An Autobiography of Akio Morita, the man behind Sony

A book review

Made in Japan

Bhaswati DuttaMaya Sarah John

The book is divided into 9 parts:War : Survival and hopePeace: Our new life beginsSelling to the world: My learning curveOn management: It’s all in the familyAmerican and Japanese styles: The differenceCompetition: The fuel of Japanese enterpriseTechnology: Survival exerciseJapan and the world: Alienation and AllianceWorld trade: Averting crisis

Introduction

Brief account about Morita’s birth (Jan 26th, 1921) and family background

World War II and its surrounding circumstancesMorita being the eldest son was actually being

groomed from an early age to take over the family sake-brewing business but his interest was in Physics

His father exposed him to business meetings and environment from the beginning itself

During the war, he joined the Imperial Navy to be able to continue his Physics studies, and was involved in military research as well

War: Survival and Hope

Along with his close friend and mentor, Masaru Ibuka, Morita dreamed of starting a company which would make innovative products

After gaining his father’s permission and passing on heir’s rights over family business to his younger brother, the birth of Sony took place as “Tokyo Tsushin Kogyo Kabushiki Kaisha” in the ruins of the war – in a dilapidated building.

Magnetic recording tape, Electric phonographs, radios, transistor radios, and so on marked the innovation path of the company

Peace: Our new life begins

The path-breaking “Walkman”Expansion to America, U.K.One notable incident – strategic decision

about a large order of radiosVideo camerasTelevision setsWorld’s first video tape recorder and playersThe importance of marketing, distribution,

retailing etc were learnt slowly

Selling to the world: My learning curve

“No matter how good or successful you are or how clever or crafty, your business and its future are in

the hands of the people you hire.”

On management: It’s all in the family

Selection and inductionNot just from “name” schools, but from other

institutes as wellIntroductory orientation ceremony used to be

conducted at Tokyo headquartersMorita used to personally address all incoming

college graduates every year – making them aware of business realities

He used to stress that THEY had chosen to join the company, and so it is their responsibility and they are expected to stay for 20 – 30 years IF they are happy

On management…

Japanese concept of lifetime employmentNot actually a Japanese concept. In fact, during military rule just before WWII end,

workers could be hired and fired with no questions.After the war ended, the Occupation authorities tried

to break up the power of combined alliances of big companies “zaibatsu” for the sake of democratization

They passed laws which encouraged labour organizing, prohibiting firing of employees

Thus, the “lifetime employment” concept came about when Japanese managers and employees decided to make something good of this law – anyway workers needed work, and companies needed workers

On management…

Equity in the organizationJapanese have an egalitarian society because of

3 reasons: the new laws, the revision of tax system and the elimination of the zaibatsu conglomerates

Executive pay is only 7 – 8 times that of the lower levels of employees because of tax laws – high pay = high tax

Instead, companies pay for amenities, transport, etc not only of executives but also of all employees

Thus, the psychological and real gap is narrower between executives and employees

On management…

Training and developmentFrom grass-root levelAll engineers first assigned to work on

production line to get acquainted with the process and technology

Acquainting all employees with the “family” atmosphere, as mentioned earlier, during induction

Focusing on job fit as part of career planning

On management…

Employee and Labour relations – “family”Employees regarded as colleagues, not tools of

profit – even Sony U.K. factory managers & employees were trained and treated like family at Tokyo

A sense that the company is property of all employees, not just top few.

“Investors may come and go , but the employee will be with company for a long time.” – Stakeholders, not Stockholders

All wear same jackets, all eat in the same cafeteria, no special offices for executives: nobody treated differently

On management…

Very little distinction between blue and white-collar workers at Sony

Due to high level of education in Japan, a worker / union leader can rise to become president of a corporation

Unions not seen as enemies – rather, men and women who become successful as union leaders are potential management candidates – persuasive, people-oriented

However, there are occasional problems – story of union

On management…

Career planning JOB FIT is very important at Sony: “right man in right

post” Internal Job Posting – job openings within company

advertised in company newspaper: employees can apply for other jobs confidentially. Double benefit from this – person gets satisfying jobs & problem managers caught.

Low-level employees can move up through IJPs if found qualified after examining by the company

If new employees not satisfied with jobs assigned by personnel department, they can use the IJP to find a better one – thus, participative career planning

The company anyway tries to move employees around every 2 years or so into related or new work to prevent “dulling of minds”

On management…

Performance managementOnce a new employee is hired, school records

no longer play a role in performance appraisal or promotion

Managers not evaluated by bottom line but rather how well they can organize a large number of people and how effectively they can get highest performance from individuals and blend them into a coordinated performance.

Managers expected to have not only business / domain knowledge but also some level of technical expertise because of the nature of the industry

On management…

Motivation“To motivate people you must bring them into the family

and treat them like respected members of it. Money is not the most effective tool”.

An atmosphere where everybody can speak out – different from other Japanese companies where consensus is appreciated; here, different ideas and conflicts encouraged.

Loyalty to the organization is used as a motivation – if you are loyal, you will speak your mind and learn to accept different ideas from your colleagues

Company mission, vision and values projected to the employees: “Sony Spirit” – Through progress, Sony wants to serve the whole world, and is “always a seeker of the unknown”

On management…

Feedback and suggestions taken from employees about their work

Autonomy given to employees – “don’t wait for instructions. Learn from mistakes”

Sony believes it is unwise to define individual responsibility too clearly – each employee must act like a family member, ready to do whatever necessary

When there is a mistake, “focus on the problem, not the person.”

On management…

Talent acquisition and retention: In times of boom, the company is careful about increasing

personnel This is to avoid layoffs during recession – “employee does

not have the prime responsibility in the hiring decision so when recession comes, why should he / she have to suffer for a management decision?”

