Sony CEO has firm grip on power
February 28, 2009
Tokyo - Sony announced on Friday a business overhaul and management reshuffle that will tighten chief executive Howard Stringer's grip on power at the high-tech giant, which is facing its biggest ever loss.
Sony said president Ryoji Chubachi is stepping down and will be replaced by Stringer, who will also remain chief executive and chairman.
"Today in Sony, we have two distinct challenges," Stringer told a news conference.
"The first is of course, the global slowdown and economic pressures facing so many companies, not only in America but also in Europe and Japan," he said. "The second challenge is the evolution of our competitive environment.
"We have been grappling with an intense competitive shift taking place in the consumer electronic landscape," he said.
Stringer, a Welsh-born American, vowed to unite Sony's warring divisions after becoming the first foreign chief at one of Japan's most famous companies in 2005, but he has apparently faced resistance from the company's old guard.
He hinted as much on Friday, saying there was no need for "another layer" between himself and his top managers.
The former television journalist wants to meld the company's strengths in televisions and other gadgets with its games and movies.
The boardroom shake-up "is aimed at integrating management so that it can clarify responsibility, which used to be separated between Japan and North America," said Hiroshi Sakai, an analyst at SMBC Friend Research Centre.
"I see it as a positive move as Sony will be able to simplify the decision-making process. The future of Sony depends on how to revamp its electronics division," he said.
Sony, the inventor of the Walkman, is undergoing drastic restructuring - including 16 000 job cuts - in the face of the economic slump and competition from rival products such as Apple's iPod music player and Nintendo's Wii.
Sony said it would form two main business groups. One, focusing on "networked" entertainment products including the popular PlayStation consoles, will be headed by Kazuo Hirai, chief of the group's game division.
The other, which will oversee electronics products such as home audio and video devices, will be led by Hiroshi Yoshioka, president of the TV business.
"This reorganisation is designed to transform Sony into a more innovative, integrated and agile global company with its next generation of leadership firmly in place," Stringer said.
Chubachi will become vice chairman and also oversee product safety and quality and Sony's environmental policies.
Sony in late January reported a 200-million-dollar operating loss for the fiscal third quarter, blaming weak sales of electronic goods amid the global economic downturn and a stronger yen.
The company at the time said it was headed for its biggest ever operating loss in the full financial year to March.
Sony, which makes Bravia flat televisions, Cyber-shot digicams and PlayStation 3 video game consoles, is shutting about 10 percent of its manufacturing sites and downsizing or withdrawing from unprofitable areas.
The electronics icon has endured a difficult spell in the face of tough competition from rival products such as Apple's iPod and Nintendo's Wii. - AFP
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