Sony : The Private Life

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An eminent expert on Japanese culture draws on unparalleled access to Sony's archives and executives to craft a revelatory portrait of the passions and loyalties that have driven Sony to its greatest triumphs and most notorious debacles.
John Nathan pulls the veil from one of the most spectacularly successful and secretive postwar corporations. From its inauspicious beginnings amid Tokyo's bomb-scarred ruins to its role as the world's chief purveyor of electronics and mass ...
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Overview

An eminent expert on Japanese culture draws on unparalleled access to Sony's archives and executives to craft a revelatory portrait of the passions and loyalties that have driven Sony to its greatest triumphs and most notorious debacles.
John Nathan pulls the veil from one of the most spectacularly successful and secretive postwar corporations. From its inauspicious beginnings amid Tokyo's bomb-scarred ruins to its role as the world's chief purveyor of electronics and mass culture, Sony's is one of the signal fables of our age. Nathan dissects the fable and uncovers persuasive evidence that Sony's biggest triumphs (color TV, the Walkman) and most calamitous failures (the demise of Beta, the botched takeover of Columbia Pictures) emerged from the dizzying web of intense relationships that have always permeated its top ranks.
Nathan charts this emotional web as no other writer has or could, by drawing on his unmatched expertise in Japanese culture and his unique access to Sony's inner sanctum. The result is at once an engrossing chronicle of astounding entrepreneurship and a poignant account of loyalty's consequences. With authority and wit, Nathan dispels the myths that surround Sony and crafts corporate drama at its apex.
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Editorial Reviews

Publishers Weekly - Publisher's Weekly
Readers should be thankful that the most thorough history of Sony yet written comes from a writer steeped in Japanese culture rather than in business. Nathan, a professor of Japanese cultural studies at UC-Santa Barbara, gives a human dimension to the Japanese electronics giant, especially to its cofounders, Masaru Ibuka (the dreamer) and Akio Morita (the pragmatist), who, according to Ibuka's son, were linked by a bond of friendship and collegiality that made them "closer than lovers." Nathan had the full cooperation of Sony, including access to top officials and archives. Yet this is no puff-piece, but rather a fascinating account of how Sony succeeded despite such setbacks as the failure of Betamax and the disastrous $4.7 billion purchase of Columbia Pictures. At the center of the story are Ibuka and Morita, who strove to make Sony accepted and respected beyond Japan, especially in the U.S. Some of the most absorbing--and even poignant--sections concern the cultural divide between Japan and America. Nathan focuses on the interpersonal relationships among the company's leaders to examine what made the company tick. In addition to the interplay between Ibuka and Morita, Nathan documents the rise of Norio Ohga as the successor to the cofounders and also devotes a considerable amount of time to the relationship between Ohga and Mickey Schulhof, the highest-ranking American Sony officer before he was fired by the current Sony president Nobuyuki Idei. By mixing interviews with Sony executives with his own insights, Nathan provides readers with a thorough and entertaining history of the company that rose out of the ashes of WWII to embody Japan's postwar resurrection. (Sept.) Copyright 1999 Cahners Business Information.
Library Journal
Nathan, a professor of Japanese cultural studies at the University of California at Santa Barbara and an Emmy Award-winning filmmaker, received open access from the Sony Corporation for this history. He traces the company from its beginnings at the end of World War II to the present, providing an intimate, meticulously detailed account of how upper management made its decisions. Profiles of major players like founders Akio Morita and Masaru Ibuka, members of the inner circle such as Mickey Schulof and Harvey Schein, and present chairman Norio Ohga and president Nobuyuki Idei give the reader an understanding of the motivations behind Sony Corporation's successful innovations, like the Walkman and compact-disc technology, and failures, like the Betamax and the purchase of Columbia Pictures. Nathan also provides ample insight into how the Japanese do business. A good choice for large public and academic libraries. [Previewed in Prepub Alert, LJ 5/15/99.]--Steven J. Mayover, Free Lib. of Philadelphia Copyright 1999 Cahners Business Information.
From The Critics
I still remember my exhilaration when Sony's tiny, matte-black "Pixy" audio system arrived in my small, tatami-covered room in Japan one January afternoon in the late 1980s. The look and feel of the stereo was perfect for my teenage scheme to make the place look like a Manhattan studio. Ten years later, the stereo rests on the wood floor of my apartment in California, but continues to entertain me day and night.