Bonuses are only given to lower level employees. Similarly, when company is in trouble, it is the top management who get salary cuts first, then the lower employees.

In this way, commitment is demonstrated, but it is also expected from the employees. Two-way trust is built – American system of job-hopping is NOT AT ALL appreciated.

On Management…

Fostering creativity:Three kinds of creativity identified: technology,

product planning, marketingThe way to unleash creativity: always set up a target.Entrepreneurship promoted right within the large

company by the way of management – each group has its own management with total responsibility. Within each section, chief can present a staff member’s idea / invention to top management.

Idea ownership: As an idea progresses through the Sony system, the original presenter continues to have the responsibility of selling his idea to technical, design, production and marketing staffs.

On Management…

Difference in American and Japanese Management Styles

American Too much intrusion

and influence of legal mentality

Business driven by short term and individualistic goals

American business is driven by assured return to the investors and yearly profits.

JapaneseLegal intrusion limited,

only when requiredJapanese business is

driven by long term and collective goals

Making profit is important for the purpose of continued employment and improving livelihood of the workers

Rational business judgment which is derived from total logic of American business schools that seems to be cold, deemphasizing the human element.

American business focuses too much on short-term profits, such as moving manufacturing overseas, while sacrificing long term overall livelihood

Requires more patience, cultural alignment to do business with Japanese co. and share the belief of Japanese co. that to achieve high efficiency and productivity, it is necessary to maintain a close cordial relationship with the employees that helps to upkeep high moral of the employees

Employees in Japanese companies form a tight community, so overall results are better and focus on long term benefits.

Depends on outsiders to make business decision

Americans business enterprises share adversarial relationship with government

Legal requirements necessary since many executives are arrested for economic crimes

Top corporate executives responsible for decision making

Japanese share supportive and mutual relationship with government

A person holding an executive position of trust if violates ,it is impossible for him to continue in the company as it is disgraced in Japan’s close circle society

Impersonal industry wide kind of unions in US, so more labour unrest.

Management’s attitude toward labour force is hierarchical

Kind of work is important for Americans

Labour peace in Japan because management does not use labour as a tool and tries to be aware of the concerns of labour.

More familial attitudeJapanese people tend to

be much better adjusted to the notions of work, any kind of work as honorable

A mandatory retirement age

A person is trained to do one thing and then refuses to do anything else.

In US a person sells his labour for price.

Title and job incentives are mandatory motivators

No mandatory retirement age

Workers generally learn new skills

Belief is that people get desire to work and derive satisfaction from challenging work.

Happy to work hard and proud of work

Leisure as the most satisfying goals of life

Immediacy of returns more important

Pay is more often the differentiating factor

Often forget group entity , self-centered attitude of working for himself only

Company patriotism and job satisfaction are very important.

Get raises as they age and are satisfied more in that way, long range security

Challenging job and recognition more as motivator

No long summer vacations even for children, company interests are more important

Applicant oversized or undersized is rejected, required perfect fit only.

Unfriendly takeover common tactic in America

Workers can leave when their contracts expire

Recruits are hired first, then put to use by molding them through training

Company owned by workers and share holders also

No unfriendly takeoverJob security and workers

morale is important, workers indispensable to both management and shareholders

One man or small team management common in US.

Japanese companies operate on proposal system in which middle management com up with ideas n concepts to be proposed to top management

Consensus natural to Japanese

Group management system

Morita shares his views on competition in business in Japan that Japanese competitors in domestic market are often cutthroat but it is this keen competition that makes Japanese companies so competitive abroad.

He explains that for exports Japan only considered sending those best products to world markets like America and Europe, which were recognized for product quality, after-sales services and price that could satisfy consumer s’ wishes

Competition: The fuel of Japanese enterprise

Japan has historically faced a lot of difficulties – being earthquake-prone, going through nuclear holocaust etc, so finding solutions for various needs through technology has been vital to the country

In this chapter Morita also explains about the ancient Japanese significant value concept called “mottainai” – an expression that suggests to waste something is to be considered as a kind of Sin - Shameful and a crime

Adoption of such a concept helped Japan to overcome oil crisis and as a result Japanese companies tend to use less crude oil, coal and natural gas than in 1970s and has helped to mke business more efficient.

Sony also continually tries to make innovations with its product design, which are more energy efficient and thereby consuming less power, more efficient and causing lesser harm to the environment.

Technology: Survival exercise

Morita explains that Japan, US and Europe being the biggest trade partners should try to develop their own competitiveness and solve the trade imbalance problems, which is natural given the larger share by US, Japan and Europe in the world trade.

Morita asserts that “foreign companies have their own problems competing with Japan, it is often as much a failure of that industry as it is a success of Japanese industry, and US and Europeans shouldn’t blame Japan for making good and attractive products.”

Morita highlighted in this section about the work done by him to promote the free trade between US and Japan and he also shares his experiences with various business and political leaders on the issues free trade and liberalization.

Japan and the world: Alienation and alliance

Morita explains that the short-sighted statesman and businessman around the world see their problems in bilateral terms.

Morita advocates that in order to have economic activity in a free and open economic system, it is important to reach an agreement on price stability with a balancing agreement on exchange rates system based on industrial values rather than money markets.

Morita recommends that world business community need to get together and also seeks the intervention of IMF to remedy the situation.

Morita concludes that in the free world with lesser trade restrictions, it is possible to stimulate more production and take advantage of the possibilities for the growing world economy.

World trade: Averting crisis

Morita’s vision of the future is of an exciting world of superior goods and services, where every nation’s stamp of origin is a symbol of quality, and where all are competing for the consumer’s hard-earned money at fair prices that is reflected through appropriate rate of exchange. Morita strongly believes & provokes the thought that such a world is within our grasp.

Thank you.