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28951Downloads1 I Published: 15 Mar ,2017
The contemporary issues refer to those ideas, thoughts or current topic that is in question or dispute to the present day. The main objective of discussing contemporary issues is to find out solutions to the present problems and facilitate change. For this aspect, organization can take assistance of change management. It is an organized approach that is used for dealing with change in the context of organization as well as individual (Anderson & Anderson, 2010). To ensure continuous progress and to survive in the long run, it is important for the business entity to make changes that are corresponding to modification in business environment. In the present report, various aspects of change management in Sony Corporation will be studied. Sony is a giant conglomerate that was found in Japan by Akio Morita in 1946. The company has expanded its operations in several countries by offering valuable services with regard to consumer electronics, financial services, media, cell phone and other digital products and services. The firm is also listed at 116th rank in the list of Fortune Global 500 Best companies (2015). In the present report, by considering the provided case scenario, contemporary issues faced by Sony will be discussed. With the help of Kurt Lewin’s model, various forces that drive and restrain changes in company under study will be described (McMurray & et.al., 2010).
From the provided case scenario, it is clear that company is going through downturn where its sales are dropping. Further, in 2014, Sony was incompetent to declare the dividend to its shareholders (Appelbaum & et.al., 2012). Thereafter, the global market share of company has also declined to 3.1% as compared to last year that is 4%. Further, the organization is also suffering with a net loss of ¥230 billion and operating loss of ¥26.5 billion. However, it has been identified that main reason for the downfall is due to intense competition faced by company with Samsung, Apple and other Chinese company like Xiaomi, Lenovo and Huawei. Thereafter, Sony is also facing disadvantage of entering late in Smartphone market. Therefore, it is becoming crucial for business entity to conduct restructuring that will further ensure its survival in the future. In this aspect, Sony can take assistance of change management approach that will facilitate change and restructuring. Therefore, organization can take the help of Kurt Lewin’s approach in terms of Force field analysis. The description of this is as follows:
Kurt Lewin’s is psychologist who developed a three stage change model that facilitates change (Graetz, & Smith, 2010). The main objective of this model is to provide guidance to the manager of organization for facilitating and implementing change, for employing new processes and re-allocation of tasks and duties. However, the model states that change is only possible for making changes in behavior, learning and working styles of employees. The three stages involved in change model are unfreezing, movement and refreezing (Kurt Lewin’s method of change, 2014). The unfreezing refers to procedure with regard to identification of new methods and processes so that employees would let go the traditional working style that was unproductive for business. It is an important concept that helps in overcoming the problem of change resistance in organizational members. Thereafter, movement with regard to procedure of change in thinking, belief and behavior of employees is productive and profitable for business. Thereafter, refreezing refers to implementing the change as a new custom so that it would transform into standardized functioning procedure for the organization.
Considering the change model developed by Kurt Lewin’s, force field analysis of Sony’s current situation can be done. The force field analysis will help in determining the factors that are leading to change and those restraining change in business under study. The description of this is as follows:
Technology: Since, it is alleged that due to late adoption of technology, Sony is facing downturn; therefore, it is important for company to make changes in its technology and processes (Vahs & Weiand, 2010). The up-gradation of new technology and processes will help company in rebuilding its market share and position. The firm can use its technical competence in terms of miniaturization that will assist company in designing thin, compact and elegantly styled cellular devices. Further, Sony can use the latest technology to develop sophisticated portable consumer electronics. With this aspect, company will be able to design new range of HD LCD, LED's, refrigerators, etc.
Innovative managers and executives: Sony can hire young individuals from top business schools or employees working in rival company. Thereafter, it can also take the help of creative ability and experience of its existing executives and manager that will give innovative ideas that will further assist the organization in designing new and stylish products and services (Grant, 2010). The creative ability and innovative thinking will give new direction to company that is likely to generate fruitful outcomes.
Workforce diversity: Being a global organization, Sony is operating in different countries and employ diversified range of individuals. Therefore, the human inventory comprising of diversified staff assist firm in understanding the local market and needs. Thereby, company is able to develop new products for meeting the demand of customers.
Research and Development: The intense market research and development will assist the organization in developing new technology and tools (Choi & et.al., 2011). The R&D will assist company in upgrading the present technology and in making modifications. These changes will further assist company in getting competitive advantage to organization.
Globalization: Due to integration of economies, company is constantly forced to make changes. The organization is not only facing competition from local company but also from international firms like, Apple, Samsung, Xiamoi, Lenovo, etc. Therefore, firm can monitor the strategies adopted by foreign company and align it with its strategy. This will help the enterprise in sustaining competition. Thereafter, company can develop new products and would enter in developing countries and expand its operations through assistance of globalization (Kleingarn, 2013).
Poor financial performance: The firm is running into losses, thus, the expected operating loss in March, 2015, was ¥26.5 billion thereafter, the net loss was ¥230 billion. Therefore, the poor financial performance of Sony is the major obstruction in its path of success. Therefore, company does not have enough funds to invest in research and development which is very important for facilitating change.