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.

– Michiyo Yamada

Kirkus Reviews
A corporate biography that explores the complex, talented people who made a major company successful. Sony has a unique place in American culture, a brand name that is instantly recognizable and inexorably tied to the modern age of consumer electronics. Here readers may discover its modest beginnings in the ravaged industrial landscape of postwar Japan. Two major forces combined to make this happen: Masaru Ibuka and Akio Morita, singular personalities in a culture not known for individuality. They developed a powerful bond of friendship and a working relationship that survived disagreements and difficulties; later, other equally significant leaders emerged to help shape and propel the company. Nathan (Mishima: A Biography, not reviewed), an expert on modern Japanese culture (UC, Santa Barbara), not only recognizes and delicately profiles the human power behind Sony, he creates a masterful portrait of individuals working together—and occasionally at odds—to generate new products and businesses, including a few clunkers. Nathan also credits Sony for its pioneering work bridging the geographical and cultural gaps—defining consumers as well as businesses—between its home country and the US. Morita, more so than anyone, achieved this goal with the force of personality and perseverance. As the author suggests, critical differences between Japanese and American business cultures may never be fully erased, but readers will find here a sensitive exploration of what lies underneath the Sony corporate surface, particularly the force of loyalty and personal bonds. Also engaging are the adventures of some American executives who fell under the spell and employment of Sonyafter they were brought on board to impart American-style business practices. The author, who had the full cooperation of the company during his research, acknowledges that he sometimes got more than he expected in the candid disclosures of present and former employees. Insightful, probing, and extremely well-written; in the genre of business and company profiles, this is as good as it gets. (Author tour)
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Product Details

  • ISBN-13: 9780002570251
  • Publisher: HarperCollins Publishers
  • Publication date: 9/1/1900

Read an Excerpt




Chapter One


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 Akio 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.O. 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 alongthe 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 naïveté 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 technology 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, interfering 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 full 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 Hirohito 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.


Technology was Masaru Ibuka's lifelong passion. His father, a Christian from the island of Hokkaido, graduated from the Department of Electrical Engineering at Hokkaido University and went to work at a copper refinery north of Tokyo, in Nikko, where Ibuka was born in 1908. Following his father's death when he was two, he moved back and forth between his mother's house, first in Tokyo and later, when she remarried, in Kobe, and the home of his paternal grandfather, Motoi, who had grown up a samurai in the Aizu fief and had risen through the ranks of the civil service to the position of provincial deputy governor.

    By his own account, Ibuka adored his mother, and was desperately lonely for her during the years when circumstances required them to live apart. In 1937, the year after his own marriage, she died at age fifty-three. His stepfather phoned him in Tokyo with news that his mother was seriously ill. Ibuka took the first train to Kobe, an overnight trip in those days, but arrived too late. For ten years, he would not set foot in Kobe. In a memoir, he wrote: "For years after I got out of college I was working so hard that I neglected her ... if she were only alive now I'd bring her anything she wanted to make her happy, any treasure she could name."

    As a second-grader in Tokyo, Ibuka was given an Erector Set, which taught him, in his own words, "the excitement of putting things together." In high school he became an avid ham radio operator, a hobby he enjoyed all his life. As a student in mechanical engineering at Waseda University, he built his own electric phonograph and designed a loudspeaker system for the athletic grounds near the Meiji Shrine in Tokyo. For his graduation project in 1930, he created something he called a "light telephone," which used high-frequency sound waves to control the intensity of a light. Ibuka succeeded in using the device to "send" a visible signal as far as a mile and a half. The success of this experiment earned him a reputation as "Ibuka, the student inventor." Subsequently, he adapted the same technology to create a product he called "dancing neon," which he patented in his own name. The product was submitted to the Paris World's Fair in 1933 and won the Gold Prize for inventions. The headline in a Tokyo newspaper read, "Basking in the light of international recognition: a genius inventor."

