Sir Howard Stringer, a Welsh-born American, became the first foreigner to head Sony when he took over as CEO of Sony in June 2005, replacing Nobuyuki Idei The move — a foreigner at the top one of Japan’s most famous companies — came as quite a shock to Japanese.

Stringer had served as Sony’s Executive Vice President and director at Sony Corp. As chairman, president and CEO of Sony Corp. of America he helped orchestrate the acquisition of MGM pictures, masterminded the merger with Bertelsmann music group and presided over Sony movie hits like Spiderman 2 and cut 9,000 jobs in the United States and $700 million from the U.S. budget. He joined Sony in 1997 and has also served as head if the CBS television network.

Stringer promised to make Sony “cool again” when he took over the company in 2005. Stringer, analysts said, had to slim down Sony’s operation and bring back the eye-opening innovation that made the company famous. He pushed for hiring younger engineers more literate in the digital age to design gadgets that incorporated sophisticated software and online capabilities. In September 2005. Stringer announced a ¥210 billion reorganization that involved cutting 10,000 jobs worldwide, selling ¥120 billion of assets, closing 11 production bases and shaking up management in a big way.

Stringer’s Life

Stringer was born to an English father and Welsh mother. He came to the United States after graduating from Oxford University in 1965. Three months after landing a job at CBS he was drafted to serve in American military in Vietnam even though he was a foreigner and told if he didn’t comply he would be deported. In Vietnam he came under fire several times, including friendly fire, and survived leaving Vietnam in a plane that was hit by enemy fire.

Stringer said he experience in Vietnam made him tougher, taught him survival techniques and helped him learn to adapt to difficult situations. He told the Daily Yomiuri, “Being a foreigner in the U.S. Army in Vietnam helped my ability to adapt to foreign cultures. And I believe 10 months in Vietnam helped me take a more serious outlook to life in general.”

After Stringer returned to the United States he worked at CBS as a documentary producer and eventually rose to become president of CBS. In 1997, Stringer was recruited by Sony chairman Nobuyuki Idea to serve as president of Sony America. He took over at a time when Sony America was suffering losses due to its poor performance in the movie industry and helped turn the company around.

After becoming head of Sony Stringer called on Sony employees around the globe to work more closely together. Under Stringer Sony cut thousands of jobs, floated its financial arm in the stock market and sold its advanced semi-conductor operation to Toshiba.

Sony’s CEO Howard Stringer received ¥816 million pay package, including stock options and bonuses, in fiscal 2009 -2010. His basic compensation of about ¥310 million was supplemented by ¥100 million in bonuses and options on 500,000 shares of stock with an estimated value of ¥400 million. Three other Sony executives earned more than ¥100 million, including the Vice Chairman Ryoji Chubashi and Vice President Nobuyuki Oneda, who earned ¥215 million and ¥164 million, respectively. In fiscal 2010-2011 Stringer received 345 million yen ($4.3 million), along with stock options worth 518 million yen.

Howard Stringer, a Success or Failure?

In May 2011 The Economist reported: “The share price has fallen by a quarter this year. The company has lost money for three years in a row. Hackers have breached its online service, exposing mountains of confidential customer data to potential mischief. Sony’s boss, Sir Howard Stringer, looks a like total failure. But looks can be deceptive. Sir Howard took the reins in 2005 and plans to retire soon. During his time at the top, he has overhauled the Japanese consumer-electronics giant. He has outsourced operations, shifted production overseas, sold business units and developed new ones. The company still lags behind big rivals such as Apple and Samsung, but it is far healthier than it was six years ago. [Source: The Economist, May 26 2011]

“In 2005 Sir Howard inherited a company that was bloated and badly run and had missed the technology shift to flat-panel televisions. A Welshman with an American passport, he was hired on the assumption that a foreigner can make painful changes that a Japanese boss might feel culturally obliged to duck. (Carlos Ghosn, a French-Brazilian, has done something similar at Nissan, a Japanese carmaker.)

“Sir Howard spent the first few years shunting aside deadwood managers who sabotaged his reforms. He promoted talented young executives, such as Kazuo Hirai, who at the age of 50 heads Sony’s gaming and network services, and is tipped as Sir Howard’s successor. Sony has been buffeted by the financial crisis, the strong yen and the earthquake, none of which was Sir Howard’s fault. He bears responsibility for the data breach, because he is the boss, but there is scant evidence that Sony’s defences were worse than the rest of the industry’s.”

