Sony's Creation: The Legit Version

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Block & MacMillan (1985) Milestones and Challenges

Completion of Concept and Product Testing

Concept 1

Sony's First Product - 1945 Rice Cooker

The first concept of the rice cooker was derived from Japan's post-war context in 1946, whereby an opportunity arose for Morita and Ibuka to create a product which they assumed would have high market demand. Unfortunately, the product was a major failure, generating only three hundred dollars in profit. Operation of the rice cooker was dependent on the quality of the rice thus its was entirely inconsistent with the expectations and assumptions of their initial concept plan.

Sony's G-TYPE Recorder - 1950

Concept 2 The second concept, despite also being derived from a post-war context, was an idea extracted from a different perspective of market demand. Following the failure of the rice cooker, Morita and Ibuka began fixing radios whilst in search of products which excelled in technology. Modeled after an American protoype, they created Sony's first hardware device, a tape player/recorder called the G-TYPE recorder.

Completion of Prototypes

The creation of the G-TYPE recorder, was a complicated and challenging process. Developed in 1950, the G-TYPE recorder was a paper tape player and recorder with hand painted magnetic material applied by Sony's first engineers. The development of Model P portable recorder, a magnetic recorder which evolved from the G-TYPE recorder, had Sony face the tough challenge of material sourcing which hindered progression significantly.

First Financing

According to Nathan's (1999) publishment of Sony: The Private Life, the first initial investment in the new company was of 60000USD which in the post war economy of Japan was a considerable sum of money. Contrary to this, an article published by Harvard Business Review claims it was with an initial investment of 500USD which Morita and Ibuka set up shop in a burned-out room and their lack of financing was reflected heavily on their inability to source equipment and materials.

Completion of Initial Plant Tests

Once the G-TYPE recorder had been established, Morita and Ibuka began to examine their sales methods and learnt several key lessons in this process. One of the key issues with the G-type tape recorder design was that it was too heavy, bulky, and expensive to be sold as a consumer product. Through this realisation they discussed possible ways to improve their tape recorder for home and school-use decided to streamline the product which led to the development of a more portable tape recorder, the Model P recorder.

Market Testing

Sony - 999 Uses of the Tape Recorder

Upon entering the market, Morita and Ibuka observed the response and demand of the recorder and began to seriously examine their sales methods. They had learned by then that no matter how many new products they developed or despite any technical merits these new products may offer, customers would not buy them unless they knew how to use them. In order to generate more demand, they translated an American tape recorder pamphlet entitled "999 Uses of the Tape Recorder" and handed it out to customers as a marketing strategy allowing people became more aware that the tape recorder could be used in a range of social activities.

Production Start-Up

According to Cooper's (1994) article published in the Harvard Business review, the company’s real break-through occurred after 1953 when Ibuka acquired a patent license for transistors, tiny capacitors developed by Bell Laboratories that could be used in place of clumsier vacuum tubes. Without the licensing, the original prototype products could not be revised and improved thus paving the way for mass production of future products.

Bellwether Sale

Ibuka urged his engineers to improve production methods with the goal of creating a consumer product, the transistor radio. In 1955, the TR-55, Japan’s first transistor radio was launched. And, in 1957, Sony released the world’s first pocket transistor radio, establishing a market leadership position for the company

First Competitive Action

The first competitive action came from Morita who was determined in establishing the Sony brand. According to Cooper & Nathan (1999) he turned down an order of 100,000 radios from Bulova because they wanted the radios to carry Bulova’s name. Through his decision Sony was able to establish a competitive position against distribution companies and gauge demand from competitors and rivaling companies. [1]

First Re-design or Re-direction

The development of the Sony name was perhaps the greatest defining milestone for Sony, which was a vital part of their company direction and design. The company name "Sony" was created by combining two words, "sonus" in Latin, which is the root of such words as "sound" and "sonic." and "sonny" meaning little son. The words were used to show that Sony is a very small group of young people who have the energy and passion toward unlimited creation.

