SONY'S Governance Pformation In World Class Enterprises

As a pioneer in the internationalization of products and corporate governance in Japanese enterprises, SONY's entrepreneurial and governance pformation process is very worthy of our learning and reference.

Tokyo Communications: Entrepreneurship with dreams

Jing Shen Da (1908 - 1997), founder of SONY, entered PCL company after graduating from university in 1933.

In 1945, well founded the Tokyo Communications Research Institute. The business was to make radio repair and pformation, and then developed electric rice cookers and vacuum tube voltmeters.

In 1946, well decided to reorganize the Institute into a joint stock company, and invited Akio Morita, a teacher of Tokyo Institutet of Technology (1921 - 1999) to join.

Akio Morita is the eldest son of Shenda who has been in the wine industry for 300 years. He should have inherited his family business. But he was granted permission from his father to start a business together with Jing Shen Da.

In May 1946, Tokyo communications industry Co., Ltd. (joint stock company) was established for the purpose of research and manufacture of telecommunication equipment and measuring instruments.

The great well father-in-law, the former father-in-law, served as the president of the field, and he was 38 years old and director of the technical department. Akio Morita was 25 years old, and he was a specialist in charge of the business department.

The depth of the well lies in the ruins of Japan after the war.

Renamed SONY: in order to enter the world

In March 1955, when Tokyo communications developed the first generation pistor radio, it decided to use the "SONY" trademark to open the US market.

Akio Morita went to the United States with samples.

A big American company (cloth Loba watch company) offered to order 100 thousand units, but it would use the trademark of the US company because no one in the us knew "SONY".

But Akio Morita insisted on using SONY.

The other side said, "who will know SONY? It took us 50 years to become a world famous product."

Akio Morita replied, "how many people knew your company's name 50 years ago?

Our company, like your company 50 years ago, is now just taking the first step in 50 years.

50 years later, we will also make SONY as famous as your company, so this business can't be reached. "

In 1958, Tokyo Telecom was renamed SONY AG.

At that time, Tokyo communications tape recorder accounted for 91% of the Japanese market share, for the Japanese speaking, Tokyo communications is a very common name.

But Akio Morita, who wants to turn the company into a "world business from Japan", insists on renaming, because Tokyo communications plate into English pronunciation and meaning are very obscure.

For questioning the purpose of renaming, Akio Morita's answer is "to enter the world".

Akio Morita insisted on the use of "SONY joint stock company" and did not agree with other industry qualifiers such as "Electronics".

From this point of view, Akio Morita is obviously more ambitious than Jobs. Jobs changed Apple computer company to Apple joint stock company after 31 years of establishment in 2007.

SONY

In 1955, Tokyo Telecom shares were listed on the Tokyo stock exchange OTC market, and 3 years later, they went to the East Exchange.

In 1961, the Japanese government selected and approved the first batch of 16 companies issuing the ADR from more than 100 applicants, and SONY was among the first to be questioned.

Other companies in the same group, such as Toshiba, Hitachi, Mitsui and so on, are old Japanese excellent companies founded before World War II. Only SONY was a newly established small business with only 900 million yen in capital after the war.

But SONY actively seized this opportunity.

In February 1961, SONY board decided to issue new shares, of which 2 million shares were sold in the form of ADR.

Akio Morita realized that the "indirect finance" method adopted by the banks before borrowing and running the enterprises has been out of date and must be independent from banks.

This goal can be accomplished through the securities market, and not limited to Japan, and we can raise funds worldwide.

In June 1961, SONY ADR landed in the United States as the first Japanese ADR.

In 1964, SONY issued 3 million shares of ADR.

In 1965, SONY issued 500 thousand shares to IBMD, leading to the forefront of Japanese enterprises' introduction of foreign capital.

In September 1970, SONY became the thirtieth foreign company officially listed on the NYSE, and first of the Japanese companies listed on the NYSE.

On the day of the press conference, Akio Morita said, "this listing is the first step for SONY to become a global company.

We also want to go public in Europe to make SONY a world based company.

By 1977, SONY stock had been listed on 18 stock exchanges in 10 countries, and almost every day, SONY shares were traded on an exchange.

SONY has achieved internationalization synchronously in two aspects of products and shares.

After taking the lead in the US market, SONY's shareholder diversification and decentralization have always been the leading level of Japanese companies.

From Dei Nobuyuki to Stringer: Governance Reform under the leadership of professional managers

There were 5 presidents in the first 50 years since Dei Nobuyuki was founded in 1946 to take up the presidents in 1995, but well sham and Akio Morita have been leading the company in real time, and the company is in the stage of Founder management.

Since 1995, well sham and Akio Morita have quit management. Under President Akio Morita (CEO), Oga Norio has been president of Oga Norio for 12 years, and Dei Nobuyuki is the president.