    That same year, Ibuka took the employment examination at Shibaura Electric Company, now called Toshiba, and failed. Possibly, his focus was too internal to accommodate questions put to him by someone else. There would always be something obsessive about his intense interest in things, fixated to a point that would at times seem almost autistic. Fortunately, an entrepreneur named Taiji Uemura had heard about Ibuka's inventiveness and invited him to join his company, PCL, Photo-chemical Laboratories. Recognizing that he was not a person to be managed, Uemura gave his new employee the freedom to follow his own research interests, and Ibuka became engrossed in optical sound and its application to film. But as PCL developed a connection to the Toho film studios and began production of early "talkies," he lost interest. In 1936, he went to see his benefactor, and, explaining his distaste for film production, offered his resignation. Uemura persuaded him to transfer into a new company he had just formed to manufacture 16-millimeter sound projectors (the Japanese military was "expanding" into Asia and producing more propaganda films). Once again, Uemura gave Ibuka the run of the company, and even created a "wireless department" for him. Between 1936 and 1940, Ibuka continued his work on optical sound. As Japanese aggression in Asia expanded, he became interested in ways of combining electrical and mechanical engineering to create weapons applications, and went back to Uemura. As a result of this meeting, to provide Ibuka the opportunity to develop his new interests, Uemura founded Japan Measuring Instruments with capital he raised from the Lion Toothpaste Company.

    Under Ibuka's leadership, the company prospered during the war by supplying the military with weapons systems and related products. Ibuka developed a vessel location system, which involved amplifying low-frequency disturbances in magnetic fields and which revealed, too late in the war to allow action, twenty-five American submarines submerged in the Gulf of Formosa. The company's engineers also developed a widely used telephone scrambler and the proprietary radar system that had impressed Morita. At war's end, Japan Measuring Instruments employed fifteen hundred people in a large facility located in a Nagano apple orchard. Choosing the site at a time of heavy food rationing, Ibuka had remarked, "At least we'll have apples to eat."

    Ibuka knew more about the disastrous course of the war than he had learned from monitoring shortwave radio broadcasts: through his father-in-law, Tamon Maeda, a man who was to contribute significantly to Sony's early success, he was also privy to gloomy conversations taking place in diplomatic circles. Maeda was a well-known internationalist who had been attached to the Japanese embassy in Paris and had written editorials for the newspaper Asahi Shimbun before the war. When Japan attacked Pearl Harbor in 1941, he was in New York City working as the executive director of Japan House, and was among the first repatriates to be shipped home. During the war, under the Tojo cabinet, he was governor of the Prefecture of Niigata and, briefly, a member of the House of Peers. In the postwar cabinets of Prime Ministers Higashikuni and Shidehara, until he was purged in 1947, he was minister of education. Maeda had advocated mending the Japan—United States relationship since before the war; now, in its final moments, diplomats and politicians sympathetic to his view gathered at his summer home in Karuizawa, near the site of Ibuka's company, to discuss the future of Japan's relations with the United States following the inevitable defeat. Reports of these conversations had confirmed Ibuka's certainty that the war would soon be over.

    In the silence that followed the emperor's broadcast, Ibuka announced his decision to return to Tokyo to start again, and, without inviting anyone explicitly, communicated his desire that others accompany him. This was a delicate issue. Ibuka was managing director, but not head of the company. The senior managing director, Kenzo Kobayashi, the Lion Toothpaste heir, was opposed to leaving. In his view, only a fool would abandon a viable business in the safety of the countryside, where there was food to eat, for the chaos of a devastated Tokyo.

    Once Ibuka had made up his mind, he was unswervable. He pointed out that Japan Measuring Instruments was fundamentally a weapons manufacturer and would not be equipped to take advantage of the peacetime market. More important, the hub of new research and development in Japan would be Tokyo: any engineer who hoped to work on the cutting edge of technology would have to do it there. The debate ended with Kobayashi's decision to wait and see in Nagano. Ibuka asked his benefactor for permission to leave, and it was reluctantly granted. Seven of the company's engineers volunteered to go along, including Akira Higuchi, who, for the second time, left a steady job to follow Ibuka; in 1937, he had been lured away from a parts supplier called Nanao Wireless to join him at Japan Optical Sound. "I said `Yes!' in two shakes and left without a second thought," Higuchi recalls. "It was as if we were communicating telepathically. I followed him then, and I never left him." This time, Higuchi left his wife and mother behind in Nagano for over a year until he was able to bring them to Tokyo.

