Sony Corporation’s Organizational Structure Pros & Cons

Sony Corporation’s organizational structure evolves to accommodate pressures from the electronics, gaming, entertainment and financial services markets. A firm’s corporate structure reflects the design and system used to determine the relative positions and functions of organizational members. Sony has changed its organizational structure to adjust to changes in the industry. The company’s structural change supports improvements in competencies to address competitive rivalry. As a major global business, Sony has an organizational structure suited to address challenges in current global market conditions.

Changes in its organizational structure have increased Sony’s business resilience. The new corporate structure ensures the company’s effectiveness in focusing on its key business segments and the most profitable products.

Features of Sony’s Organizational Structure

Sony Corporation has a balanced matrix organizational structure. Even though geographic divisions are present, the corporate structure is primarily based on business function and product/business type. Some executives head multiple divisions or groups. For example, Sony’s Research & Development group, Energy Business, and Storage Media Business are under the same executive. The following are the characteristics of Sony’s organizational structure:

1. Function-based groups
2. Business type divisions
3. Geographic divisions

Function-Based Groups. This structural feature involves Sony’s business functions. For example, Research & Development functions are grouped together. The objective is to use the corporate structure to support functional efficiency and effectiveness. Sony has the following function-based groups in its organizational structure:

1. CEO
2. Finance
3. Research & Development
4. Legal, Compliance, Corporate Communications, CSR, External Relations, Information Security & Privacy
5. Manufacturing, Logistics, Procurement, Quality & Environment
6. Engineering
7. New Business (Strategy)
8. Sales & Marketing
9. Human Resources & General Affairs

Business Type Divisions. In its organizational structure, Sony maintains divisions based on business type or product type. For example, the Storage Media Business is responsible for producing storage devices. The company now focuses on three main business segments, namely, (1) Devices, Game and Network Services, (2) Pictures, and (3) Music. However, the business type divisions that compose the segments in Sony’s organizational structure are as follows:

1. Energy Business
2. Storage Media Business
3. Imaging Products and Solutions Business
4. Game & Network Services Business
5. Pictures Business
6. Music Business
7. Home Entertainment & Sound Business
8. Mobile Communications Business

Geographic Divisions. This structural characteristic is the least significant in Sony Corporation’s business. The company uses geographic divisions for finance, planning and strategic decision-making. For example, geographic divisions are used in financial reports. Sony uses the following geographic divisions:

1. Japan
2. United States
3. Europe
4. China
5. Asia-Pacific
6. Other Areas

Sony’s Organizational Structure: Advantages & Disadvantages

Flexibility is a key advantage of Sony Corporation’s matrix organizational structure. For example, the linkages among function-based groups and business type divisions enable the company to responsively address market demand. Sony’s corporate structure also has the advantage of resource focus on specific businesses or product types. The business type divisions enable the company to focus its efforts and resources to support innovation and product development, which is secondary among Sony’s intensive growth strategies and necessary in applying the company’s generic competitive strategy.

A disadvantage of Sony’s organizational structure is the limited flexibility of geographic units of the business. Nonetheless, the company has subsidiaries in various countries, especially the United States. Still, Sony can improve its organizational structure by increasing the autonomy of some of its groups, such as the sales and marketing function in Europe.

References

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