Akio Morita ( Deceased )

Engineer, Technologist

Former Chairman of Sony Corporation

AKIO MORITA AND SONY

This is a synopsis taken from the "Great Business stories" and on Akio Morita and the company he founded with Masaru Ibuka. This is a compelling book and gives an insight into the minds of great entrepreneurs and their spirits. Sony is a brand name so well known all over the world that it is next only to Coca Cola* in brand awareness and the second most valuable brand after Coca Cola.Many of us do not get the time to read entire books and we are giving below the synopsis for easy absorption.( * Recently Coca Cola was replaced by Microsoft as the most valuable brand in the world)

It was founded in 1946 by Akio Morita and Masaru Ibaki in a bombed out department store after World War II. At that time Morita was 24 years old and a University Graduate. When Morita was working on a project on heat seeking devices , he came across Masaru Ibuka , a brilliant electronics engineer and convinced him to join him as a partner and formed an electronics company. The original name was " Tokyo Isushin Kogyo Kabusaki Kaisha ". In 1947 it moved into a dilapidated building with holes in the roof to start their operations.It should be noted that Morita never invested any large sums of money in fancy offices and headquarters but all its offices are functional but meet the needs of its employees more than adequately.How I wish that many organizations realize this today. I know of some organizations who have excellent headquarters but no working capital.

Its first product was an audio tape recorder which weighed 35 Kgs and costing 170,000 yen. Morita had to educate the customers so that they were ready to buy his product. This happens with any new product and unless you educate the potential customer on its benefits you will not be able to sell. By 1963 , Sony was able to miniaturize their products , a specialty of Japanese and could offer a car radio which could also be removed and kept anywhere.Sony pioneered many innovations on Transistors and their objective was to keep their products as small as possible.

In one of his overseas visit , Morita realized that their company's name was too difficult and Japanese and in those days Japanese goods were considered cheap but not of good quality. He selected a Latin term "Sonus" which meant Sound and bright young men in Japan were also called "Sonny".The company decided to adopt the name of "SONY" and a legend was born.

One of the lessons Morita learnt in his earlier business days was that there was no point in having a perfected product if there was no demand for it. He admitted " I then realized that having unique technology and being able to make unique products are not enough to keep the business going. You have to be able to sell the products and to do that you have to show the potential buyer the real value of what you are selling." One of the areas he excelled was in controlling his costs and pricing and he was a pioneer in offering quantity discounts which is fairly common these days.

In 1961 Sony was to face its first and probably its only serious problem with workers unions.Morita was able to ward off this threat because of excellent relations with his employees.Morita believed that unless organizations created and shared a sense of fate and belonging with its employees it would not succeed. His philosophy was that the management's should work for the good of everyone.The concept of lifetime employment was probably born here.

The pressure within Sony to be innovative and forward looking has always been huge. Morita took the unusual step of encouraging his engineers and other employees to work in different areas and they could choose a project of their choice within the company.This helped Morita to build up the company in different areas.He also adopted the policy of being close to the markets and he put up plants all over the world where he found large markets for his products.

Morita noticed that a lot of young people were carrying Radios,Players on their shoulders listening to music as they went about and the idea of a compact portable radio/player obsessed him and the "Walkman" was born. It went on to become the largest selling single product of Sony.

SONY'S SUCCESS:

It had a fundamental and shared vision with all its employees. The family feeling was developed and fostered.

The road of the pioneer is full of difficulties but inspite of many hardships people of Sony always united harmoniously and closely because of their joy in participating in creative work and their pride in contributing their own talent to their pursuit of goals.

The accent was always on Technological superiority and selling skills.They believed Technology is no obstacle only cost and imagination is.

Sony followed the policy of Right person in the right job.

It was always a pioneer at the same time its products met the lifestyle needs of its customers.

It focussed on R & D and spent a large percentage of its earnings to maintain competitive edge.

Once the decision was taken to launch a product it was all systems go at Sony and no time was wasted. Akio Morita was often quoted as saying " Companies that do not work hard - Disappear.

It would be impossible to convey everything mentioned in the book but we have tried to be as brief and as informative as possible.

Note added on April 14, 2001

I have for a long time believed that Engineers & Technologists are best suited to Manage any business. This is not because I am an Engineer and understand Technology very well. I can also interpret Financial information and analyze balance sheets as good or better than an Accountant. This is because all Engineers have to be strong in Mathematics and Analysis. I am yet to come across an Accountant, who can grasp even the basics of Engineering or Technology. Majority of them have poor inter-personal skills and when it comes to HRD, generally they are very poor. But by experience, I have also noticed that Accountants, who are very good in their job and who are Honest are invariably, the least popular and hated. I always go for the hated ones because they are the ones you can rely on. Accountants who are in the popularity contest are the worst and never trust or pick them in your team. In fact, the higher the unpopularity rating for an Accountant, higher is his integrity and competence. However, I agree fully with Mr. Robert Townsend when he calls " Accountants ' bean counters' and says that they should never be put in charge of organizations " - except Accountancy firms. This is written without any prejudice to the Accountancy profession.

Another area of concern is, that many companies prefer MBAs for Marketing function and reject Engineers. This is another myth. Engineers can be as creative and imaginative as any one else. The problem is to identify them. There are too many prejudices and myths in Industry promoted by vested interests. Probably the best combination would be Engineer + MBA to manage any business. Of course, there are always exceptions and you will find good Accountants or non-engineer MBAs and many others from other disciplines, as good as any.

Nothing was more satisfying than coming across the opinion of the great Akio Morita's, on the subject. This was also accidental, as we found that the following site was linking to us, very recently. We have also given reciprocal link to it.

Aikio Morita - Stofnandi Sony

"Thus, in order to succeed in maintaining and strengthening the vital manufacturing base of the economy, it is crucial that society helps to encourage the development of more engineers and 'technologists'.

The key to competitiveness in a borderlines, 'high tech' world does not lie beneath the microscope lens of the laboratory scientist, but on the drawing boards and computer screens of electrical engineers, software developers and design experts.

At the same time, I believe we should not only encourage more young people to pursue engineering studies, but we must also - on the corporate level - advance young technologists through the managerial ranks. Manufacturing and high technology corporations must be led by those who understand not just business but technology as well. Just as you wouldn't have a rugby coach who never played the game, how can someone who doesn't understand the workings of technology take the reins of a manufacturing operation? How could that kind of person make the correct, intuitive judgments regarding R&D budgets, factory automation and the unseen potential of new technology?

In Japan, you will notice that almost every major manufacturer is run by an engineer or technologist. However, here in the UK, I am told some manufacturers are led by CEOs who do not understand the engineering that goes into their own products. Someone once mentioned to me that many UK corporations are headed by Chartered Accountants. This strikes me as very curious. Though I have a great deal of respect for accountants and financial professionals I do nor believe they should be at the helm of industry.

For an accountant, the central concern is statistics and figures - of PAST performance.

So how can an accountant reach out and grab the future if he is always looking at LAST quarter's results? "

Ref: "S" DOES NOT EQUAL "T" AND "T" DOES NOT EQUAL "I"
The First United Kingdom Innovation Lecture, 1992 by Akio Morita,
Chairman Sony Corporation
http://www.london-innovation.org.uk/skills/lectures/lecture1992.htm

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