Lo and behold! An uber-consumer-electronics king is born in Tokyo:
Sony on Friday unveiled a sweeping shake-up of its businesses and radical management changes aimed at better integrating its hardware and software operations and giving Sir Howard Stringer, chief executive, more control of the group’s struggling electronics businesses.
Sir Howard, who is chairman and chief executive, will take on the additional post of president and assume responsibility for Sony’s key electronics division.
Ryoji Chubachi, currently president, who had responsibility for the consumer electronics business, will become vice-chairman in charge of safety, quality and environmental issues.
As we noted last month, Sir Howard Stringer’s influential network of supporters – encompassing western media and certain groups within Sony – had let it be known he was locked into what one insider characterised as a “fight to the death” with Chubachi, who the pro-Stringer camp liked to characterise as leader of the anti-reform “old guard”.
We suspect the story is not quite as clear-cut as Sir Howard’s supporters portrayed: the charismatic “outsider’s” noble campaign against the ossified forces of tradition – even though some of his critics frequently evoked the old “cultural differences” line used so often against foreign executives in Japan. But definitely there were growing rumbles – both within and outside Sony, among some analysts and investors – that Sir Howard had had enough time to defeat the “enemy within” and had failed to do so.
So, after who-knows-how-many boardroom battles and subterranean tensions within Sony, came what The Times called “a dramatic demotion” for Chubachi, who had responsibility for the empire’s all-powerful consumer electronics business, will become vice-chairman in charge of safety, quality and environmental issues. Katsumi Ihara, the powerful former finance director who had been seen as Sir Howard’s most likely successor, will move to Sony’s separately listed banking subsidiary.
The changes reflect what the FT described as “heightened alarm at the inability of Sony to turn round its electronics business despite four years under the leadership of Mr Chubachi and Sir Howard”.
In a reorganisation that Sony said was aimed at better enabling it to develop networked products and services, the group is integrating its computer games company with its personal computers and mobile products divisions into a new network products and services group.
More important, the change is a personal triumph for Sir Howard who, in discreet chats with correspondents and analysts, has referred to dark, anti-reform forces within the empire. Essentially, says the FT, Sony will reorganise its electronics business into two new groups:
The PlayStation video games business will be integrated with laptop computers and mobile products such as the Walkman music player. A new consumer products group will bring together Sony’s struggling TV business with other devices such as digital cameras, as well as semiconductors and electronic components.
The new divisions will be run by what Sir Howard called his “four musketeers”: a group of young Japanese executives with experience abroad. Kazuo Hirai, head of the games division, will lead the new network products and services group. He will now be seen as frontrunner to become Sony’s next chief executive.
The present head of the TV business, Hiroshi Yoshioka, will lead the consumer products group and the other “musketeers” will be their deputies. Another change is the appointment of Yutaka Nakagawa to head a new group charged with
With Sir Howard now holding the triple titles of chairman, chief executive and president, perched atop a presumably disgruntled and vanquished old guard lurking in the “safety, quality and environmental” department and banking subsidiary, it sounds to us like a great plot for one of Sony’s video games.All the while, the company is fighting an increasingly desperate battle to withstand the damaging impact of a high yen, a plunge in global demand and dwindling brand premium. As The Times noted:
Analysts said that, despite the huge damage being done to Sony’s business, the speed with which Sir Howard has managed to push through the latest round of management changes – and the growing sense of crisis down through the ranks at Sony – represented one beneficial side-effect of the turmoil.
And the stakes for Sir Howard, meanwhile, in his winner-takes-all game of “Sony turnround” have soared through the stratosphere.
His do-or-die quest for the triple-crown at Sony has all the dangerous undertones of the old Chinese curse about getting what you wish for. But in typically ebullient fashion, he said on Friday as he announced the management changes: “This is the most fun I’ve had in six months”.
Related links:
Sir Howard tightens his grip at Sony – FT
Sony chief Stringer to double as president – FT
Sony clears out ‘old guard’ in boardroom shakeup – The Times
Sony (II) – Sir Howard’s way – FT Alphaville
Sony’ shokku’: the sequel – FT Alphaville
Sony: Watch this space – FT Alphaville