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.
Department
Type of Structure
Structure Details
Advantages
Drawbacks
Corporate Leadership
Hierarchy
Sony’s corporate leadership operates within a hierarchical structure. It typically includes the CEO, senior executives, and various departments such as electronics, gaming, entertainment, and finance.
– Clear lines of authority and accountability. – Efficient decision-making process. – Well-defined roles and responsibilities.
Potential slow decision-making due to multiple levels of approval. Limited flexibility in responding to rapid changes in the electronics and entertainment industry.
Electronics Division
Divisional Structure
Sony’s electronics division operates with a divisional structure, where each division is responsible for specific product categories such as televisions, audio equipment, and cameras. Each division may have its own leadership team.
– Specialization in the development and marketing of electronic products. – Quick adaptation to market demands within product categories. – Tailored approach to different product lines.
Coordination challenges between divisions. May result in variations in product strategies and branding across divisions.
Gaming Division
Divisional Structure
Sony’s gaming division, including PlayStation, follows a divisional structure. Different regions and product lines within gaming may have their own leadership teams responsible for gaming console development, game studios, and online services.
– Customized strategies for different gaming regions and platforms. – Specialization in the gaming industry. – Quick adaptation to gaming market trends.
Coordination challenges between regional gaming divisions. May lead to variations in game release strategies and marketing approaches.
Entertainment Division
Divisional Structure
Sony’s entertainment division, which includes Sony Pictures and Sony Music, also operates with a divisional structure. Different divisions focus on various aspects of entertainment, such as film production, music recording, and distribution.
– Specialization in different entertainment sectors. – Quick adaptation to the needs of the entertainment industry. – Customized approaches for different entertainment segments.
Coordination challenges between divisions. May result in variations in content production and distribution strategies across divisions.
Research and Development
Functional Structure
Sony’s research and development activities follow a functional structure, with specialized teams working on electronics, gaming technology, imaging, and other technology areas. Research teams aim to innovate and develop new products and technologies.
– Specialized expertise in various technology domains. – Efficient management of R&D activities.
Potential challenges in aligning R&D efforts with the broader business strategy.
Human Resources
Functional Structure
The Human Resources function at Sony operates with a functional structure, focusing on HR-related functions such as talent acquisition, training, and employee relations. HR teams handle HR matters across the organization.
– Efficient management of human resources and talent-related activities. – Specialized expertise in HR functions.
Potential challenges in cross-functional collaboration with business units. May not align with specific business divisions.
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.
Comparison with Top Related Companies
Samsung: Samsung has a similar matrix structure but with a more pronounced divisional approach, given its diverse range of products from electronics to heavy industries. Unlike Sony, which integrates its divisions more closely to leverage synergies across electronics, entertainment, and financial services, Samsung’s divisions operate more independently, which can lead to faster decision-making within each division but might reduce the overall coherence in corporate strategy.
Apple: Apple employs a more centralized, function-based organizational structure focused primarily on product lines. Apple’s structure allows for tight control over product development and branding, which contrasts with Sony’s matrix structure that supports greater flexibility and adaptation to local market conditions but can lead to challenges in coordination and consistency across different product divisions.
Panasonic: Panasonic, like Sony, utilizes a combination of functional and divisional structures to manage its diverse electronic and non-electronic product lines. Panasonic’s structure is designed to foster innovation and adaptability in various business sectors, similar to Sony’s approach, but Panasonic has placed a stronger emphasis on sustainability and energy solutions in recent years.
Similarities and Differences
Similarities: All these companies use a form of matrix structure to manage the complexities of operating globally and maintaining leadership across diverse technology markets. Each company emphasizes a balance between central oversight and divisional autonomy to foster innovation and responsiveness.
Differences: Sony’s structure is distinct in its integration of entertainment and electronics divisions, which enables cross-promotional strategies and innovation sharing but may complicate the management of such diverse operations. In contrast, companies like Samsung and Apple have a clearer separation between their product divisions, which might streamline operations but limit cross-divisional innovation.
Implications
Innovation and Specialization: Sony’s product-based divisions allow for specialization and innovation within specific areas such as gaming, music, and electronics, similar to Panasonic’s approach. However, this separation can sometimes slow down cross-divisional innovation compared to Apple’s more integrated product development process.
Operational Efficiency: The functional segments in Sony’s structure, such as HR and finance, help optimize operations globally and adapt strategies to local markets efficiently. However, this can also create challenges in aligning diverse product strategies and operational practices across the company.
Market Responsiveness: Sony’s geographic divisions facilitate responsiveness to local market conditions and customer needs, potentially offering greater market adaptability than Apple’s more centralized structure. However, Sony must ensure effective coordination to maintain consistency in global branding and customer experience.
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.
Key Highlights
Matrix Structure: Sony employs a matrix organizational structure that combines function-based groups, product/business divisions, and geographical divisions.
