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Former Sony Corp vice chairman hits out at firm’s current strategy, calls for more “engineers” on the board

By | Published on Wednesday 29 April 2015

Sony Corp

Whereas it was a tetchy shareholder who recently laid into management strategy at Universal Music owner Vivendi, it’s a former vice chairman hitting out at the leadership of Sony Corp. So that’s fun.

The Sony conglom, of course, has been through some ‘challenging years’, with its one-time cash cow consumer electronics division sliding big time, not to mention the impact of natural disasters, hacks of user data on its PlayStation Network and the big fat email steal at its US entertainment division last year, which continues to cause embarrassment.

Since taking over as CEO in 2012, Kazuo Hirai has been busy restructuring – and streamlining – the consumer electronics side of the business, selling off computers, and spinning TVs and audio into standalone units. Earlier this year the Sony boss said he was prioritising gaming, music and imaging technologies, admitting he could as yet sell off the conglom’s television manufacture and smartphone businesses.

It’s a strategy that has been welcomed by some in the investment community, who were also pleased when the firm reduced its projected loss for the financial year just gone, and who are expecting top guard at the group to predict a return to profit this coming year. But the shift away from consumer electronics is not popular with some in the Sony old guard.

And according to Tamotsu Iba, a former Chief Financial Officer and Vice Chairman at Sony Corp, Hirai’s grand plan risks “sinking” to business. According to the FT, Iba wrote in a letter earlier this month: “Sony is like a ship that is navigating through the stormy waters of the electronics business with a captain that is using the wrong sea chart. If it continues to navigate the stormy ocean without the correct map, Sony will face the danger of sinking”.

The FT notes that such criticism from Sony old-timers in Japan is not especially unusual, with many nostalgic for the company’s hey day as the worldwide king of consumer electronics, and resenting the fact the last two CEOs of the Corporation have come from the entertainment rather than electronics side of the business.

Reflecting that, Iba calls for more engineers to be appoint to the company’s board, arguing that the firm has lost “the Sony spirit”. He told the FT earlier this week: “I don’t see any vision for what Mr Hirai wants to do with the electronics business”, adding that the current CEO should stand down if he doesn’t heed his advice to promote more engineers to the top.

None of which is likely to change Hirai’s current strategy, providing investors stay generally supportive of his current plan (whereas Vivendi, having a tetchy shareholder, had to do some placating), though it shows he is yet to convince everyone in the wider Sony family that he knows what he’s doing.