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Named one of the best business books of the year (by Fortune and Newsweek), SONY is the "intimate biography of one of the world's leading electronics giants" (San Francisco Chronicle) as well as one of the most fascinating and complex of all corporate stories. Drawing on his unmatched expertise in Japanese culture and on unique, unlimited access to Sony's inner sanctum, John Nathan traces Sony's evolution from its inauspicious beginnings amid Tokyo's bomb-scarred ruins to its current worldwide success. "Richly ...
Named one of the best business books of the year (by Fortune and Newsweek), SONY is the "intimate biography of one of the world's leading electronics giants" (San Francisco Chronicle) as well as one of the most fascinating and complex of all corporate stories. Drawing on his unmatched expertise in Japanese culture and on unique, unlimited access to Sony's inner sanctum, John Nathan traces Sony's evolution from its inauspicious beginnings amid Tokyo's bomb-scarred ruins to its current worldwide success. "Richly detailed and revealing" (Wall Street Journal), the book examines both the outward successes and, as never before, the mysterious inner workings that have always characterized this company's top ranks. The result is "a different kind of business book, showing how personal relationships shaped one of the century's great global corporations" (Fortune).
Sony's ability to manufacture the hippest new products, from the Walkman to the new Glasstron head-mounted computer screen, is only part of the story in Sony: The Private Life. Author, Japan scholar and Emmy Award-winning filmmaker John Nathan documents intimate corporate dramas that might have remained hidden from an American lacking his language proficiency and understanding of often-misinterpreted Japanese culture and business practices.
Contrary to popular belief, many Japanese are actually quite frank among themselves, although most outsiders only see the public face of formality and aversion to embarrassment. It's a tribute to Nathan that he was able to get Sony's execs to reveal the world of intrigue among cofounders Masao Ibuka and Akio Morita, as well as their successors.
Nathan recreates such historic public events as the unveiling of Sony's breakthrough Trinitron color TV technology and its $6 billion acquisition of Columbia Pictures in 1989, which came amid a parade of Japanese corporate takeovers. But he also reveals such private episodes as cofounder Masaru Ibuka's troubles in his first marriage.
People who have lived in both Japan and America are sure to identify with the stories about Sony America. The author details how Harvey Schein, whom Morita recruited from CBS Records to be Sony's first American employee, failed to learn the very Japanese, emotion-based way of making decisions, and instead perpetuated an unsentimental, often abrasive American-style business culture based on logic alone. When Schein bruised egos, it terrified Japanese executives, although his self-described "hard-ass" management style often helped to bring delinquent customers in line.
Nathan also describes Schein's ultimately unsuccessful bid to change Sony's pricing structure after discovering that some divisions were losing money in the U.S. He concluded that the problem lay in product pricing originating in Tokyo, where corporate taxes were much higher than in the States. Schein then argued that Sony should sell products at a higher price in Japan to save corporate taxes and diminish profit margins, and at a lower price in the U.S. to save customs duties and increase profits. His plan fell apart when he met with resistance in Japan. His Japanese counterpart refused to implement Schein's scheme, maintaining that decreasing profits at the parent company to pass on savings to Sony America was "out of the question"; the company's credibility with Japanese banks was contingent on its high profitability there.
Sony's painful effort to create a truly global culture within its family of businesses reached a crossroads when current chairman and former CEO Norio Ohga selected someone from the new generation Nobuyuki Idei to succeed him as president and CEO. Idei was a surprise choice to many in Tokyo, who regarded him as a nontechnical "heretic" in Sony's corporate culture. The son of an affluent, globe-trotting economics professor, Idei studied in Europe and managed Sony's European operation for six years, acting on his own initiative and growing increasingly distant from headquarters.
Idei is presented as a man who comfortably digests huge helpings of such disparate economic theories as Nicholas Negroponte's "world of bits," Claude Levi-Strauss' "semantic borders" and Michael Porter's "value chains." He is also someone who struggles to balance his vision of new media with Sony's traditional practices.
Idei is now preparing Sony for what he calls "the network-centric era," Nathan writes. As the first step, last April he realigned Sony's 10 electronics companies into three new business divisions: the home network company, the personal IT network company, and the core technology and network company. He then relocated the units away from corporate headquarters, gave each its own R&D lab, and set up an independent board and management committee.