Function-Based Groups: Sony’s functional groups include areas such as Research & Development, Finance, Legal, Compliance, CEO, Engineering, New Business (Strategy), Human Resources & General Affairs, and Sales & Marketing.
Product/Business Divisions: Sony’s major product/business divisions include Game & Network Services (Sony Interactive Entertainment), Music (Sony Music Group), Pictures (Sony Pictures Entertainment), Electronics Products & Solutions (Sony Corporation), Imaging & Sensing Solutions (Sony Semiconductor Solutions), and Financial Services (Sony Financial Group).
Geographic Divisions: Geographic divisions play a role in finance, planning, and strategy, and include regions like Asia-Pacific, Europe, China, United States, Japan, and Other Areas.
Organizational Overhaul (2021): In 2021, Sony made significant changes to its organizational structure:
Renamed from Sony Corporation to Sony Group Corporation to better represent its position as the headquarters of the Sony group of companies.
Renamed Sony Electronics Corporation to Sony Corporation.
Established separate executive structures for businesses within its product-based divisions.
Functional group leaders formed executive teams with decision-making authority to enhance efficiency.
OpenAI is an artificial intelligence research laboratory that transitioned into a for-profit organization in 2019. The corporate structure is organized around two entities: OpenAI, Inc., which is a single-member Delaware LLC controlled by OpenAI non-profit, And OpenAI LP, which is a capped, for-profit organization. The OpenAI LP is governed by the board of OpenAI, Inc (the foundation), which acts as a General Partner. At the same time, Limited Partners comprise employees of the LP, some of the board members, and other investors like Reid Hoffman’s charitable foundation, Khosla Ventures, and Microsoft, the leading investor in the LP.
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.
The Amazon organizational structure is predominantly hierarchical with elements of function-based structure and geographic divisions. While Amazon started as a lean, flat organization in its early years, it transitioned into a hierarchical organization with its jobs and functions clearly defined as it scaled.
The Coca-Cola Company has a somewhat complex matrix organizational structure with geographic divisions, product divisions, business-type units, and functional groups.
Costco has a matrix organizational structure, which can simply be defined as any structure that combines two or more different types. In this case, a predominant functional structure exists with a more secondary divisional structure.
Costco’s geographic divisions reflect its strong presence in the United States combined with its expanding global presence. There are six divisions in the country alone to reflect its standing as the source of most company revenue.
Compared to competitor Walmart, for example, Costco takes more a decentralized approach to management, decision-making, and autonomy. This allows the company’s stores and divisions to more flexibly respond to local market conditions.
Dell has a functional organizational structure with some degree of decentralization. This means functional departments share information, contribute ideas to the success of the organization and have some degree of decision-making power.
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.
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 are based on the main corporate functions (like HR, product management, investor relations, and so on).
Goldman Sachs has a hierarchical structure with a clear chain of command and defined career advancement process. The structure is also underpinned by business-type divisions and function-based groups.
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.
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.
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.
McKinsey & Company has a decentralized organizational structure with mostly self-managing offices, committees, and employees. There are also functional groups and geographic divisions with proprietary names.
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.
Nestlé has a geographical divisional structure with operations segmented into five key regions. For many years, Swiss multinational food and drink company Nestlé had a complex and decentralized matrix organizational structure where its numerous brands and subsidiaries were free to operate autonomously.
Nike has a matrix organizational structure incorporating geographic divisions. Nike’s matrix structure is also present at the regional and sub-regional levels. Managerial responsibility is segmented according to business unit (apparel, footwear, and equipment) and function (human resources, finance, marketing, sales, and operations).
Patagonia has a particular organizational structure, where its founder, Chouinard, disposed of the company’s ownership in the hands of two non-profits. The Patagonia Purpose Trust, holding 100% of the voting stocks, is in charge of defining the company’s strategic direction. And the Holdfast Collective, a non-profit, holds 100% of non-voting stocks, aiming to re-invest the brand’s dividends into environmental causes.
Samsung has a product-type divisional organizational structure where products determine how resources and business operations are categorized. The main resources around which Samsung’s corporate structure is organized are consumer electronics, IT, and device solutions. In addition, Samsung leadership functions are organized around a few career levels grades, based on experience (assistant, professional, senior professional, and principal professional).
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.
Starbucks follows a matrix organizational structure with a combination of vertical and horizontal structures. It is characterized by multiple, overlapping chains of command and divisions.
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.
Toyota has a divisional organizational structure where business operations are centered around the market, product, and geographic groups. Therefore, Toyota organizes its corporate structure around global hierarchies (most strategic decisions come from Japan’s headquarter), product-based divisions (where the organization is broken down, based on each product line), and geographical divisions (according to the geographical areas under management).
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.
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.
