The purpose of this Assessment is to evaluate how well you as a manager apply the theory
learned in the course to a real-life scenario where problems need to be solved. Your
reasoning, problem solving and decision making skills will be assessed.
You are to choose between two case studies in your text – the integrated case study – The
Creation of Sony on page 408
Source material/ Questions
“The creaTion of Sony
context of post-war Japan: ‘We must avoid problems which befall large corporations … While we create and introduce technologies which large corporations cannot match. The reconstruction of Japan depends on the development of dynamic technologies.’ On 7 May 1946, 38-year-old Ibuka and 25-year-old Morita founded Tokyo Tsushin Kogyo K.K. with 20 employees and initial capital of 190 000 yen.
The early beginnings of the company were marked by scarcity and resourcefulness. In an economic context of scarce access to investments, the company could not afford to purchase its own equipment, and Ibuka and his engineers had to make their tools themselves. ‘Beginning with soldering irons, they made screwdrivers from motorcycle springs fished out of the war ruins. They constructed their own electrical coils and substituted telephone cables for electrical wiring in their trial products.’ The new company had no machinery and little scientific equipment. While the years of scarcity brought strong material constraints, it also fostered the spirit of innovation and excitement that was so important to Ibuka.
The company’s first real break-through was the acquisition of a patent licensce for transistors from Bell Laboratories. In the early 1950s, Ibuka went to the United States and saw the potential for transistors to be used in communication devices. At a time when US companies focused on the military applications of the transistor, Ibuka understood that it could be a replacement for the bulky vacuum tubes that were used in radios. Ibuka and his team of engineers developed the production methods that enabled the emergence of a new consumer product, the transistor radio. Mass production of transistor radios began in 1954. In 1957, Sony innovated further when it released the world’s first portable transistor radio, establishing a market leader position for the company.
During that time, Morita was determined to establish the Sony brand. During a visit to the United States in 1957, he rejected a purchase order for 100 000 new transistor radios from a large US distributor, the Bulova Corporation, because Bulova would sell them only if the radios carried the Bulova brand name. Akio Morita refused the offer because he believed that building Sony’s brand name was more important than a large sale. Morita is said to have answered to Bulova: ‘Fifty years from now, I promise you that our name will be just as famous as your company name today.’ It was also during this journey to the United States that Morita decided that the company name should be changed from Tokyo Tsushin Kogyo to one that was easier to pronounce and recognise. The two founders identified a name that would be understandable around the world while transmitting an image of youthfulness and invention. The name ‘Sony’ comes from the Latin word ‘Sonus’ (sound) and it resembles the word ‘sonny’, which means little son. ‘The words were used to show that Sony is a very small group of young people who have the energy and passion toward unlimited creation.’ He also chose to write ‘Sony’ in the katakana ‘alphabet’ (a Japanese ‘alphabet’ that is normally used to write foreign names). This change of the company’s name meant a departure from its Japanese origins and paved the way to its global recognition.
Joeri Mol, THe UniversiTy of MelboUrne and eric QUinTane, UniversiTy of lUgano The Sony Corporation was founded as the Tokyo Tsushin Kogyo (Tokyo Telecommunications Engineering Corporation) by Akio Morita and Masaru Ibuka in 1946. Through technological vision and marketing astuteness, Morita and Ibuka created an organisation that became one of the world’s most valued brands, with a reputation for creativity and innovation.
Morita and Ibuka formed a partnership to which they brought complementary skills. Ibuka focused on the development of new technologies and products, while Morita led Sony into becoming an organisation with a global presence. Both also contributed to the unique spirit of Sony by taking the Japanese company in unusual directions for their time, creating new products rather than copying Western technology and focusing on creating a brand name that would be recognisable beyond post-war Japan.
The establishment of Sony as a worldwide household name is largely attributable to Akio Morita. The elder son in a traditional Japanese sake brewing family, Akio was being prepared to inherit the centuries-old business. During his childhood, Akio often accompanied his father to company reunions and board meetings and would be regularly involved in the family business. However, his interests lay with mechanics and electronics, and he obtained permission from his father to study science instead of economics at the Osaka Imperial University. Upon graduation, as Japan was engaged in the Second World War, Morita was assigned to the naval Office of Aviation Technology, where he met Masaru Ibuka. At the end of the war, Morita was about to engage in an academic career as a faculty member of the Tokyo Institute of Technology when he discovered that Ibuka had founded a research laboratory. Morita went to see Ibuka in his laboratory in Tokyo and they decided to start a company together.
Akio Morita was a marketing visionary, while Masaru Ibuka’s technical skills and flair complemented Morita’s talent. During his studies at the School of Science and Engineering at Waseda University, Ibuka was given the nickname ‘genius inventor’. His vision for products and technical developments enabled him to foresee potential new markets and applications for products in everyday life. Beyond technical talent and intuition, he also strived to create an environment in which employees could gain satisfaction and pleasure from their work. From the start of the company, he instilled in his engineers ‘a quest for innovation and pushed them to reach beyond their own expectations’. He fostered a fun, dynamic and exciting workplace with an open-minded corporate culture. These traits were deeply ingrained in the company’s culture and enshrined in a set of rules known as ‘the founding prospectus’. These rules highlighted Ibuka’s philosophy of fostering a workplace where engineers would be free to innovate in the
Organisational Behaviour, Emerging Knowledge / Global Insights, Fourth Asia-Pacific Edition
24/09/12 3:02 PM
Organisational Behaviour: Emerging Knowledge. Global Insights.
End of Part Case Studies PART 3 409
1. 2. 3.
What leadership competencies do you recognise in Ibuka and Morita Justify your answer. How were Ibuka and Morita charismatic leaders Justify your answer. Can you recognise the elements of transformational leadership Justify your answer.
Sources: Sony Corporation, Gentyu [The Origin], Tokyo: Sony, 1996, www.sony.net/SonyInfo/CorporateInfo/History/SonyHistory/1-01.html; https://news.sel.sony.com/en/corporate_ information/sony_brand.
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