    On September 2, 1945, the Japanese surrender was signed aboard the USS Missouri in Tokyo Bay. Early in October, Ibuka and his seven engineers moved into the Shirokiya Department Store building in Nihonbashi, for 350 years the center of Tokyo's business district. Having no merchandise for sale, the store was housed on the street level of an otherwise abandoned seven-story wooden building that had been burned in the firebombing. Ibuka had prevailed on an acquaintance to sublet to him what had formerly served as the telephone switchboard room on the third floor: the engineers pushed the disconnected switchboard into a corner, moved a worktable and drill presses into the cramped space, and set up shop as the Tokyo Telecommunications Research Institute. (Akira Higuchi had suggested "Ibuka Telecommunications" and had been scolded by Ibuka for being "an idiot!") The name resounded grandly, but it was far from clear, and would remain unclear for some time, what the company could or should do, not merely to support itself, but to come anywhere near realizing Ibuka's vision for his new business.

    History's great entrepreneurs have been endowed with the capacity to perceive sharply things that are invisible to ordinary eyes. Ibuka possessed this gift, and he could envision the company he wanted to build in detail even as he looked out across the nightmarish wasteland that was Tokyo in 1946. In January of that year, he set down his dream in a ten-page document he called "The Founding Prospectus." The original, in Ibuka's cramped, engineer's hand, has been preserved at Sony and may be viewed by special request, delivered to a reading room by a nervous freshman employee wearing white gloves. In the opening lines, Ibuka declares that his company will be designed by and for engineers: "My first and primary objective was establishing a stable workplace where engineers could work to their hearts' content in full consciousness of their joy in technology and their social obligation." Later he reiterates in words that have been preserved in the amber of Sony culture and can be quoted verbatim by employees even today: "Purpose of incorporation: creating an ideal workplace, free, dynamic, and joyous, where dedicated engineers will be able to realize their craft and skills at the highest possible level."

    In a section he called "Management Policies," Ibuka revealed the idealism and naïveté that would later pose challenges to his more pragmatic partner. The following dictum about profit and growth, for example: "We shall eliminate any untoward profit-seeking, shall constantly emphasize activities of real substance, and shall not seek expansion of size for the sake of size." Elsewhere, in a section on service, he remarks on the absence of reliable dealers to repair radios damaged during the war and cautions: "We must place profit here as a secondary motive. Our service commitment should be pure and total, including even the preparation of a pamphlet that will explain to ordinary customers why their radios are in need of repair, in a manner they can understand." Ascending to even higher seriousness of purpose, he continues: "Some future tasks of our service department should include introducing the latest technology from abroad, maintaining a library of current texts on telecommunications, and establishing a lecture series to spread and extend general knowledge of electronics among consumers."

    Given the national mood, which had never been bleaker, Ibuka's idealism was remarkable. The war had cost Japan roughly 25 percent of its total wealth. Most of the major cities had been destroyed, leaving millions homeless. Tokyo, like Hiroshima, Nagasaki, Nagoya, and Osaka, was in ruins: in 1946, an estimated 47 percent of its inhabitants had no roof over their heads. There was no public transportation; all of the city's trolley cars, and most of its buses, had been destroyed. Disease was endemic; in the winter of 1946, 20 percent of the urban population was afflicted with tuberculosis. That same winter, and the severe winter following, homeless people in the city's parks froze to death in their sleep.

    Nearly seven million soldiers had been left stranded in China and Southeast Asia; more than half a million men came home to Tokyo and were met coldly, like the American veterans of a later war, by a nation that did not wish to be reminded of the dream from which it had been brutally awakened. There were no jobs. Soldiers lined the streets begging in their tattered uniforms or joined the outlaw gangs of yakuza with brass coins in their ears who ran the burgeoning black market in rice, fuel, and clothing. In 1946, annual per-capita income was seventeen dollars.

    People felt more than simply deprivation; the humiliation of defeat was in the air. Japanese girls, known as "onlys," shacked up with GIs in return for nylons and canned goods from the military commissary. Adults scrambled with children for the sticks of chewing gum that Americans threw into the street from their trucks. According to memoir by Kenzaburo Oe, sugar was so scarce that a whiff of an empty gum wrapper could make a man dizzy. It was a dark, lawless, despairing time. The novelist Osamu Dazai, a troubador of hopelessness and self-pity, became a national icon with the line, known to every Japanese, "I can offer no excuse for having been born!"

