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Unravelling the Enigma of Sony's Foreign-Born CEO
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Try this thought experiment: Suppose that ExxonMobil Corporation needed a new group chief executive. Rolling the dice a little, it reached into its Saudi Arabian subsidiary and tapped a tried and tested Saudi national there. No matter that he did not speak or read English. ExxonMobil’s board assured him that enough people in New York spoke Arabic for him to function effectively.

Sounds ridiculous, doesn’t it. But this in reverse is more or less what Tokyo-based Sony Corporation did when in 2005 it appointed Sir Howard Stringer chief executive. Having risen to prominence as an executive at CBS in New York, British-born Stringer had for some years been running Sony’s movie and music operations in the United States.

To say the least, he was a bewildering choice. After all, from a Japanese point of view, he was illiterate (how many illiterates are running major American corporations?) and he spoke no more than a few words of Japanese. Given how difficult the language is, even a man half his age could hardly have aspired to reach any worthwhile competence during his prospective term in office.

The plot thickens when you realize that Stringer, for all his undoubted competence in entertainment, had no experience in Sony’s core business, which, of course, is manufacturing. And that is high-tech manufacturing. (All conventional wisdom to the contrary, Sony’s Japanese operations have long since moved on from labor-intensive assembly of things like television sets and are now heavily engaged in making such advanced items as blue lasers, charge coupled devices, and television studio equipment.)

There is a mystery here of the sort that has perennially inspired Westerners to characterize Japan as “enigmatic.” Now we have the Financial Times to thank for shedding some light on the subject. In an interview with the FT’s Lionel Barber, Stringer, who stepped down as chief executive earlier this year, has more or less admitted he has been a spare wheel all along in Tokyo. While he remained the decider on the entertainment business (which is located almost entirely outside Japan), real power over domestic operations lay with the company’s president Ryoji Chubachi. At least it did until 2009 when Chubachi moved to vice-chairman and Stringer was given the title of president. But how much power Stringer really had even after the reshuffle is debatable given that in Barber’s words, Stringer “ended up relying on a small group of fiercely loyal women secretaries as his eyes and ears.”

Honest man that he evidently is, Stringer evidently chafed at this charade and it is entirely to his credit that he has now gone public – in however veiled a way – with his dissatisfaction.


All this raises an interesting question. What lay behind such a puzzling appointment? Any attempt at an answer is necessarily speculative but it seems that the impetus may have come in the first instance from outside. It is no secret that Sony has been the sick man of the Japanese electronics industry for nearly two decades, trailing far behind such peers as Canon, Fujitsu, Panasonic, Hitachi, and Toshiba. This has probably meant that it has had to endure an increasing degree of backseat driving from the elite government bureaucracy and top banks.

Left to their own devices, Sony insiders would undoubtedly have wanted Chubachi to preside in solitary splendor. The wider Tokyo economic establishment may have had other ideas. In that sense having an American outsider wished on it as titular CEO would have been a suitably symbolic rap on Sony management’s knuckles.

An additional factor may have been the Tokyo establishment’s perennial wish for Japan to be seen as more open than it really is. To say the least this is not easy in a nation with one of the most restrictive immigration policies in the world.

Appointing a gaijin to ostensible leadership of one of the most famous Japanese corporations would be an efficient way of implying — to the uninitiated at least — that the island empire really is globalizing just like everyone else.

(Republished from Forbes by permission of author or representative)
• Category: Economics • Tags: Japan, Sony 
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