“Sir Howard’s changes have begun to pay off. At the end of last year, Sony’s sales of televisions grew by 44% and those of its computers rose by 28%. Its gaming and mobile-phone activities turned profitable in 2010. The television business still suffers losses, but is on a firmer footing. Sir Howard shut superfluous factories — including one in Ichinomiya, which made the Trinitron televisions that were once a symbol of Sony’s technical brilliance. Today more than half of Sony’s TVs are assembled by outsourcers, up from a mere 20% in 2009.”

Many of the firm’s employees are conservative foot-draggers, but Sir Howard has shaken them up. Perhaps he has made Sony safe once more for a Japanese boss.”

Other Sony Management Leaders

At the same time Stringer was appointed, Ryoji Chunbachi was named president of Sony, replacing Kunitake Ando. He was put in charge of the software business while Stringer became more responsible for the hardware side of Sony.

After a management reshuffle in 2009 Stringer’s favorite lieutenants were finally in place in 2010. Investors reacted positively to that news, hope being that he could finally focus on his oft-stated vision to link Sony’s hardware with its software. Sony’s stock prices doubled in 2009.

In March 2011, 50-year-old Kazuo Hirai was made the head of a new unit that combines Sony’s video game and consumer electronic businesses. Many see this as a step on the way to taking over Howard Stringer’s job as CEO.

Sony Alliances

Sony produces large LCD television panels through its joint venture with Samsung. In 2008 it began obtain LCD panels from Sharp to meet demand. Sony’s alliance with Samsung and Sharp on LCD panels have allowed it to lower production costs and develop products faster than procuring parts from a third party. Sony and Samsung formed their joint venture, S-LCD Corp, in 2004.

Sony, IBM and Toshiba have worked together to create chips, code-named Cell, that are powerful as supercomputers. The chips were made to be used in PlayStation 3s. It turned at that spies with IBM turned over secrets from the project to Microsoft so it could use the technology in its X-Box video games.

In September 2007, Sony announced it was selling a chip plant to Toshiba for around $10 million. The selling of the plant, which producers chips for games, marked Sony complete exit from producing semiconductors for games, allowing it to concentrate on chips for video and digital camera.

Sony and Sweden’s Ericsson produce cell phones together, mainly making mid- and high-range handsets, In recent years sales have suffered. It has profits have been around $300 million on around $4.5 billion in sales Sony and KDDI developed a Walkman brand cell phone that downloads music

Sony and Toyota have formed an alliance to produce LCD panels for cars and are working together to develop a single-seat “transporter” vehicle called the “I-swing.” Sony, Toshiba and Hitachi are talking about forming a partnership to jointly produce LCDs.

New Sony Strategy and Comeback?

In 2010, Sony management acknowledged past mistakes but said it was poised for a comeback. “We will go on the offensive in 2010,” said Yoshihisa Ishida, a Sony senior vice president, at the unveiling of a new 3-D television in Tokyo in March.

“If you add up all of Sony’s cellphones, digital cameras, music players, computers, you get a network that would dwarf Apple’s,” Eiichi Katayama, a technology analyst at Nomura Securities in Tokyo, told the New York Times. “And Sony also has content. They could become a force to contend with.”

One of Sony’s main strategies is to integrate is hardware and software businesses and utilize the Internet to do this. Although video game hardware and software sales have declined globally, the PlayStation Network — a system that links gamers worldwide in live play — is a key initiative for the electronics company, which brings in an estimated $500 million in annual revenue. The network — which allows users to upgrade and download games and other content’serves both the PlayStation video game machines and Sony's Qriocity movie and music services.

With increased competition in North America and Europe, namely from Samsung, Sony has accelerated market development efforts in emerging markets in countries like India and China, where price competitiveness is crucial and every effort must be made to cut costs, This focus was behind, for example, Sony’s decision to pull of making LCD screen with Sharp in Japan.

In March 2010, the New York Times reported, Sony unveiled a new retail concept in Nagoya, which the company plans to introduce worldwide if it is successful. The Apple-store-like stores are an effort by Sony to showcase its entire network of products. Displays at the store show how various gadgets can work together: a camcorder, Blu-ray player and TV, for example, or a camera, Vaio laptop and digital photo frame. The store got off to a flying start. More than 300 people lined up for the March 17 opening of the sleek space, designed by the architect Tadao Ando. A line quickly formed in front of Sony’s new 3-D televisions.