    Paradoxically, it was also a jubilant time. The apocalypse in the form of the atomic bomb had come and gone, and there was life to be lived. The leftist critic Masahito Ara beautifully expressed the exuberant energy released by this realization in his February 1946 essay "A Second Prime of Life":


When I first read that Dostoevsky had been condemned to death and then reprieved only a moment before his execution, I was filled with envy close to despair. It was not his genius that I envied so much as that abnormal experience of his that not one in a thousand or even a hundred thousand can have.... However, what we have just experienced with the Defeat has been in no degree less traumatic than that great Russian writer's experience. Until the emperor announced the unconditional surrender, we were prepared for collective suicide. During the air raids we had entrusted our precious lives to some corner of an air-raid shelter not fit to be called a garbage can. For years, we had been obliged to consider the severance of all bonds of love and affection for a draft notice the highest honor.... For those incapable of ending their lives with the slavish cry Banzai for his imperial majesty, it is no exaggeration to reflect that the thousand days now over were a living hell.
Looking back, it is clear that this past year has been a year of miracles. We have seen hell, we have known heaven, we have heard the last judgment, witnessed the fall of the gods and witnessed before our eyes the creation of the heavens and the earth. We have accumulated incredible experiences rarer even than Dostoevsky's.


While the nationalist in Ibuka might have been affronted by Ara's Marxist view of the war, he would certainly have affirmed the critic's notion of "a year of miracles" and "a second youth," a time of optimism and renewal.

    The first four years of Sony's history, from 1946 to 1949, are about a small company struggling to stay alive as it searched for a product of its own worthy of Ibuka's expectations. In the beginning, any means of making honest money had to be considered seriously: suggestions ranged from selling sweetened miso soup to building a miniature golf course on a burned-out tenement lot.

    The company's first innovation was an electric rice cooker. In 1946, a crude toaster oven, which transformed unbleached flour into burned bread, was enjoying a vogue. As food was a national concern, and electricity was more accessible than fuel, Ibuka liked the idea of an electric cooker, but, as always, he was loath to imitate a product already on the market. Instead, he fitted the bottom of a wooden tub with an aluminum filament to create a rice cooker. If there was anything clever about the design, it was his idea that the rice itself would function as a timer switch; as the water steamed away and the rice dried, it would theoretically break the connection with the filament and turn off the appliance. Someone knew a place outside the city which sold wooden tubs and he arranged for a truckload, but the mechanism never functioned reliably and the cooker was unsellable. The abandoned tubs were stored on a wall of shelves in an early Sony warehouse. Standing before them during a television interview, Ibuka reminisced: "We bought more than a hundred of these tubs in Chiba and made them into rice cookers. The problem was, in those days you never knew what quality of rice you were getting. With good-quality rice, if you were careful, it came out fine. But if the rice was just a little off, if it was too moist or too dry, we'd end up with a batch that was soggy or falling apart. No matter how many times we tried, it just wouldn't come out right. This is such a simple device, there was nothing to fix! I remember sitting there on the third floor in Shirokiya day after day being fed rice that wasn't fit to eat. We simply couldn't make a product out of this, and finally we gave it up and were stuck with all these tubs."

    Fortunately, there were radios to be repaired. After the war, radios were increasingly in demand as a source of music and world news. Many had been damaged during the bombing. And the military police had disconnected shortwave units to prevent access to American propaganda. Ibuka's team reconnected the shortwave coil and developed an adapter that converted medium-wave into all-wave radios. This innovation equipped sets to receive international news on shortwave and readied them to receive local broadcasting when it was reinstated.

    On October 6, 1945, the journalist Ryuzo Kaji featured the company's work on radios in his column "Blue Pencil," in Japan's second largest newspaper, the Asahi Shimbun:


We have welcome news that even the most ordinary radio sets can be modified to receive shortwave broadcast with a simple adjustment. Mr. Masaru Ibuka, formerly a lecturer in the Department of Science and Engineering at Waseda—and Minister of Education Tamon Maeda's son-in-law—has gone into business under the name of Tokyo Telecommunications Research Laboratory. With offices on the third floor of the Shirokiya Building in Nihonbashi, Mr. Ibuka has set out quite apart from any commercial motive [italics mine] to augment the use of shortwave receivers by modifying normal receivers or by connecting adapters.... When, in the near future, private broadcasting is licensed again and broadcasting begins on a number of different frequencies, it will be very difficult to tune through the "twist of wires" with a conventional radio set, but Mr. Ibuka assures us that the rebuilt sets or those fitted with his adapter will have no trouble picking up the new signals.


