The need for innovation and cross-dependencies among the departments is forcing organizations to restructure from divisional to functional organizational structure. This paper presents one such case wherein Microsoft and Sony carried out restructuring efforts to move towards a functional organizational structure when they faced cutthroat competition from other technology majors such as Google and Apple. Both Sony and Microsoft brought in major changes to their organizational design, engineering a greater collaboration among technologies and creating an organizational culture that is deeply embedded in collaboration, creativity, and innovation. The paper uses several financial, organizational, and other matrices to illustrate how organizations embracing creativity outperform their peers and competitors on key business performance indicators, such as revenue growth, market share, and talent acquisition.

The structure of an organization is an important determinant in the realization of a company’s strategy. Many organizations that are large and have multiple businesses have predominantly relied on the divisional form organization structure. Though this structure has yielded results in the past, of late, it has been observed that the structure is hampering an organization’s innovation capabilities. In order to foster cross-dependencies and make the organizations more nimble and innovative companies are forced to restructure organizations. To compete in the present business scenario, various companies are moving towards divisional products together. organization structures. These structures provide greater accountability, coordination and collaboration among the team when compared to a divisional structure. Collaboration within product teams leads to innovation in terms of new technology or innovative products. The executive chairman of Google summed it up succinctly mentioning that “innovation is the technological precondition for growth”. As David Burkus put it, “If creativity is within the grasp of every person, in every department or industry, and then perhaps the way we structure our organization should reflect that integration and make it possible for everyone to contribute his or her own creativity”.

Business Strategy, Organizational Restructuring, Collaborative Creativity, The group consists of Sony Corporation (holding and electronics), Sony Computer Entertainment (games), Sony Pictures Entertainment (motion pictures), Sony Music Entertainment (music), Sony/ATV Music Publishing (music publishing), Sony Financial Holdings (financial services), The Case of Microsoft and Sony.