Internal crisis: Due to shortfall of revenue, company is not able declare dividends to its shareholders (Benn, Dunphy & Griffiths, 2014). Therefore, there is dissatisfaction among members and many shareholders are withdrawing their investments from company and Sony is losing its market share.
Change in expectations of employee: The expectations of employees are changing. They are not getting enough monetary rewards that are also obstructing their creative ability. Further, due to declining market reputation, company is also not able to hire new competent personnel for managing its operations and facilitating change.
Poor business decision: The joint venture of Sony with Ericson of Sweden is poor business decision taken by the management of organization. Therefore, huge capital of company is blocked in this joint venture. Ericson is also not generating profit and therefore, it is just a liability for the organization (Anderson & Anderson, 2010).
Market conditions: The firm is working in dynamic environment which changes rapidly. Thereafter, various political, legal, economic, social and environmental factors impact the functioning of Sony. These factors control the operational activities of organization in different manner and further, restrain the ability of company to adopt new changes.
Hence, there are many factors that facilitate change and those that restrict the change. However, to restructure its operation and thereby, to enhance the market performance and productivity, it is important for the business organization to implement the identified changes. Further, these changes will assist company in developing new position in the market and to survive in the long run.
Since inception, it is clear that company is going through bad economic downturn and it is becoming crucial for the organization to implement changes. Therefore, firm is also planning a corporate restructure in this respect (McMurray & et.al, 2010). The restructuring will assist Sony in developing a new image in the market and in enhancing proficiency and productivity. The corporate restructure will further assist organization in improving its falling market share and negative cash flow. However, to facilitate change, Sony needs a leader with dynamic personality that will help in implementing new change. It is identified that individuals normally restrict changes and therefore, to facilitate the change, leader will play an important role. Effective and efficient leader will help in resolving the problem of change resistance in members. Further, leader will also boost the morale of members and that stimulate them to attain the goals of organization (Graetz & Smith, 2010). Thereafter, company has reduced the staff and cutting salaries and other incentives provided to employees. The effective leader will help in overcoming the insecurity faced by existing employees of Sony. Furthermore, the key characteristic that are required in the prospective change leader of organization can be further explained as follows:
Good motivation skills: The leader should have strong motivating skills that will assist him in encouraging the employees of Sony to work hard for the success of organization. Since company cannot afford to give monetary incentives to employees for their outstanding performance, a good leader will make an effective use of non monetary incentives and motivational power to influence employees to attain the overall goals of business enterprise.
Communication skills: It is important for the leader to communicate effectively with the members. Therefore, leader will represent the organization in world outside the organization. Therefore, it is important for the leader to have strong verbal and written communication skills. These skills will also help leader in understanding the needs of workforce.
Organization skills: Since the resources of Sony are limited, effective leader will assist in optimum allocation of resources. Thereafter, organizational skills will further assist the leader in making effective business strategies and plans that will help in improving the performance of company (Vahs & Weiand, 2010).
Influencing skills: It is the key factor that is very important for the change leader. The change leader will help in influencing the organizational members to adapt to the changes proposed by management. Therefore, to manage the change in organization, leader will gain confidence from members and thus, encourages them to adapt the organizational changes. Influential skills will further help the leader in inspiring employees to work hard to accomplish the goals of organization (Grant, 2010).
Flexible and Facilitator: The change leader should be flexible himself so that he can adapt itself first with the changing business environment and need. Thereafter, he will be able to adapt the changing policies, market conditions, etc. Further, change leader should be a strong facilitator so that he can assist staff members in understanding the objectives of company. Therefore, change leader plays an important role in facilitating the change.
Responsible: The leader should understand its responsibility towards company. The leader should be responsible and ensure that other members also understand their duties. Further, he should understand the reason for which company has hired him and therefore, attain the overall goals of Sony (Choi & et.al., 2011).
Innovation skills: It is important for the leader to have creative thinking so that new strategies can be designed for the organization. Further, innovation skills will assist the leader in finding new and innovative ways of proposing changes in Sony.
Risk takers: The change leaders should possess capability to handle the risk involved in the process of implementing change. Therefore, it is important for the leader to consider its duty of facilitating change as new challenge will enhance the growth opportunities for Sony and they amend the role of leader in organization.
Valuing the human resources: It is required for the change leader to acknowledge that human inventory of Sony is the greatest asset and only they can help the leader in bringing change in organization (Kleingarn, 2013). Therefore, it is very important for the leader to value the significance of human resources. Further, he should also realize the same value to employees so they would understand that they are the important part of organization. This will further help in inculcating the sense of belonging among members.
Action orientated: To ensure the adaptation to changes, it is important for the leader to be action oriented so that he can smoothly attain the goals of business enterprise. Therefore, it is important for the leader to take new challenges that will modify the operations of Sony and ensure its success.
Empathy: Change leader should have the ability to appreciate other workers. Therefore, change leader should appreciate the creative ideas, fruitful suggestions and knowledgeable advice given by workers or organizational members (Benn, Dunphy, & Griffiths, 2014). Therefore, leader should not consider himself to be superior and develop sound listening skills that will assist him in considering the viewpoints of others.