    The positive bias of the article—"quite apart from any commercial motive"—is in part explained by the fact that the journalist was a friend of Tamon Maeda's, who had introduced him to his son-in-law. The Asahi Shimbun, a single page at this time, was widely read, and Kaji's column drew a line of customers to the Shirokiya with radios in their arms. Akira Higuchi recalls the repair business with glee: "People would bring in these deluxe American radios. Sometimes all the coils had been removed, but often we'd open them and find that a military policeman with a good head had simply clipped the shortwave coil in one spot. All we had to do was solder it together again and the radio was fixed and we could charge for it!"

    But radio repair would not suffice to keep the company alive. Ibuka's mainstay during the first three years was a product that his engineers had developed during the war, a voltmeter driven by vacuum tubes. "Not only is this product highly admired in our own country," he wrote in the "Prospectus," but "the U.S. Occupation Army was so fascinated by it that they took one back to America to use as a benchmark, eloquent proof that we can hold our voltmeter up proudly to the entire world!" The inflated language conveys Ibuka's pride at having earned the admiration of American technicians: for many years to come, the postwar recovery would be fueled in large measure by a deeply felt need to catch up with American technology.

    Ibuka calculated that he could meet payroll by selling ten voltmeters a month, but by the end of the first year, monthly production had reached thirty to forty. To achieve this volume, the engineers worked late into the night, letting themselves in and out of the department store on the first floor, which locked its doors at 6:00 P.M., with improvised passkeys. Akira Higuchi, who had been appointed factory manager, remembers being caught by security men working for the department store more than once.

    Because the tools necessary to assemble the voltmeters were not available, the engineers had to make their own. The streets were littered with useful things that had been abandoned, including motorcycle springs, which they converted into screwdrivers. The vacuum tubes that powered the meters had to be hunted out of boxes of junk in black market stalls in Akihabara and Ueno, a district dubbed "Ame-yoko-cho"—Yankee Alley—because of the GIs who sold contraband from military bases. Only fifty in every lot of one hundred tubes performed to the voltmeter's specifications.

    As business grew, the company moved from the switchboard room on the third floor to the entire seventh floor, the only other habitable floor in the ruined building. But in August 1946, after Morita had joined the company, Shirokiya decided to open a dance hall for Occupation troops and asked Ibuka to vacate. Higuchi remembers a line of auditioning dancers watching him and the others with amusement as they prepared to move. The question was where to go; commercial space in Tokyo in 1946 was hard to find. Through his connections at Yokogawa Electric, Ibuka managed to sublet two factory spaces, both on the outskirts of Tokyo. One, in Mitakadai, the Tachifuji plant, garaged fire engines. On sunny mornings Ibuka's men could drive the engines outdoors, but this was not permitted when it was raining, and the men had to work around them. Before long, the company was asked to vacate once again because they were consuming too much electricity at a time when it was still rationed. Late in the year, Ibuka went looking for a space large enough to accommodate the entire operation, and found a dilapidated wooden building that had escaped burning on Gotenyama Heights in the southern part of the city, near the harbor. Gotenyama had once been known for the beauty of its blossoming cherry trees, but in the winter of 1947, when the company moved in, it was a desolate ruins. Today, Sony's worldwide headquarters stands on the site of the wooden building known as "the factory on the hill."


Akio Morita listened to the emperor's broadcast on August 15, 1945, in his ancestral home in the seaside town of Kosugaya, south of the commercial city of Nagoya in central Japan. Following the bombing of Nagasaki on August 9, he had received orders to travel to Nagoya on navy business, and had been granted a day's leave to visit his family. As he left his unit in Zushi, he angered his superior officer by informing him that he would not be returning should the surrender be announced while he was away: Morita suspected, correctly, that officers would be ordered to commit ritual suicide by hara-kiri when the war was lost, and he was not prepared to die a martyr's death for the imperial cause.