Although it might be natural for Sony to "engineer a discontinuity of the company's 50-year history" to face the challenges of the new economy, writes Nathan, it's unclear what that will mean for its visionary cofounders' painstakingly crafted global mentality. In the aftermath of Morita's death Oct. 3, the Japanese business press declared the end of Sony as we've know it. The new Sony that Nathan so skillfully documents can now fully emerge.
The Founding Fathers: In Pursuit of a Postwar Dream
At the center of the postwar social organism called Sony Corporation stands one of business history's most productive and intriguing relationships. For over forty years, Masaru Ibuka and Aldo Morita grew Sony together, from adjoining offices, reveling in each other's company. Their personal secretaries, women who devoted themselves to their well-being for dozens of years and who remain at work maintaining their deserted offices today, every book and electronic gadget in place, like to remember them facing each other on the rug, playing with a prototype that Ibuka had snatched from the hands of one his engineers and carried upstairs gleefully to show Morita. Sometimes, if one of them had just returned from a trip to America, the focus of their pleasure would be a shopping bag full of actual toys from F.A.0. Schwarz. Ibuka's son, Makoto, recalls somewhat ruefully the mechanical toys his father bought for him on trips abroad; the gifts were handed over only after having been taken apart and reassembled, or partially reassembled, in the office of the president. Morita's second son, Masao, remembers that a visit to the founders' offices was like stepping inside a toy box. His father always purchased two of any toy or mechanical gimmick—an electric potato peeler, for example—one for himself and one for Ibuka. Ibuka had a lifelong passion for electric trains and was president of the Japan Association of Microtrains; for a period of years, a narrow-gauge track was installed along the walls of his office. Morita collected mechanical organs, music boxes, and player pianos. His favorite toy was a remote-controlled helium balloon.
When they were both at work, Ibuka and Morita took lunch together, sometimes inviting someone else to join them in the company dining room. Each knew the other's office as well as his own: Ibuka was an inveterate tinkerer, and as he sat at his desk, fixing a watch or a radio, he would call out to his secretary, "Go into Morita's office and see if there isn't a set of small screwdrivers in the third drawer of his desk."
If Ibuka and Morita had serious disagreements over the years, they resolved them privately. Regarding company policy they spoke with one voice; no one in or outside Sony ever heard either of them criticize the other. Nor has anyone who has ever seen them together failed to remark on the exclusive bond that seemed to unite them in a mysterious way. According to Makoto Ibuka: "They were closer than lovers, even Mrs. Morita felt that. They were bound together by a tie so tight it was more like love than friendship. The connection was so deep that not even their wives could break into it when they were together. Even now, when they're both sick, when Mr. Morita comes to visit my father or my father pays Mr. Morita a visit, they sit together in silence, holding hands, the tears running down their cheeks, and they're communicating without words. That's the kind of friendship they always shared."
Morita's two sons echo Makoto Ibuka's feelings about the bond between their fathers. Hideo Morita, the elder, remembers them at the dining table in his house in Tokyo: "They would sit there, talking to each other, and we would listen but we had no idea what they were saying. Each one seemed to be talking his own story, different from the other's. It was like gibberish to us, but they were understanding each other, and interrupting them for any reason was forbidden!" To Morita's younger brother, Kazuaki, as to many others in and outside the family, the intimacy of the relationship was beyond understanding: "It was truly strange. Men usually get along really well for three or maybe five years and then there's some kind of an argument. But they managed for such a long time, right up against each other, matching perfectly in their work lives and their personal lives. They were incredibly lucky to have found each other. I never saw anything like that combination!"
There were moments of discord, typically the product of tension between Ibuka's impulsiveness and nadveté and Morita's business pragmatism. Most of the anecdotes are trivial, remembered only because they were rare: Ibuka on vacation commandeers a company car in Honolulu and Morita reprimands him; Ibuka decides to sponsor an acquaintance and guarantees a loan from one of Sony's banks, angering Morita. The same variety of conflict was a recurrent theme in the management of the business, as when Ibuka nearly drove the company to ruin in the early 1960s by refusing to abandon the disastrous Chromatron teechnology for color television.
