Page 288 - Introduction to Business

262 PART 2 Managing Business Behavior

Case in Point

Sony: Preparing Tomorrow’s Leaders

Ken Kutaragi, president and CEO of audacious, Sony’s corporate history shows that the
Sony Computer Entertainment, is cred- company often encouraged its potential leaders to be
ited with building Sony Corporation’s visionaries who could say and do what they wanted,
$8 billion world-class video game business from of course within reason. Many competitors and
scratch. His strategy, which is being emulated observers alike consider these traits the main reason
throughout Sony, was to use low-margin hardware to Sony remains one of the world’s most-admired and
sell high-margin software. Although the creator of the successful technology companies.
Playstation and its derivatives, which are hits with Now Sony is embarking on its logical next step by
consumers globally, Kutaragi bears a heavy burden trying to develop a super microprocessor that would
on his shoulders as he strives to lead Sony’s domi- integrate its audiovisual and broadband networks
nance in the convergence of three technologies, con- more closely with its hardware and software busi-
sumer electronics, multimedia, and software, to ness—a job cut out for Kutaragi. The challenge that
develop the next generation of world-class Sony Sony faces as it moves to the future is trying to strad-
devices. Sony’s chairperson, Nobuyuki Idei, would dle the consumer electronics, software, and media
like to see Kutaragi lead and transform Sony because sectors against competition from other giants like
of his unparalleled success with video games. He Samsung, Microsoft, and Time Warner. If Kutaragi
believes that the highly driven Kutaragi is the right generates another hit, he may end up running the
person for the job and could soon lead Sony to com- entire Sony Corporation soon after.
manding heights.
Source: Sony Corporation, http://www.sony.com/SCA/index.shtml;
At a major corporate meeting in 1999, Kutaragi, in “The Best Managers,” Time, January 13, 2003, p. 64.
un-Japanese manner, stunned his audience by declar-
ing that it was time for Sony’s old managers to step
Questions
aside and allow young up-and-coming executives to
take over Sony’s leadership. Kutaragi believed that a 1. What is the leadership style that is practiced at
sea change was taking place in their industry and the Sony Corporation? Substantiate your answer.
future was moving toward a system of consumer 2. What is Ken Kutaragi’s track record as an
electronics linked by wireless and Internet networks. executive? Why is he likely to lead Sony
Although many at the meeting thought Kutaragi to be Corporation in the not-too-distant future?

the sense of being closely involved in the decision-making process and its conse-
quent impact on corporate goals. Typical examples are assembly line work and
teamwork of various kinds. Again, there may be some employees who feel this style
is a joke, since managers try to acquire ideas from employees only to follow their
own predetermined directives. These employees are cynical of management’s
motives and believe that managers are basically “going through the motions” to
keep employees motivated.
Professionals love the free-rein leadership approach since it clearly defines the
final objectives while at the same time it provides them with flexibility to do their
jobs as they see them. Yet, there are others who dislike the free-rein approach since
they get a feeling of abandonment, that management does not care what they are
doing or how well they are doing it. They miss the ongoing feedback and encour-
agement of how well they are performing. As you can see, regardless of the leader-
ship style, the effectiveness of any particular management style crucially depends
on its impact on employee morale, motivation, and performance. Much also
depends on employee diversity in education, culture, gender, race, and nationality.
A second reason why an honest, nonconformity style of management is pre-
ferred to conventional management styles comes from the manager’s perspective.

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