Sony, the Japan-based multinational conglomerate, is one of the leading manufacturers of consumer electronics devices and information technology products. In the late 1990s, it lost its leadership position in many product lines in which it was operating. Moreover, Sony's growing complacency led to it's failing to recognize the growing popularity of new technologies and digital products and the company chose to stick to its proprietary formats. It was caught off-guard and tried to revive itself under the guidance of its first non-Japanese head, Howard Stringer, who took over as the CEO in 2005. For a couple of years, Sony appeared to be on the path to revival. In February 2009, with the aim of addressing the issue of its silo culture, Stringer announced a reorganization that involved changes in the organizational structure. Through this reorganization, he sought to transform Sony into an innovative and agile company.

In May 2009, Japan-based multinational conglomerate, Sony Corporation (Sony) announced that it had posted its first full year operating loss since 1995 and only its second since 1958, for the fiscal year ending March 31, 2009. Sony announced an annual loss of ¥98.94 bn; with annual sales going down by 12.9% to ¥7.73 tn (Refer Exhibit I for Sony's consolidated statements of income and Exhibit II for Sony's balance sheets for the financial years 2005 to 2009). The company, which had reported a net profit of ¥369 bn for 2008, also warned that with consumers worldwide cutting back on discretionary spending in light of the recession, the losses could touch ¥120 bn for the year ending March 2010.

Sony had been a dominant player in the global consumer electronics industry since its inception in Japan in 1946. Over the years, it had introduced some pathbreaking products including the Walkman and the PlayStation. However, by the early 2000s, it had lost its leadership position in some of its key products like televisions and media players. In fiscal 2009, almost all its product lines were reporting losses (Refer Exhibit III for operating income/loss by business segments of Sony Corporation). Analysts attributed the losses to its `silo culture,' which came in the way of cooperation between the different divisions in the company. This resulted in Sony failing to bring out innovative products on time to suit the changing needs and preferences of consumers, though it had all the required competencies. Other reasons attributed for the losses included economic recession in Sony's key markets and the appreciating yen against major currencies.

HRM Review Magazine, Sony Corporation, Consumer Electronics Devices, Information Technology Products, Global Consumer Electronics Industry, Economic Recession, Business Segments, Japanese Company, Business Development, Creative Strategies, Global Recession.