radical modifications required a fundamental revision of Sonny’s mission, organizational culture and its strategy. The need for transformational changes has influenced Sony to start the process of re-engineering the ways it used to pirate and break the organization’s frame of thinking. . 1. 3 Structural change Sony was able to identify what needs to be changed in terms of the organizational structure. The Sony structural changes stem from internal and external factors. As Sony was facing the financial loses and enormous pressure from its competitors, Stringer introduced structural change through streamlining business into five categories where the focus lied mainly on: 1) Electronics; 2) Televisions; 3) Digital imaging; 4) Portable audio; 5) DVD recorders. This is the example where Sony classified and defined the business focus onto groups.
There are also some internal changes that occurred within the organization in terms of structural change. Stringer increased organizational effectiveness through modifying the existed organizational structure. To streamline and enhance the effectiveness of decision-making he decides to divide the structure and change to a centralized way to fit the communication needs of the organization. Where previously Sony allowed its departments to be autonomous. 3. 1. 4 Operational change Sony was in an extremely defensive posture as a result of decrement of the value of the shares.
For Sony in order to achieve improvements in business processes, company decided to close 11 plants and lay off 10,000 members of staff. Thus, when the company eliminated staff and cut back services it will turn in reducing workforce and minimize spending in order to cope with challenges. Stringers believed that these near-term solutions would have a positive impact in the long-term. He suggested that reducing the cost would increase the company revenue. However, Sony failed to meet of profit of $90 million, which they expected to post. Stringer said: “We have made promises before, but we failed to execute them”.
To unlock potential performance Sony and improve the core organizational process the effective solution would be to implement the operational change. Operational change refers as whether the new systems, structure or technology takes place whose effect on working arrangement is instant. Thus, Sony for retooling its operations and processes it decided to make some changes in specific technologies. Sony improved the level of output and start focusing on televisions. There are LCD and rear-projection TV’s, self-luminous flat-panel organic light-emitting diode display and many other technologies.
This operational change analyzing and identifying organization’s processes from the inside and enabling to create sustainable workflow for an organization. 3. 1. 5 Technological change The new set of changes is coming from technological implementation. Sons line of production is benefited by adoption of uniform software development. The new software increases the production as the design is eliminated, the quality of production is improved through removing product redundancies and this set up a smooth controllability across the line. Moreover, this also would reduce the cost of Research and Development. 2. 0 Internal and External Forces Organizations change in respond to external environment and built the competitive strength. For Sony to be stable on market with the long-term survivability it has to keep up with changes. There are external driving forces and internal driving forces. Now below we discuss major two forces of change 3. 2. 1 External driving forces External driving forces are those mainly occurred outside the company. For organization to deal with those forces it has to cognizant of changes, be flexible and willing to respond to them in most effective way.
Several external forces re responsible in determining the organizational change process. Any changes in government policies or changes in any new rules or laws are known as Legal forces. The new regulations require organizations to adjust their culture to comply with the new law. On the other hand, the advancement of technologies is one of the key changes in an organization’s environment. Advancement in technology can occurred in the field of developing information technology. Nevertheless, at the same time advanced technologies made the environment more competitive.
Technological factor forced Sony to upgrade its uniform footwear in order to succeed and gain the competitive edge. With a single change in an organization’s technology, permit competitive advantage for Sonny and take over its competitor – Samsung and Apple. Competition is the next force, which will be looked at. Today’s the globalization lead many businesses to operate not only within the national boundaries but also globally (Robbins & Judge, 2010). For Sony to compete with highly competitive environment its strategy has to be changed towards developing new products and introducing them to market quickly. 3. 2. Internal driving forces Internal factors also change in an organization. Workers may have impact and force an organization to change its policy in terms of the respect to working hours, salary rate and other compensation issues. Probably the most important internal force is emerged by a top management. In 2005, Howard Stringer became the first foreigner in history of Sony who started leading Japanese company. He brought a new vision and started executing the major changes in the way the company used to operate before. Furthermore, changes in consumer preferences and tastes forcer Sony to make it product more user-friendly.
When Sony used the information resource, collected and analyses the data, Sony came to critical assumption that consumer buying patterns no longer interested in technical superiority but the easy use of products. Moreover, cathode ray tube (CRT) television has completed its life cycle as a product. To revive the television centralization Sonny had to re innovate and modify television product. Radical and groundbreaking changes forced Sony to scrape the production. Although it has a high degree of involved risk, Sony started focusing on advanced technologies such as LCD, Blue-ray and others.