Dei Nobuyuki joined SONY after graduating from university. He was sent to Europe for 10 years in 1960 and 1970s. He served as the head of SONY's audio, computer and VTR headquarters in 1980s, and served as the company director in 1989.

Nevertheless, Dei Nobuyuki took office as president, which still shocked the Japanese business community: there are 14 predecessors in front of Dei Nobuyuki, which is very "unreasonable" in terms of seniority and Japan.

Learning economics is the first non entrepreneur and non-technical leader of SONY, who relies on technology and life.

SONY was caught up in the financial dilemmas brought about by over expansion, and the probability of surviving was no more than 50%.

SONY did not introduce CEO from IBM, or HP, when it needed to be radically changed. Instead, it promoted internal promotion.

Although Dei Nobuyuki has been playing the role of "playing the opposite role" within SONY, it will inevitably face enormous resistance and can not be drastic reform without regard to foreign CEO.

In addition to introducing new performance indicators such as EBITDA (interest before taxes, taxes, depreciation and amortization) and ending DVD format disputes and other financial and business strategy initiatives, Dei Nobuyuki reformed SONY's corporate governance mechanism.

First of all, SONY's most important overseas company, SONY America, focused on strengthening the management mechanism reform of SONY's effective management and supervision of its subsidiaries, including forcing the resignation of the US president, setting up a board of directors with external directors, and delineation of the right boundaries between SONY and American companies.

In terms of governance reform, we can say that Inobu No has continued and further enhanced the "internationalization" practice that SONY already existed.

Since its ADR launch in 1961, SONY has been leading the way of introducing European and American governance practices in Japanese companies.

SONY started to set up external directors in 1970, and CEO was formally established in 1976.

Akio Morita took over as president in 1971. After 5 years' presidency, the president took over from Iwama Kazuo, and Akio Morita became president and CEO, while the president was equal to President and COO.

In 1997, SONY reduced the board of more than 40 people to 10, of which 7 were executive directors, 3 were external directors, and the board's pay Committee and nomination committee were set up.

The reform of the board of directors of SONY opened the trend of the independent reform of the Japanese company's board of directors, and the new Japanese commercial law, which was revised in 2003, confirmed the type of company with a new governance structure.

In 2000, Oga Norio was 70 years old and required to retire from the presidency according to SONY regulations.

Dei Nobuyuki pferred to the presidents and CEO, Ando Kuni served as president and president.

In 2005, when Dei Nobuyuki retired at the age of 70, he chose Stringer to take over as president and CEO and Nakahachi Ryoji as president.

Stringer was born in England in 1942. He joined American citizenship in 1985. He was president of Columbia company in 1988. He was president of SONY United States in 1997.

In order to completely leave, Dei Nobuyuki himself accepted the title of "top Advisor" and persuaded his generation of companies to withdraw from the elderly to give free play to the new generation of leaders.

Stringer has been in charge of SONY for nearly 5 years.

At present, 12 of SONY's 15 directors are non-executive directors.

Besides Stringer, there are two British Americans, Peter Bonfield (British Telecom CEO) and Roland A. Hernandez (Termo Monte CEO).

In addition, there is a Chinese Xie Zhengyan (McKinsey senior partner) and a woman Chinaga Yukaishiko (Japanese entrepreneur).

Other members include Zhangtomi Shio (Chairman of TOYOTA) and so on.

From a global comparison, the board of directors and the top management team of Japanese enterprises are the most closed ones in the main developed countries that generate global companies. SONY can be said to be one of Japan's exceptions.

Akio Morita's spiritual legacy

In 1998, Akio Morita was selected as the only Asian among the 20 most influential business people in twentieth Century.

From the founding of Tokyo Communications Research Institute, Akio Morita is the seventh followers. So, as the founder of SONY, Akio Morita has always been in the deep well.

But from the actual development of SONY, we can say that Akio Morita is the most important founder.

Akio Morita has published the book "useless education" and "made in Japan" and other books, which aroused strong repercussions.

SONY focuses on technology, but does not pay attention to education and origin.

Beginning in 1991, when SONY recruited the graduates, the applicants' Graduation schools were hidden in the application form.

SONY is also a pioneer in Japanese companies employing experienced and expatriates, and sees it as a way to strengthen companies through the introduction of allogeneic blood.

In 1980s, when Japanese companies dominated the world, Akio Morita and others co wrote "the Japanese can say" no ". In 1987, at the Japanese gathering in New York, Akio Morita put forward that" the United States should further learn from Japan ".

But in 1993, Akio Morita's last speech was "we need to learn from the United States again."

SONY has developed through ingenious introduction of American technology and finally surpassed the US in 80s.

However, we must not be satisfied with this.

Today, we still need to learn from the United States once again.

SONY's two founders, sham sham and Akio Morita, are focused on technology, one is good at the market, and at the same time have the ambition of "basing themselves on Japan to the world" and "free to choose talents". This is probably the essential factor for all successful entrepreneurs and successful pformation enterprises.