A Corporate Entrepreneurship Analysis of Sony Essay

A Corporate Entrepreneurship Analysis of Sony - Essay Example The term can be defined alternatively as the development of internal markets and relatively small and independent units designed to create internal ventures and expand innovative staff services, technologies and methods within an organization (Pinchot, 1985). It has been established that successful companies have one thing in common and that is an entrepreneurial style of management (Katz & Shepherd, 2004). Stevenson and Gumbert (1985) attribute the sustenance of a high level of performance by big companies such as Sony and Hewlett Packard to their entrepreneurial behaviour. Company overview Sony corporation is a Japanese multinational conglomerate that originated in the wake of World War II. The company made history after it built Japan’s first tape recorder and named it the Type-G. In 1958, the company changed its name from Tokyo Telecommunications Engineering Company to the present day Sony. The Sony Corporation has diversified its operating scope to cover almost all the ar eas of the entertainment and the telecommunications sectors. Sony Corporation is the parent company of the Sony Group. As the parent company of the group, its main task is to make strategic business plans for the group through research and development, designing, and marketing of products. As pointed out earlier, Sony Corporation has diversified its scope in to most entertainment and telecommunication sectors. The company has done this through its subsidiaries. One such example of the subsidiaries is the Sony Chemical and Information device Corporation which is responsible for manufacturing as well as the engineering and research and development for the mass production of products (Sony Corporation, 2012). According to the fortune 500 2012 list of companies, Sony Corporation is ranked 87th (CNN, 2012). The Sony group not only focuses on electronics, gaming, and entertainment, it also offers financial services. The subsidiary company that is responsible for the financial services bus iness of the Sony group is the Sony Financial Holdings. With its headquarters in Tokyo, Japan, the company controls the operations of Sony Life, Sony Assurance, Sony bank, and Sony Bank holdings. This subsidiary is the most profitable of all of Sony’s subsidiaries accounting for about 50% of Sony’s global earnings (Sony Corporation, 2012). The company was enjoying high profit returns up until early 2000’s when it started experiencing financial difficulties. These financial difficulties were due to several reasons. The first reason was the global financial crisis. The crisis made it difficult for the company to procure materials for manufacturing, cope with debt and maintain its work force. Secondly, the company’s milk cow, the play station, started to face steep competition from rivals Microsoft with their X-box gaming model. With the sales of the play station reducing, the company’s profits suffered similarly. The last main cause of the companyâ⠂¬â„¢s decline in profits was due to natural disasters. Japan has been victim to natural disasters, mainly earthquakes. The company’s headquarters in Tokyo, Japan, was hit by the devastating earthquake and therefore it became financially challenging for the company to make a comeback. The company however made a comeback in December 2011. Though the market capitalization of the company had dropped by over 50%, its net worth had increased from $17.6 billion in March 2002, to $35.6 billion in December 2011. This comeback can be attributed to the entrepreneurial behaviour of the company in promoting innovation and creativity that has enabled the company to realize and