Reference no: EM133828088
Evolving human resource challenges at Sony
The Japanese electronics giant Sony employs 146 300 people worldwide, making and marketing the PlayStation home video game systems, televisions, digital and video cameras, laptop computers, personal music players and semiconductors.
Europe, Japan and North America each generate about a quarter of its sales; the remainder comes from the rest of the world. The firm has several entertainment divisions, including Epic and Sony Pictures Entertainment, and plants in China, Japan, Malaysia, Mexico, Spain, the United Kingdom and the United States.
Sony has struggled in recent years because of the impact of the strong yen and the global recession. The PlayStation is facing its most recent, serious competition from Microsoft's Xbox One system, after many years struggling against Nintendo's popular Wii system before Microsoft's latest release. The Sony Reader fared modestly against Amazon's Kindle and especially against Apple's iPad. Sony's music-player business was undone by the iPod and iPhone.
The manufacturing workforce
Sony's CEO is Kazuo Hirai, a native of Japan who has worked in electronics and gaming sectors for many years. After four years of slow sales, his predecessor, Sir Howard Stringer, had reorganised the company, closing a dozen factories, cutting 18000 jobs and shifting component manufacturing to low-cost countries. For example, management closed an audio-equipment plant in Indonesia, laying off some 1000 workers. Sony tries to avoid laying off workers, however. When factories in the United Kingdom, where 4000 people made cathode ray tubes, gradually lost their competitiveness after the introduction of flat-screen TVs, Sony worked with unions to create enhanced severance packages and find new job opportunities in the region. Over time, it also restructured the plants to produce high-definition broadcast cameras. Sony built strong customer relationships, developed new talent, created a new corporate culture and aligned employees to the new strategy. The plants reinvented themselves by emphasising best-in-class efforts to achieve preferred supplier status.
Hirai aimed to continue this change for a leaner, innovative and more flexible company when he took over from Stringer in 2012, and he also recently announced that Sony will be selling its headquarters in New York to relocate to cheaper premises. Sony has numerous plants and R&D centres in China and has relocated scores of expatriates there. Initially, the firm was attracted to China because of its low-cost labour, but today it also benefits from the superior skills of the local workforce, particularly for high-technology projects. Sony's R&D centre in northern China employs over 20 000 software engineers. Nearby universities and technical institutes churn out thousands more engineering graduates each year. The high concentration of foreign firms in China (including Dell, Hitachi, IBM and NEC) has created considerable competition for local talent.
Human resource philosophy
Sony has a highly developed approach to international human resource management. When recruiting new employees, executives look for candidates who have an entrepreneurial spirit, think creatively and have strong communications skills. Sony's former chair, Norio Oga, was also an opera singer, an orchestral conductor and a licensed jet pilot. His education in music and the arts, alongside science and engineering, strongly influenced the development of the firm's most successful products. In all areas, Sony encourages employees to structure their roles in order to make best use of their individual strengths.
In Sony's foreign subsidiaries, HR managers spend time with executives and employees, linking the firm's objectives and strategies to employee capabilities, Senior managers identify key jobs for realising the firm's objectives, and analyse whether they have the best people in the most strategically important jobs and what talents they need to acquire.
When Sony Europe had to reinvent itself, HR managers focused on identifying and leveraging the key strengths of managers and other employees as a means of enhancing corporate performance. The firm introduced mentoring projects that encouraged employees to focus on what they do best and max-imise their contribution to increasing the firm's performance.
Training and talent development
Sony offers management trainee programs for its most promising recruits. Trainees are counselled to do what they are passionate about and find ways to use their talents to advance the firm. They complete formal courses and training, increasingly tailored to individual demands and career aspirations. The firm established a mentoring and coaching network across all its talent pools. Executives coach their potential successors who, in turn, act as mentors to younger upper-management candidates.
Sony is putting more emphasis on developing global managers and ensuring succession planning for top management jobs. Senior management grooms executives with strong analytical and intellectual qualities who are driven and not shy about taking risks. Programs stress strong people skills and the ability to interact with and influence others. The firm's senior leadership development programs emphasise visionary leadership and leading with emotional intelligence.
Sony implemented an extensive talent pipeline running vertically through the organisation, developing and supporting high-potential employees from entry level all the way to senior levels of the firm. Management has a system of exhaustive interviews and assessments for identifying potential talent within Sony's own ranks. Executive fast-track candidates must be fluent in English and two other languages, have significant international experience and possess the drive and ambition to take on international leadership roles.
Senior managers are required to continuously scan the employee pool in order to identify and groom potential talent. Recently the firm, long bound by its Japanese culture, has launched initiatives to groom more English-speaking executives as a way to transform itself and remain on the cutting edge.
Corporate social responsibility
Sony pursues an 'integrity approach' to foreign manufacturing operations and attempts to maintain workplace standards that
exceed local requirements. As the firm expands internationally, management knows that actions today may be crucial for entry to new markets tomorrow. Exploiting low workplace standards in one country can ruin a reputation and jeopardise entry to new markets. Sony learned a lesson from its experiences in Mexico, where human rights groups accused it of violating workers' rights to organise and associate freely.
Managers appear to have learned that simply doing what is required by the standards of the host country can result in inconsistencies in the firm's operations. The result may be fragmentation and difficulty in establishing effective quality control. The firm has taken steps to standardise workplace norms so that management can benchmark internal performance, transfer expertise between countries and provide coherent management to worldwide operations. It is attempting to establish a universal standard of employment, offering superior working conditions and locally relevant wages and benefits at all locations. Managers want to ensure that wages in foreign factories provide a fair standard of living to all workers.
Case questions
1. Traditionally, Japanese MNEs followed an ethnocentric orientation in international staffing, in which managers from headquarters hold key subsidiary positions. Sony is shifting away from this model. What approach should Sony follow for staffing its subsidiaries? When recruiting expatriates for foreign operations, what characteristics should Sony emphasise to ensure that its managers are adept at living and working overseas?
2. Sony faces challenges in finding suitable talent for its operations in China and Europe. What steps should it take to ensure it has an adequate pool of international managers and other talent for worldwide operations? What should Sony do to promote global mindsets
3. What is your view of Sony's training efforts? What steps could Sony take to improve its training in light of its multi-country operations?
4. Sony has experienced labour relations problems in Indonesia and elsewhere. What strategies should management follow in order to improve labour relations? What can it do to reduce the number and severity of labour difficulties that the firm might face in the future?
5. What is your view of Sony's efforts at corporate social responsibility [CR) in international operations? What steps can Sony take to improve CSR in organising and managing its operations around the world, particularly in developing countries and emerging markets?