Legit(imacy)

Organisational Legitimacy: Challenges and Successes

Sony's humble beginnings in a burned-out room, with limited capital and financial resources, did little to assert legitimacy. In addition, the first rice cookers produced, were not reliable or generated sufficient market demand. With little to no knowledge of their brand, Sony's legitimacy as a company was practically non-existent and weren't recognised until Sony acquired a patent license for transistors in 1953, seven years after the birth of the company, that they started becoming legitimised at a cognitive level. Furthermore, the lack of any sort of business plan which could have been used as a tool of persuasion to demonstrate company value also did not help in Sony's endeavour for legitimacy. The company relied on Akio's father for the initial investment and there was no documentation or marketing to prove the value of the company to other potential investors. Not to mention, financing any new product was extremely difficult following World War Two, as an economic crisis was deemed imminent.[3] Since financial resources were scarce, Sony's products were being produced conservatively, to cut costs. Hence, the development of products took longer, which potentially could have caused damage to Sony's ability to be a legitimate, full-functioning software company. Finally, in terms of experience, neither Akio Morita nor Masaru Ibuka, the founders of Sony, had any experience in running a business, which again does not help Sony's case of trying to achieve legitimacy at this stage of the business' life cycle. Overall Sony’s liability of newness affected the organisational legitimacy it experienced during the 40s and 50s. However, Sony did successfully secure the viability of its business through legitimizing its radio products and was further legitimated by inter-organisational linkages of parts licensing for the purpose of attracting consumers and resource suppliers.

Consistency in Representation

Each account has been purposefully represented in ways to appeal to the different sets of values of the intended audiences but also reflects each authors biases. The purpose of these differences in representation are to enable the history of Sony and Akio Morita to create cognitive and socio-political legitimacy to help shape Sony’s identity in the eyes of audiences. The key factual difference in the differing versions is the amount of start up funds received by Sony. This factual difference may have occurred for several reasons: transition to new yen from old yen post war and the related USD value of yen currency changing, the bias to make the initial commitment seem larger or smaller or a simple incorrect USD to yen conversion. Reconciling this difference is not possible given the lack of available information and therefore acknowledging the potential reasons noted above is suitable consideration. Comparing the common elements of the biographies, Akio Morita’s early life and family history is heavily featured. For example, there is heavy emphasis both on the importance of tradition and willingness to embrace new technology. These shared elements demonstrate the common values of technological progress and family tradition. However, comparing the histories of Sony according to their US and Japanese webpages there are several differences that represent the differences in local values. In the Japanese version the narrative focus is on the importance of the prospectus to the company inauguration speech and notes both the ingenuity of making tools from bicycle springs and the work ethic of Sony engineers. This representation promotes Sony’s founding group identity and a sense of corporate individuality valued by the Japanese (Nishiyama, 2000). Comparatively the US webpages representation focuses on the founder’s innovative ideas and strong ardent belief in their future success. The rebuke to Bulova is a key example as it demonstrates the differences in representations between US Sony and Sony Japan. It shows the importance of force of personality or individualism in American culture as compared to the Japanese culture where it is negatively viewed according to Nishiyama (2000). Oertel & Thommes (2015) history appropriation framework allows for the interpretation of sources of organisational history. Applying this framework provides insight into the differing accounts by demonstrating that distinctive elements of organisational history are emphasised and appropriated for differing audiences. Oertel & Thommes (2015) conclude that tailored organisational history and its rhetorical construction is used to generate competitive advantage and organisational legitimacy. This same conclusion can be applied to Sony, in that the differing tailored accounts promote organisational and product legitimacy to its different audiences and act to promote Sony’s identity as a market leader in innovative technological products to potential customers or employees.


Disclaimer: Any information provided in this document may not be accurate, or inconsistent at the least. Please be aware Wikipedia is not a legitimate source and readers are advised to evaluate at their own discretion.

References

  • Cooper, R. 1994. Sony Corp: The Walkman Line. Harvard Business School Case.
  • Lyons, N. 1976. The Sony vision. New York: Crown Publishers.
  • Morita, A. 1987. Made in Japan: Akio Morita and Sony. London: Fontana Paperbacks.
  • Nathan , J. 1999. Sony: The private life. London: HaperCollins Business.
  • Nishiyama, K. 2000. Doing business with Japan. [electronic resource] : successful strategies for intercultural communication. Honolulu : University of Hawai'i Press, ©2000.
  • Oertel, S., & Thommes, K. 2015. Making history: Sources of organizational history and its rhetorical construction. Scandinavian Journal Of Management, 31(4), 549-560. doi:10.1016/j.scaman.2015.09.001
  • Block, Z. & MacMillan, I. C. 1985. Milestones for Successful Venture Planning, Harvard Business Review: 184-196.



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