But even then, when Morita was desperately anxious to cut losses, there was never any question that he would attempt to block Ibuka: for Akio Morita, interrrrrfering with a plan conceived by his senior partner, obstructing his dream or vision, or in any way disappointing whatever desire he chose to entertain, however childish or irrational, would always be unthinkable. On the contrary, applying his magical persuasiveness to help Ibuka's visions come to life was in the nature of the relationship.
Morita also considered himself responsible for protecting Ibuka, whom he described as a "pure and simple soul," from those who would exploit his guilelessness. Until he was in his seventies, Ibuka customarily left the office alone when he went out on business. One day at Tokyo Station he went into the public toilet and was approached by a stranger who recognized him and wanted to say hello. When Morita heard, he was sufficiently alarmed to order that a male assistant accompany Ibuka wherever he went.
Morita had a giant, driving appetite for personal success and recognition, but in his relationship to Ibuka, he was clearly able to achieve a degree of selflessness. Hideo Morita sees in his father's devotion to the older man a longing for a big brother. He spoke to me in English: "My father was born the eldest son in a big old family and raised as a prince. All eldest sons in that position need a big brother. I know because I was similar. He had to act as head of family ever since childhood, as if he can do anything, but of course he can't, his life is fall of contradiction. He needed someone he could rely on mentally. Not for decisions or advice; he had people to advise him. Ibuka was not a businessman; he was a great straight dreamer. My father loved him for this: my father loved him for the way he could dream. Ibuka's view was totally different from what my father can ever see, so he was good for him, and he needed him."
Morita and Ibuka met late in the summer of 1944 when they were both assigned to a task force charged with developing a heat-seeking missile, code- named "Marque," in time to turn the tide of the failing war. Morita, the youngest member of the team at twenty-four, was a lieutenant in the Imperial Navy with a degree in physics from Osaka Imperial University. Though he was painfully thin and of medium height for a Japanese man, his features were striking; he had large, unblinking eyes, a high, aquiline nose, and a large, full mouth with pronounced lips. His hair, which would turn silver in his early forties, was still jet black, and he wore it parted down the middle. His hands were slender; there was about him an air of aristocratic delicacy that belied his stamina and intensity. Ibuka, thirteen years older than Morita, was a taller, heavier man with shovel hands and an ungainly manner that was a striking contrast to Morita's elegance. He wore thick eyeglasses and spoke with a heavy Tokyo workingman's accent. An electrical engineer, he was participating on the team as a civilian contractor to the military. At the time, he managed a measuring instruments company that had been supplying weapons and tactical systems to the navy since 1940.
For close to a year, the men spent intense periods of time together, brainstorming technology with other engineers and officers, and, later, by themselves, discussing Japan's future after the war. In his capacity as naval liaison officer, Morita visited Ibuka's company in the Tsukishima District of Tokyo, on the bay. Ibuka was producing radar devices under contract to the navy, and he showed Morita a room full of female students from the music academy in Ueno whom he had employed to adjust the oscillation of the transmitters to the pitch of a tuning fork Years later, Morita would recall the moment as an example of the ingenuity that had first drawn him to the older man.
In September 1944, as the firebombing of Tokyo began, Ibuka evacuated his company to the small town of Suzaka in Nagano Prefecture, one hundred miles northwest of Tokyo. After this, he rarely made the journey south all the way to Zushi for research committee meetings, but Morita traveled to see him several times, ostensibly in his capacity as naval technical officer overseeing production. During these visits, in the stillness of the Nagano countryside, the men seem to have deepened their mutual regard. Discussing the progress of the war, they shared their certainty that, despite the propaganda, defeat was imminent, and discovered that each other's views were based on information in shortwave broadcasts from the United States which both were monitoring illegally. Possibly, Ibuka shared with Morita his vision of the reconstructive value of technology in peacetime; whether the men discussed going into business together after the war is not known. Their last meeting before the defeat was on July 27, 1945, when they listened together to reports of the Potsdam Declaration calling for Japan's unconditional surrender. By that time, Ibuka had already resolved to return to Tokyo to begin again but seems to have decided not to tell Morita, possibly for no better reason than his customary reticence about making clear what was on his mind.