Therefore, an effective change leader having aforementioned characteristics will not only assist Sony in implementing change but also support the employees and workforce that are likely to get affected by the proposed changes. Further, it will encourage the organizational members to adapt the changes and attain their personal goals with the overall objectives of Sony.
It has been identified that Sony is struggling badly with innovating new products. Many of the products developed by company are failed. Tablets and Walkman produced by Sony were big flop, thereafter, laptop VIAO also failed. In addition to this, many products of Sony Ericson also failed in the market as customers could not get value for the money paid. The major reason for the failed mobile sets is that company was unable to make effective innovation and to provide new attributes to its customers (Change management in Sony, 2010). The customer's complained regarding slow operating system, software and battery issue. Further, some handsets from Xperia range also faced the problem of camera and display. Therefore, the dissatisfaction among customers is high. Therefore, lack of innovation and falling ability of company to inspire people are some reasons for the falling market share of company. Therefore, it is becoming crucial for Sony to make change in technology. This will further help company in improving its innovating competencies. Thereby, firm will be able to develop new products and services (Characteristics of Change leader, 2010). Therefore, company can adopt new methods that will assist company in creating innovation in their organization.
Corporate Social Responsibilities can be defined as the responsibilities of an organization towards society. Moreover, it can also be depicted as the continuing commitment by company to contribute for the economic development while improving the quality of life of employees and their families along with the lifestyle of community and society at large (Caroline, 2010). In other words, CSR can be defined as the voluntary activities undertaken by enterprise in order to operate its business in an economic, social and sustainable environment. There are different ways through which CSR can be promoted in which the most common way is of using those materials for the manufacturing of a product which harm the environment less. Further, land, air and water pollution should not be done by companies while manufacturing and decomposing the wastage created by production of goods. Moreover, firm can bring those products which can contribute in the protection of environment that is reusable and recyclable and also, the Eco-friendly and organic products.
In the present world, any organization cannot survive if they are not responsible towards the society in which they are operating its business activities. It is because, the customers who are a part of society will not accept their products until and unless the organizations are responsible for their welfare (Manning, 2013). That is the reason because of which it is very important for the organization to become socially responsible in order to get success in the competitive environment. There are several benefits for company if they adopt the activity of corporate social responsibility. Some of the advantages are discussed as follows:
Innovation: Company can get many opportunities for doing innovation in products and can become the most innovative firm. For instance, an organization can introduce such electronic products which use less battery and thus, through this, electricity can be saved. This is also a kind of CSR which will help company to bring innovation in the products (Arthur and et.al., 2007).
Cost-Savings: If organization would not be keen towards the adoption of CSR then the products which are manufactured will not be purchased by the customers and thus, it will lead to the wastage of production and all the products will get decomposed. However, it will lead to the losses for company. On the other hand, those firms which are producing goods by consulting the customers and concerning about the issues of buyers, there will be fewer chances for the modifications and thus, goods will be manufactured at lower cost which will eventually save the cost of organization (Moir, 2001).
Employee Engagement: If the firm is responsible for enhancing the quality of life of people or workers and also, for improving the life of their families then support of employees will be more. Those employees will be highly motivated and they will engage themselves completely in the production and thus, they will perform in an effective manner.
Customer Engagement: Firm that is responsible towards society; it can easily get engagement from the customer's side. Buyers will buy more products of company than its competitors which will lead to the generation of more profits.
Benefits of CSR lead to the creation of competitive edge to company. It is true that CSR is becoming more important source for enhancing the competitive edge for the organization. Basically, competitive advantage can be created by introducing differentiated products, employing highly skilled people, doing Corporate Social Responsibilities, etc. The major factor contributing in the creation of competitive long term position is CSR because until the customers will purchase the product, company cannot bring competition in their business (Potluri, Batima and Madiyar, 2010). This is the reason, it is being said that CSR plays major role in the creation and maintenance of competitive advantages for Sony Corporation. Moreover, if the firm is producing goods which are Eco-friendly, recyclable, benefit the customers and highly society acceptable then this company will be highly differentiated from its competitors. This will create the mindset of customers that this organization is keen towards CSR. Thus, buyers will buy more products and thus, company will generate more profits and also they will bring more innovative products which will satisfy the needs of customers at its best (Kotler and Lee, 2011).
Sony is highly responsible towards society and they have adopted many ways in which they can contribute for the welfare of society (Gottschalk, 2011). There are some of the recommendations which have been suggested to Sony Corporation for enhancing the level of CSR which are described as below:
From the above report, it can be concluded that in order to survive in the long run, it is very much important for company to do corporate restructuring. Kurt Lewin’s method of change will assist company in employing change in the organization. However, there are some factors that restrain the firm from implementing change. Therefore, proper steps should be identified by Sony to overcome the change restraining factors. Further, by appointing an effective change leader, company can easily overcome the problem of change resistance among employees. Thereafter, for innovation, firm can use the latest technology, creative human resources, flexible structure and intense market research.
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