In May 2011 The Economist reported: in 2011 “Sony has unveiled new smartphones, along with a clever strategy to persuade developers to produce video games for them. The firm has designed innovative tablet computers that could compete with Apple’s iPad. Sony’s Vaio notebook computers offer an alternative to Apple’s laptops. The hardware is important because it is a gateway to online services, where Sony’s future is thought to lie. That is one reason why the cyberattacks hurt the company so much.” [Source: The Economist, May 26, 2011]

Sony Business Situation in 2010 and 2011

Sony lost about $3.1 billion in fiscal 2010-2011. Sony had previously forecast a $800 million profit and said much of the loss was due to a $3.7 billion “non-cash charge” related to tax credits. At that time Sony estimated that losses associated with March 2011 earthquake and tsunami would be about $1.8 billion. At the end of 2010, Sony’s sales of televisions grew by 44% and those of its computers rose by 28%. Its gaming and mobile-phone activities turned profitable in 2010. The television business still suffers losses, but is in better shape than it used to be.

In May 2011 The Economist reported: “Before an earthquake walloped ten of Sony’s Japanese factories, the firm was expected to report a net profit of ¥70 billion ($817 million) for the year to March 31st 2011. But the quake will have cost it some ¥17 billion that year and ¥150 billion the next. The cyberattacks will also cost billions, says Sony. Analysts guess that the breaches could cost Sony ¥100 billion. Adding to the misery, Sony was forced to revalue the tax breaks (accumulated from previous losses) that it expects to deduct from future tax bills. The company reduced these “deferred-tax assets” by a hefty ¥362 billion. This does not affect its operating profit or cashflow, but it forced Sony on May 26th to report a net loss for 2010 of ¥259 billion.

In June 2011, AP reported: “Sony is forecasting a return to profit in fiscal year 2011-2012 after logging three straight years of red ink. Along with the data breaches, the company has been battling production delays and sales losses after supplier factories were damaged by the March 11 earthquake and tsunami. It expects an 80 billion yen ($989 million) profit for the current fiscal year.”

Sony was stung by the global financial crisis. In 2009 things finally began improving after an aggressive cost-cutting drive and a revival in sales. In the final quarter of 2009, Sony surpassed analysts’ expectations with a sevenfold increase in profit to $853 million. In fiscal 2009 Sonay made a profit of ¥31.77 billion thanks to cost-cutting efforts, brisk sales consumer electronics, including televisions, especially middle priced version of products such as flat-panel televisions and strong sales in the gaming and personal computer divisions.

In the April-June quarter of 2010 Sony made a profit of ¥25.7 billion thanks to strong sales of televisions, Playstation 3 consoles and computers. In the July to September quarter it reported net profits of ¥31.1 billion ($385m), having made a net loss of ¥26.3 billion a year earlier. In the period from April 2010 to December 2010 it profits increasing eightfold.

While traditional strong points have been underperforming lately there are new signs of hope. As of fiscal 2010-2011, Sony has lost money in its core television business for seven years straight. But it is doing well I emerging markets. In India its is outperforming rivals such as Apple and Samsung. It has the No. 1 market share in flat screen televisions and controls a 34 percent share of the digital camera business. Sony owes is success to strong brand image, generous advertising spending, good relations with small and medium-size retailers and a strategy of targeting consumers with an annual income of $10,000 or more.

Ten Sony plants were crippled by the earthquake and tsunami in March 2011. In early June the 10th and last of these factories — a plant in Tagayo, Miyagi Prefecture that makes magnetic tape and blue ray and other disc media — restarted manufacturing in early June 2011.

Stringer’s Shortcomings and Goals

Stringer succeeded in boosting Sony's music and film business, but failed to pull its TV business out of the red and was out hustled by Samsung and let Apple take the lead in innovation.Hiroko Tabuchi wrote in the New York Times: Stringer “had suggested that he would lay the foundations for a strong recovery at Sony, equipping it to put up a better fight against rivals like Apple and Samsung before leaving the company in the hands of a younger successor. But with its bottom line decimated by the global financial crisis and then more recent problems, the handover could be a messier affair. [Source: Hiroko Tabuchi, New York Times, November 2, 2011]

“Sony has, in fact, been making progress in restructuring its sprawling empire, shuttering some factories and paring down its supply chain. It said that it would spend “1.05 billion, or $1.5 billion, to take full control of its struggling cellphone venture with Ericsson of Sweden, and announced plans to realign its money-losing television business.