    Nonetheless, informed by his mother on the morning of August 15 that the emperor would speak at noon, he dressed in his officer's uniform and strapped on his sword in preparation for the broadcast. His younger brothers, Kazuaki, twenty-two, and Masaaki, eighteen, stood at attention at his side as the emperor announced the end of an era. The younger boys were also in the Imperial Navy. Kazuaki had been drafted while a student in economics at Waseda University, and Masaaki and his entire middle school class had enlisted. As the war ended, both Morita brothers were being trained to fly suicidal kamikaze missions at the navy's flight academy: if tears were shed in the Morita home that day, they were tears of joy.

    The house of Morita was a prosperous merchant family who had been doing business in the Nagoya area of central Japan since the early seventeenth century. The family business was sake. In its brewery in Kosugaya, Morita Company distilled from rice a regional blend of sake called nenohi. The company also made miso, the fermented soybean paste from which the Japanese make their daily soup, and soy sauce. Morita's great-grandfather and grandfather had allowed the business to decline, devoting their time to building the family collection of Chinese and Japanese art and porcelains. Morita's father, recalled from his study of business administration at the newly founded center of Western learning, Keio University, had restored the business to prosperity: Morita and his two younger brothers and sister had grown up in affluence in a sprawling house in Nagoya's finest residential district, Shirakabe-cho, "white-birch park." Like the other families on the street, the Moritas had a large garden, a tennis court, a chauffeured car, and servants.

    In Morita family tradition, the eldest son of each generation took the first name Kyuzaemon on becoming head of the family. Morita's father was Kyuzaemon Morita the Fourteenth. From the day he was born, January 26, 1921, Morita was raised to become the fifteenth-generation Kyuzaemon. At formal gatherings, the family hierarchy was reflected in the seating order, which, though never explicitly diagrammed, was inviolable: as the eldest son, Morita sat at the head of the long banquet table, at his father's side. Next came his uncles, his aunts, and finally, at the end of the table, his cousins and two younger brothers and sister. From the time he was six, Morita accompanied his father to the annual New Year's Day meeting at the company and sat with him on the dais as he delivered his New Year's speech to Morita employees. At age ten, he was required to attend board meetings and to sit in on private conferences at home between Kyuzaemon and company managers. As a middle school student, he participated in inventory checks, counting bottles stored in Morita warehouses. He was even taught to taste sake from the midwinter barrels to check the maturation process. Summers, when the family returned to the house in Kosugaya to spend a month at the beach, Morita's father would halt the car along the way and, pointing to a family warehouse full of sake or soy, remind his oldest son, "All this belongs to you. You will be the boss!"

    The middle Morita brother, Kazuaki, remembers vividly and with seeming equanimity the preferential treatment his elder brother received. As the second son in the family, he did not expect to be treated equally, and he moreover enjoyed the freedom to do what he liked with his spare time. There were occasions when he was also required to accompany his father on business, but it was somehow made clear, in the implicit way of Japanese families, that he was along for the ride. As it happened, Kazuaki would end up running the family business. The youngest brother, Masaaki, who was to have a distinguished career at Sony but would never head the company; was left alone to play with his model airplanes and dream of becoming a pilot.

    While still in elementary school, Morita developed a fascination with mechanics. He began disassembling appliances at home, and his reading shifted from schoolbooks to technical manuals: before long, he was building his own vacuum tube radios and devising clock radio switches. Kazuaki observed this development with uneasiness. "At some point," he recalled, "I began to wonder if my brother really intended to take over the business as Father expected."

(Continues...)

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Table of Contents

Acknowledgments
Preface
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
Index 327
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Foreword

From the Dust Jacket:
From its inauspicious beginnings amid Tokyo's bomb-scarred ruins to its role as the world's chief purveyor of electronics and mass culture, Sony's story is one of the signal fables of our age. In Sony: The Private Life, John Nathan, a preeminent expert on Japanese culture, dissects this fable, pulling the veil from one of the world's most successful and secretive corporations. He uncovers persuasive evidence that Sony's biggest triumphs, from color TV to CDs, and most calamitous failures, like the Betamax debacle and the vexed takeover of Columbia Pictures, stem from the web of intense relationships that have always characterized its top ranks.

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.

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