It's the Japanese version of a western omelet.
Take a Welshman who has music and movie smarts and toss
him in as CEO of one of Japan's biggest electronics makers.
The combination's rarely been tried. And neither Sony
(NYSE:SNE - News)
nor Japan's tight-knit business community may be the same
again.
That's what analysts said Monday after Sony tapped Howard
Stringer, current chief of Sony Corp. of America, as its
next chairman and CEO.
It's the first time a non-Japanese will head a Japanese
company the size of Sony, which had $68 billion in sales
over the last four quarters.
"This is the first time a major Japanese company has looked
to a foreigner to manage it," said veteran Japan consultant
Keith Rabin.
Some said the shakeup dramatizes Sony's special problems
as it fends off a gaggle of rivals from the U.S. to Asia.
"Stringer's promotion shows how atypical Sony is," said
Adam Posen, a senior fellow at the Institute for International
Economics in Washington. "Sony was always the most western
and open company in Japan." As such, Stringer's promotion
doesn't surprise him.
Others are convinced Stringer's rise signals a sea change
in Japanese management practices.
"(Stringer's) appointment shows Japanese companies have
confidence in the managing abilities of foreigners in top
positions," said Akihiro Tada, a spokesman for the Japan
External Trade Organization in New York. JETRO is a Japanese
government agency.
Noted Japan expert Chalmers Johnson said Stringer's march
to the top at Sony was inspired by Renault executive Carlos
Goshn's successful stint as president and CEO of Nissan
Motor (NasdaqSC:NSANY - News).
As part of a Renault-Nissan alliance, Goshn took over
Nissan in June 2000 and turned it around.
"(Goshn) did a terrific job," said
Johnson, a former professor of political science at the
University of California, Berkeley.
Sony
is hoping for similar magic, Johnson said. He said Stringer,
a former CBS executive, is known for his grasp
of Hollywood, software and ability "to read American
taste."
Sony has been wobbly since the second quarter of 2003
when sales slid 7% to $13.4 billion and earnings plunged
98% from a year earlier. Sony's shares quickly shed a quarter
of their value.
The problem traces back to a series of miscalls in Sony's
product and manufacturing strategy.
Sony must counter the onslaught of rival products like
Apple's successful iPod digital music player.
Stringer,
a non-Japanese speaker, also must find ways to offset
an increasingly "commoditized" electronics business.
Makers in China and elsewhere in Asia can make CD players
and TV sets -- once Sony mainstays -- for much less.
Sony also has been faulted for its rigid approach to product
development, going all the way back to pushing Betamax
in the 1980s, a format for video recorders, as the rest
of the industry embraced VHS.
"Sony has been foundering for so long," said Johnson. "Stringer's
appointment shows not so much that Japan is changing,
but that people at Sony are getting desperate."
But can Stringer, an entertainment maven with no engineering
background, turn Sony around?
"I find it hard to believe he can do anything about Sony's
manufacturing in Japan," Johnson said.
Others say Stringer's elevation signals another departure
from the Japanese practice of having foreigners head overseas
subsidiaries or cosmetic posts at home offices.
If Stringer shines, other Japanese firms, suffering from
a decadelong business slump, may follow suit.
"There will be more positions for foreigners of excellent
ability at Japanese companies inthe future," JETRO's
Tada said.