Transcript Sony 2004 - HEC Paris

Gabriela Gaut
Philippe de Montenon
Marguerite Lassalle
Stanley Chan
Yoshitomo Shinji
Sony France
Best in France Case Study
September - December 2004
SONY’S CORPORATE INFORMATION
Foundation: May 7, 1946
Headquarters: Shinagawa-ku, Tokyo, Japan
Major Products:
Electronics
Game
Music
Pictures
Financial services
Others
Employees (Consolidated): 162,000 persons (as of March
31,2004)
Consolidated Sales and Operating revenue (2003):
7,496,400 million yen (aprox. 55,000 million euros)
WORLWIDE MANUFACTURING
ACTIVITIES
SONY – EUROPEAN PRESENCE
 Armenia
 Hungary
 Russia
 Austria
 Ireland
 Belgium
 Italy
 Serbia and
Montenegro
 Bulgaria
 Kazakhstan
 Slovak Republic
 Croatia
 Kyrgyzstan
 Slovenia
 Czech
Republic
 Latvia
 Spain
 Lithuania
 Sweden
 Macedonia
 Switzerland
 Moldova
 Tajikistan
 Netherlands
 Turkey
 Norway
 Turkmenistan
 Poland
 Ukraine
 Portugal
 United Kingdom
 Romania
 Uzbekistan
 Denmark
 Estonia
 Finland
 France
 Georgia
 Germany
 Greece
Sony has presence in 40 European countries
SONY EUROPE STRUCTURE
Source: Sony France
SONY FRANCE STRUCTURE
Sony France S.A.
Sales
RME
Ribeauvillé
(Domestic)
(Record Media & Energy)
Factory
Operation
Sales
Marketing
Business
DAX
Factory
Source: Sony France
SONY FRANCE – SALES
Sales in Billion Euros
Sony Worldwide
55
Sony Europe
13.5
Sony France
2.4
Sony Europe
20%
Sony France
4%
Rest of the
World
76%
WHY FRANCE?
Since he founded Sony, Mr. Morita has been advocating
the Global Localization policy which states that business
should be deeply rooted in the local society
Therefore, sales companies within Sony have to be
established near the customers
There is no other specific reason apart from the
Global Localization Policy that explains why Sony
started a business in France
PLANT LOCATION
As Sony France S.A. was established in 1973 Sony
received from the French government –both at a country
and at a local level– some economic incentives such as
reductions in “taxe professionelle”, custom duty
deductions, etc.
Such incentives had an important impact on the location
selection.
MANAGEMENT AND CORPORATE
CULTURE
In the RME business unit, the hierarchical positions are
filled in both by French and Japanese managers, being
the management style predominantly European.
PDG
Operation
Director
Sales
Director
Marketing
Director
Business
Director
French
Japanese
PERSONNEL COMPOSITION BY ORIGIN
French/European
Japanese
RME
92
8
Sales Division
548
2
• Sony France employs 2,600 people in its different offices and
plants
• Since Sony established its activities in France, the number of
Japanese people at the Sales Division was always lower than 10
• Japanese employees are regularly rotated (2-5 years) based on
their career development, their position and their performance
• Most French employees are transferred within Europe.
RELATIONS WITH WORLD
HEADQUARTERS
• Strong dependence in terms of product development
(all R&D function are located in Japan)
• Except OEM products, Sony Europe is not able to
develop European customer oriented products but
merely to sell products that Sony Japan prepares
CLIENTS IN FRANCE – RME division
Main RME products
• Memory Sticks
• USB storage media
• DVD tapes
• VHS tapes
• CD-Roms
• Batteries
Main Clients
• Supermarkets
(Carrefour, Auchan,
Monoprix, etc.)
• Department Stores
(Printemps)
• Specialists (Darty,
FNAC, etc)
Clients expect that Sony will keep providing products that they can
easily sell and that consumers demand
INTERNAL CLIENTS
The presence in France is undoubtedly indispensable to
satisfy clients’ demands.
From an internal point of view, the form of the
organization might be a possible drawback.
Generally speaking, once a company is established, it
has to trade with other Sony’s business units. Such trade
could sometimes require considerable efforts and be
inefficient.
For instance, to carry out the business in France Sony
could have only a representative office in France instead
of the current sales company.
COMPANY VALUES
Sony contributes to the local society by making it richer
both in material and spiritual terms through its products,
which clients expect at an appropriate price.
• In France, Sony contributes to the local society by
adapting to the French culture and generating job
opportunities.
•Internally, Sony considers that values should not be
installed, but created. In this aspect, Sony is completely
different from other Japanese firms such as Toyota.
CONSTRAINTS IN FRANCE
•While establishing itself in a foreign country Sony
always considers cross-cultural communication such as
language, sense of values, habits, religion etc. to be
constraints.
•In France, the pride of local people for their country and
national products is considerably high compared to other
European countries and it could be consider as a
constraint.
KEY CONSTRAINT COSTS
The key costs of operating in France are higher than operating in other
European countries, specifically in the following areas:
- Tax: Corporate tax is relatively high (35.4% in France vs. 19% in
USA)
- Labor cost: As annual working hours are relatively low, the unit labor
cost (salary/working hours) is consequently high. Labor-intensive
industries could not ensure competitiveness in France. Social Security
costs are also significantly high (45% vs. 18.7% in NY, USA)
- Dismissal: Dismissal requires long processes in France compared
with countries such as the UK. In France, it is impossible to dismiss
employees without economic reasons or breach of duty.
- Infrastructure: Information infrastructure was weak when Sony
France was established, but has been improved after significant
investment
HR PRACTICES IN FRANCE
-Recruitment/Selection: When Sony France started
business, a French HR manager might have had a major role
to recruit French employees
-Management Development: Job rotation is carried out in
Europe, but the HR of the original country that recruited an
employee has stronger authority over his personnel issues.
-Promotion: In France, promotion is mainly requested by
employees themselves.
-Performance Appraisal: Sony France uses yearly contract
system for all employees; at the beginning of a year, all
employees determine their target mainly based on the result
of the previous year consisting of five-grade evaluation after
careful discussion with their superior.
HR PRACTICES IN FRANCE
- Compensation: Salary range is fixed, based on job grade (e.g.
marketing: junior manager, junior product manager, product
manager, senior product manager, general manager). In each
range, salary consists of fixed part and performance-based part.
-Motivation: As an incentive scheme, once a year director gives
an award to the employees that achieve remarkable results. Each
director nominates candidates and then the assessments of all
candidates are discussed and adjusted in the board meeting.
-Communication Policies: There are no special communication
policies. As for meetings, the Board and managements meet on a
regular basis. Other meetings are scheduled on a project basis.
-Training: Training is mainly carried out as on the job training
(OJT) in Sony.
-
etc.
“When establishing itself in another country every
firm should try to understand the local culture and at
the same time make the most use of local talents”
Mr. Yamaguchi
RME Sony Europe
Sources of information:
• Mr. Masayoshi Yamaguchi
Director – Recording Media and Energy
Sony Europe
• Sony Europe Financial Statements – Fiscal year
2003
• Sony Corporation – Annual Report 2004