On August 6 and 9, 1945, the United States dropped atomic bombs on Hiroshima and Nagasaki. At noon on August 15, Emperor Hiroshito went on the radio to inform his subjects that they must now "endure the unendurable" and lay down their arms. The emperor had never spoken publicly before, and across the islands of the Japanese archipelago virtually every citizen listened. Those who did not have radios of their own, particularly in rural areas, gathered at town halls or in the gardens of wealthy merchants to listen in silence to the emperor's reedy voice speaking unthinkable words through the static of the broadcast. Many wept openly.
Like his countrymen across the land, Ibuka, in his warehouse office in Suzaka, listened to the broadcast standing at attention in front of the radio. If he was feeling grief, humiliation, anger, or regret as he listened, these were not emotions he communicated. What impressed the handful of engineers standing with him was, on the contrary, his excitement that the war was at an end, an exhilaration many of them shared. Years later, Ibuka would recall with distaste the applications required for beginning any development project during the war years, and the bickering with the Ministry of Communications and War Office bureaucrats who knew nothing about engineering. More important, he and his colleagues were united by a passion for technology and invention: for them, the Americans, though they were the enemy, had never been the "hairy barbarians" portrayed in wartime propaganda. During the war years, Japanese engineers had based their work on American technology, which filled them with admiration and, for its superiority, chagrin. Their bible during this period was F. E. Turman's Radio Engineering, an American textbook that they ransacked for ideas and methods, struggling with the English, until it was dog-eared and underlined in multiple colors.
According to one of the men in the room with Ibuka that afternoon, Akira Higuchi, "Any engineer with heart was overjoyed by the war's end. We all felt that now at last we could take on some real work, not just weapons for the military but useful things, and we felt that developing real products would allow us to catch up and even move ahead of American technology." On his first trip to the United States in 1954, Higuchi went out of his way to visit Cambridge, Massachusetts, because he knew it was the home of General Radio, a transformer manufacturer well known in Japan during and after the war. When he finally located the factory on the Charles River, it looked deserted. Higuchi gazed at the old brick building from across the street until he felt satisfied that he had seen General Radio with his own eyes, and returned to New York.
Copyright (c) 1999 John Nathan. Reprinted by permission of Houghton Mifflin Company.
|1||The Founding Fathers: In Search of a Postwar Dream||1|
|2||Ibuka the Muse: From "Talking Paper" to Trinitron||25|
|3||Akio Morita: Discovering America||51|
|4||Morita the Dazzler: The Man Behind the Mask||68|
|5||Sony's First American: Lessons in Logic from Harvey Schein||93|
|6||Maestro Ohga: The Art of Profit||116|
|7||Extending the Family: The Rise of Mickey Schulhof||158|
|8||One for Chairman Akio: The Columbia Pictures Acquisition||180|
|9||Hollywood Continued: Tailspin||220|
|10||Ohga and Schulhof: A Tale of Love and Hubris||241|
|11||Idei the Heretic: Empire's End||280|
Nathan traces this emotional web as no other writer has or could, by drawing on his unmatched expertise in Japanese culture and his unique, unlimited access to Sony's inner sanctum. With a novelists skill—honed by translating the works of Yukio Mishima and Kenzaburo Oe—Nathan etches incisive portraits of the company's famously enigmatic cofounder, Akio Morita; its patrician, autocratic CEO, Norio Ohga; and its edgy new leader, Nobuyuki Idei, who already has brought wrenching changes to the company. Nathan's exploration of the Sony empire, also reveals how it invented color TV as we know it and used bold marketing techniques to best the inferior yet dominant American competition; why Sony ignored the conventional wisdom about the time to enter a groundbreaking partnership with archrival Philips to perfect the CD; how Sony manages to prosper despite Japan's economic malaise; and what innovations and strategies it plans for the new century. With authority and wit, Nathan dispels the myths that surround Sony and crafts an unparalleled corporate drama. Sony: The Private Life is at once an engrossing chronicle of astounding entrepreneurship and a poignant account of loyalty's consequences.