Introduction:
Despite of the fact of being an global electronic manufacturing giant, Sony recently has experienced big loses and undergone several reorganizations within the company and among its different business units. However, most of the reorganizations have not been proved as successful and some significant problems are still remained to be solved. Many scholars argue that this is mainly because of the Silo culture the company has, which is reflected on company’s business structure. The highly diversified or multidivisional business structure or business model of the company had never been changed after several restructure efforts and communication and cooperation among different business units are prevented as a result of silo culture.
Based on the strategic analysis of the case, in the first part of the essay, the silo culture explained and the business structure and business model of the company are identified. In the second part, the main advantages of the business model illustrated. However, this kind of business model has its inherent disadvantages which are elaborated in the last part of the essay.
1. Silo Culture and business structure
Silo business culture can be found in some enterprises. Silo is a term that used for organizations which have different business units with their own management team but among those units ‘lack the motivation or desire to work with or even communicate with other organizational units’ (Aeker, 2008). In some companies, where silo culture prevailed, certain departments or divisions do not wish to share information or corporate with other departments and divisions. It is believed that Sony’s performance is also affected by silo culture.
Apart from that, there are many other issues ...
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... supremacy and this adds Additional levels of hierarchy to the business.
Conclusion
From 5 divisional business group in 2005 to 2 major groups in 2009, Sony is dedicating to change its organizational structure and business model to transform Sony into more innovative, aligned and profitable organization. Although several reorganizations were attempted, Sony has not been able to change its business model dramatically to achieve its goal. There are still many business divisions within the company which open the doors to silo culture. However, this kind of multidivisional business model did not entirely make Sony’s business get worse. It improved the company’s flexibility and provided clear focus for each business division. At the same time, it constrained the cooperation and information sharing among the business units and brought new challenges to the business.
Every company has internal and external forces that effect how they operate within the community in which they are located and also within their own walls. These internal and external forces play a strong impact on the company’s profitability and success. These forces have an effect on what consumers they attract or ignore and how they are perceived by those who have the buying power. A mistake any analyzing and implementing measures to assist with these factors could greatly affects a company’s bottom line and success. This is why any company wanting to grow and be successful will need to take all of these forces; sociocultural, technological, economic, environmental and political-legal into consideration in creating their strategic plan.
The reason this topic was chosen was because the Martins chain as well as the Ukrops chain had specific characteristics/ symbols that could be used to define each chain. The concepts that the Martins takeover exemplified were prime examples of the topics we discussed in class. In class, we discussed the organizational culture and how it affects an organization. The Martins takeover is an excellent example of the ways organizational culture affects an organization. In this case, the Ukrops dominant culture just couldn’t compete with Martins. Even though Ukrops had an outstanding positive culture, this is one example of how the national culture had a tremendous effect on the local culture within the Ukrops chain. When the Ukrops managers thought about how their organization was being affected globally, they made the conscientious decision to sell to Martins. Because organizations depend heavily on foreign markets, the managers of Ukrops decided that Martins would be a much better fit to the community.
The major issues facing the company comprises of there being multiple businesses with different demands. There are separate levels of performance and success as well as growth chances for each of the sector and the firm needs to tackle with issues in each of these divisions (Dube, J.P., 2004).
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