Despite the fact of high risk involved, Sony kept in mind of the importance of radical changes and the importance of product development. 3. 3. 0 Implementing the change through the various theories 33. 1 “Calm water” and White-water” metaphors “Calm water” metaphor Accosting to Robbins (2011) the organization can be seen as a large ship crossing a calm sea. The captain and his crew are aware where they are going because they experienced this trip before. The change is seen in the form of an occasional storm, it calm and at the same time predictable. ‘White-water rapids” metaphor
Today’s business environment is uncertain and dynamic. The metaphor of “white-water rapids” illustrates the organization as a small raft navigating a rigging river with uninterrupted white-water rapids (Robbins S. D. , 2011). Those models are best illustrated by Kurt Linen’s three steps description of the change process. Social psychologist Kurt Lenin states that successful implementation of change is based on three steps: unfreeze the status quo, make a change and refreeze the new change and to sustain it permanently (see Figure 1. 0). Source: (Bubbles & Van Den Broker, 2006)
The main purpose of unfreezing stage is develop the motivation to change. To replace the people’s old behaviors and attitudes the management has to accelerate the driving forces which will move away from the status quo to (see Figure 1. 1). There are also retraining forces, Which block the movement from the initial equilibrium to desired state (Robbins & Judge, 2010). Source: (Robbins & Judge, 2010) At unfreezing stage, it is essential to consider the fact that employees need to become dissatisfied with the old way of operating. Benchmarking can be applied as a technique to help to ‘unfreeze’ an organization.
Benchmarking is a process of collecting the data about how other companies performing to achieve their results. Those collected information allows company to compare its performance with that of others to unfreeze employee’s attitudes and motivate people (Bubbles & Van Den Broker, 2006). For Sony to implement change successfully it might learn its competitors such as Samsung. This company spends a huge sum of money on advertising in order to build the brand. Nowadays Samsung has grown to a leading electronic company, increasing its profit continuously (Samsung, 2013).
For Sony s management it can be an appropriate illustration o implement the change through and change its internal organizational process through benchmarking technique. The purpose of the next stage is providing employees with new information, new behavior model and how the main processes within the organization would be reorganized. A consultant on change management must convey the idea that the change is vital and constant. According to Robbins (2010) the objective of refreezing is stabilize the new position by balancing the driving and restraining forces. 3. 2 Action research The objective of action research may provide Sony a scientific methodology for managing planned change. This process is based on systematic collection of data, where the analyses data is used to choose a change action. The process of action research is involved of five steps diagnosis, analysis, feedback, action, evaluation (see Figure 2. 0). Analysis Source: created by author Diagnosis A consultant of change management in action research, the diagnosis is assessed no collecting information about existed problems within the organization from members of the organization.
The gathering information can be done through the interviews with employees or by asking questions. Analysis Once the concern is established about the issues, a consultant starts combining this information into problems area. The people who will be participating in change program are required to determine the primary concern about problem and base the solution. Feedback To develop action plan about needed change the consultant use feedback and share the current situation with employees.
Action Once the problems are identified and discussed a consultant and staff set up the action plan. They bring the specific actions to correct the problems. Evaluation The final step is evaluation of the action plan’s effectiveness (Robbins & Judge, 010). The subsequent change can be then evaluated and compared (Robbins & judge, 2010). 3. 3. 3 Organizational development Balzac (2011 ) states that Organizational development (DO) is a collection of planned-change techniques or interposition design to make better organizational effectiveness and employee’s well-being.
On other hand Robbins (2010) advocates that B encompass that planned-change interposition is based on humanistic-democratic values. The following values can be identified and applied within Sony: 1) Respect for people. Sony must treat with dignity and respect its employees. 2) Trust and support. Sony has to cultivate authenticity, openness and a supportive climate. 3) Power equalization. Sony to be an effective organization has to understate its hierarchical authority and control. 4) Confrontation.
Any risen issues in organization must be underlined and should be confronted. 3. 4. 0 Sources of resistance and tactics of overcoming it 3. 4. 1 Sources of resistance According to Robbins (2010), the resistance of change can be characterized as positive phenomenon. It provides a degree of stability and predictability of behavior. Moreover, he states that without the resistance, organization would e characterized as one with chaotic randomness. Individual sources Sony had unsuccessful experience with reorganization plan and change in a product line in past (HOGUE, 2013).
Sony failed to transform the change. Thus, it created the fear of the unknown for individuals within the company. It is a source which occurred ambiguity and uncertainty for the know. Economic factors – as we remember from above statements, the change plan has also affected the technological side of Sony production. If individuals in organization have a feeling that they will not be able to perform the new tasks or routines to he standards, they have operated before it in turn can arouse economic fears (Robbins & Judge, 2010).
Organizational sources Structural inertia can be referred as a counterbalance in sustaining the organization’s stability. For Sony to be able to produce the stable climate within the organization it has to built-in mechanisms – selection processes and regulations. An individual union member is willing to accept the change however if group norms dictate resisting any unilateral change then individual is likely to resist it. Group inertia refers when a group of people have a strong fear and resist to hangs. This source is likely to be appeared in Sony. . 4. 2 Tactics of overcoming resistance There are seven main tactics of overcoming the resistance to change. They are suggested to apply in dealing with resistance to change in Sony. 4. 0 Conclusion Overall, organizational change is beneficial. Nevertheless as well, as the organizational change can bring the competitive advantage and improve productivity it also may create negative effects such as employee’s resistance. However if the resistance is defeated and issued with a specific knowledge it can stimulate a healthy debate over the merit.
