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Top-Rung Management Shuffle Likely at Sony

Top-Rung Management Shuffle Likely at Sony

Sony CEO Howard Stringer's power may be on the wane. Rumors that the company's board intends to strip him of the "president" title are likely accurate, given that reports of Sony's displeasure with Stringer's management style have been leaking to the media for some time. Stringer is expected to retain substantial control and influence as CEO and chairman, however.

By Erika Morphy
01/09/12 10:38 AM PT

Sony appears to be preparing for a reshuffling of its top management, with the end result being the loss of power for current president Howard Stringer.

The common denominator among the various reports that have surfaced is that Executive Deputy President Kaz Hirai will be elevated to president and Stringer will retain his current roles of CEO and chairman. There's no consensus as to the timing of the event, however, with reports ranging across the board.

Spring 2012 or March 2013?

Sony hasn't made a formal decision about Hirai's move, according to several Japan-based media outlets.

Currently, the company is midway through a three-year turnaround plan, scheduled to be completed in March 2013. If Hirai were to take over at that point, these news account suggest, it would be a more natural change in leadership.

Other reports have Stringer leaving the presidency as soon as this spring.

Sony did not respond to our request to comment for this story.

A Lackluster Track Record

Whatever the timing, few observers are surprised by the move. Hirai is a high-ranking executive within the company, credited with building Sony's PlayStation business to international renown.

Stringer, for his part, has been at the helm of the firm since 2005 and has overseen a period of lackluster growth -- including a plunge in the company's TV business revenues. Reports put the 2011 loss for that unit between US$1 billion and $1.2 billion.

Then, of course, there was scandal over the many incursions hackers made into the PlayStation Network to steal user data. The network was shut down for an extended period of time, and Sony's reputation suffered a significant blow.

It is always serious when a company ejects an executive from a top post -- a step usually taken only when the company has suffered such setbacks that dramatic action is required.

Yahoo ousted Carol Bartz last year in the hope that a new CEO could engineer a turnaround for the firm. Research In Motion is reportedly considering asking its co-chief executives, Mike Lazaridis and Jim Balsillie, to step down from their positions as co-chairmen of the board of directors.

End of the Week News

"It is always a sign of non-confidence -- even panic -- when a company does this," David Johnson, principal of Strategic Vision, told the E-Commerce Times.

However, the news does not come as a shock, he added, as reports of Sony's displeasure with Stringer's management style have been leaking to the media for some time.

In addition, many companies -- not just Sony -- are taking measures to weather the economic storm expected from Europe's debt issues.

"I am not surprised they let this leak at the end of the week," Johnson added. "That is usually when companies release negative news -- right before the weekend, when hopefully not so many people are paying attention."


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