“Those woes have hindered what Mr. Stringer has called Sony’s “four-screen strategy,” centered on its smartphones, tablet computers, personal computers and televisions. The idea, according to Mr. Stringer, is to bring content from Sony’s music and movie companies exclusively to those gadgets, spurring both hardware and software sales. Helping to marry the two sides of the strategy would be Sony’s online content delivery platforms, like the PlayStation Network, which has more than 90 million accounts and is perhaps the world’s only serious rival to Apple’s iTunes.

“But Sony has been late to the market with tablets, having finally introduced one in September 2011, a full year and a half after the arrival of Apple’s top-selling iPad. In the smartphone market, Sony has also struggled to keep up with the Apple iPhone, although its Xperia phones, fitted with Google’s Android platform, have found some success.

“Its four-screen strategy appears to leave out its video game business, which has been showing signs of a comeback after years of trailing Sony’s archrival in the sector, Nintendo. Sony plans to release a much-anticipated handheld game console, the PlayStation Vita.

Stringer Steps Down from Sony

The Yomiuri Shimbun reported: “Stringer stepped down as the CEO of Sony Executive Officer, Howard Stringer, will step down on April 1 to accept responsibility for the prolonged slump in the company's performance. Stringer is leaving the position, which he has held for about seven years, as Sony expects to post a consolidated after-tax loss for the fourth year in a row as of March 2012. Close attention will be paid to whether Executive Deputy President Kazuo Hirai, 51, who will take over as CEO and president, can turn the company around. [Source: Yomiuri Shimbun, February 3, 2011]

“Stringer took the view that Sony's advantage was in software, as the company had numerous products in the movie and music sectors. He focused on strengthening this business to produce synergies with the electronics business. Under Stringer, Sony's earnings hit a record high of 8.87 trillion yen in sales and 369.4 billion yen in after-tax profits in March 2008. But after the Lehman shock and ensuing worldwide economic slowdown, Sony's performance, especially in its electronics business, rapidly deteriorated.

“In 2009, then President Ryoji Chubachi left the post and became vice chairman. Stringer became president in addition to CEO to consolidate management and speed up decision-making for a quick recovery. But there have been no hit products since then, and Sony's weakening TV production business caused further losses. In contrast, Apple Inc. of the United States released new products based on unique ideas and South Korea's Samsung Electronics Co. released new products with huge investments, resulting in increased market shares over the same period. Kazuharu Miura, senior analyst at SMBC Nikko Securities Inc., said, "There was a certain degree of achievement in that the music, movie and other content businesses were integrated. "[But] the electronics business could not be rebuilt.”

Stringer Earned $5.7 Million While Sony Lost $5.8 Billion in Fiscal 2011

Jiji Press reported: “Sony Corp. Chairman Howard Stringer received 449.5 million yen ($5.7 million) in compensation in fiscal 2011 (April 2011 to March 2012) , the electronics giant said in its financial statement released. Sony logged a record 456.6 billion yen ($5.8 billion) in group net losses for the year, remaining in the red for the fourth consecutive year. [Source: Jiji Press, June 29, 2012]

“Stringer's fiscal 2011 pay was nearly half the 863 million yen he received in fiscal 2010 because he returned the performance-based portion of his salary due to the company's poor earnings. Still, Stringer remained one of the top-earning corporate executives in the country. His compensation was 277 million yen in basic salary and 172.5 million yen in stock options.

“Among other Sony officials, President and Chief Executive Officer Kazuo Hirai and Executive Vice President Nicole Seligman received more than 100 million yen for the year. Hirai and Seligman received 115.6 million yen and 138.35 million yen, respectively. The salaries came under fire at its annual general shareholders meeting in Tokyo.

Image Sources: Wikipedia

Text Sources: New York Times, Washington Post, Los Angeles Times, Daily Yomiuri, Times of London, Japan National Tourist Organization (JNTO), National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.

Last updated October 2012

This site contains copyrighted material the use of which has not always been authorized by the copyright owner. Such material is made available in an effort to advance understanding of country or topic discussed in the article. This constitutes 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. If you are the copyright owner and would like this content removed from, please contact me.