Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions. In 2021, Sony announced the overhauling of its organizational structure, changing its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies skewing the company toward product divisions.
Understanding Sony’s organizational structure
Sony, formally known as Sony Group Corporation, is a Japanese multinational conglomerate headquartered in Tokyo.
The company has interests in several consumer and professional electronics markets, such as video games, digital cameras, televisions, audio equipment, music production, digital storage, and healthcare biotechnology.
At the peak of its powers, Sony was dubbed the “corporate octopus” for its sprawling and diverse number of ventures across many unrelated industries. With that said, the rest of this article will explain how the company structures these various pursuits.
What is Sony’s organizational structure?
Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates some geographical divisions.
Function-based groups
To support function-based efficiency and effectiveness, Sony is driven by the following functional groups:
Game & Network Services – Sony Interactive Entertainment.
Music – Sony Music Group (Global), Sony Music Entertainment Japan.
Pictures – Sony Pictures Entertainment.
Electronics Products & Solutions – Sony Corporation.
Imaging & Sensing Solutions – Sony Semiconductor Solutions.
Financial Services – Sony Financial Group.
In most cases, each division contains a few holding companies that themselves contain related businesses. For example, Columbia Records is part of the Sony Music Group.
Each division is also headed by what Sony calls an “officer in charge”.
Geographic divisions
Geographic divisions are most relevant in terms of finance, planning, and strategy. These include:
As part of the overhaul, the company changed its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies. Coinciding with this move was the renaming of Sony Electronics Corporation to Sony Corporation – a product-based division we mentioned earlier.
Sony also announced that it would be changing the executive structure of each of the businesses contained in its six product-based divisions. For example, all businesses under the Imaging & Sensing Solutions division would establish their own executive structures. The executive teams were comprised of existing functional group leaders, with each team handed some degree of authority to promote more efficient decision-making within the company.
Key takeaways:
Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions.
Function-based groups include CEO, Research & Development, Finance, Engineering, and Human Resources & General Affairs. Sony also operates six key product-based divisions: Game & Network Services, Music, Pictures, Electronics Products & Solutions, Imaging & Sensing Solutions, and Financial Services.
Sony also has six geographic divisions and made some changes to its organizational structure in 2021. Chief among these was the renaming of some business units and the establishment of executive teams for each holding company.
Airbnb follows a holacracy model, or a sort of flat organizational structure, where teams are organized for projects, to move quickly and iterate fast, thus keeping a lean and flexible approach. Airbnb also moved to a hybrid model where employees can work from anywhere and meet on a quarterly basis to plan ahead, and connect to each other.
eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.
IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.
Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions. In 2021, Sony announced the overhauling of its organizational structure, changing its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies skewing the company toward product divisions.
Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams based on the main corporate functions (like HR, product management, investor relations, and so on).
Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.
Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.
McDonald’s has a divisional organizational structure where each division – based on geographical location – is assigned operational responsibilities and strategic objectives. The main geographical divisions are the US, internationally operated markets, and international developmental licensed markets. And on the other hand, the hierarchical leadership structure is organized around regional and functional divisions.
Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.
Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.
The gaming industry, part of the entertainment industry, is comprised of three main types of players. From game engines, which help developers build their games. To publishing gaming houses. And gaming consoles. While the prevailing business model for decades has been that of selling the console at cost and making money on games. Digital games changed the way games are distributed and sold, and they opened up the way to free-to-play models.
A free-to-play is a model that became particularly popular in gaming. Free-to-play is also commonly referred to as free-to-start. For instance, companies like Epic Games have launched popular games like Fortnite’s Battle Royale, which had ingrained a free-to-play model. This is a model that become extremely popular in the digital age of gaming.
Epic Games is a gaming company, that develops, publishes, and distributes games. It comprises the Unreal Engine, making money through licensing agreements with developers and creators. Its games (like Fortnite) mostly follow a free-to-play model on PC and an in-app purchase model on the digital marketplace. And its storefront Epic Games Store, taking a 12% cut on games’ sales.
Roblox is an online gaming platform where users can create avatars and explore various gaming experiences. Each experience will be monetized based on how its developer has structured the game. For instance, free games allow users to spend the platform’s currency, called Robux, to get specific enhancements or purchase items like clothing accessories for the avatars, and simulated gestures from the Roblox Avatar Marketplace. Therefore, Roblox makes money by earning a commission on each transaction and through its internal ad network.
The play-to-earn model is a business model allowing gamers to farm or collect cryptocurrency and NFTs that can be sold on the market. This model has become a standard already in the “crypto gaming industry,” where the blockchain-based games enable token economics to kick in as an incentives mechanism at scale for users to play and be engaged.
Axie Infinity is an NFT-based online video game developed by Sky Mavis, a Vietnamese game studio founded by Trung Nguyen in 2018. Nguyen combined his interest in blockchain accountability and the CryptoKitties craze to launch the game in August 2018. Sky Mavis generates the bulk of its revenue via the 4.25% fee it charges on all in-game purchases. This includes land purchases, monster NFT trading, and monster breeding. Axie Infinity requires that all new players purchase three monsters to get started. Since the cost can run into hundreds of dollars, Sky Mavis will lend players the monsters and collect a 30% interest fee once the player starts earning currency.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
