Introduction
Communication is the process of sharing ideas, information, and messages with others in a particular time and place. Communication includes writing and talking, as well as nonverbal communication such as facial expressions, body language, or gestures, visual communication the use of images or pictures, such as painting, photography, video, or film, and electronic communication such as telephone calls, electronic mail, cable television, or satellite broadcasts. Communication is a vital part of personal life and is also important in business, education, and any other situation where people encounter each other. Businesses are concerned with communication in several special ways. Some businesses build and install communication equipment, such as fax or facsimile machines, video cameras, CD players, printing presses, personal computers, and telephones. Other companies create some of the messages or content that those technologies carry, such as movies, books, and software. These companies are part of the media or telecommunications industries (1989). Communication is vital for the improvement of businesses and people.
Organizational communication is important in every business. People in organizations need to communicate to coordinate their work and to inform others outside the business about their products and services. These kinds of communication are called advertising or public relations. Societies have attempted to regulate communication through customs and laws since ancient times. Today many societies regard freedom of communication as a basic human right and have enacted laws to protect this right. As new communication media have developed, such as television and cellular telephony, US’ Federal Communications (FCC) and its counterparts in other countries has grown to supervise and regulate those industries as well in an attempt to keep pace with advances made in communications technology and changes in the industry (1989). Most observers agree that communication media and technologies have contributed to a society that is changing very rapidly. Three key issues have arisen in the tide of this rapid change: individual privacy, coverage of politics in the media, and the availability of information. New communication and information technologies have enabled many organizations and people to collect, organize, and sell information about other people and organizations, both quickly and cheaply.
The easy availability of personal information makes banking, education, health care, and sales much more convenient for both consumers and sellers. Credit card and automated teller machine (ATM) systems would be impossible without large databases of information available on demand. Scanners in the supermarket rapidly and accurately record every item that passes over them, making grocery checkouts faster and error free. Companies maintain huge mailing lists of customers that record not only their names, addresses, and phone numbers, but also major recent purchases, credit ratings, and demographic information that helps the companies identify target markets for specific products (1989). The paper will discuss about telecommunications and its industry, two companies in it Sony and Ericsson, and company mergers. The paper will discuss responses to the different questions on what motivated the two companies to forge the alliance? Were there any alternative ways better than forming a joint venture has encountered since the formation? Do the strategies Sony Ericsson has used to address these problems will lead to the long term success of the alliance? The information acquired will be used to create a conclusion.
Telecommunications
Telecommunications are devices and systems that transmit electronic or optical signals across long distances. Telecommunications enables people around the world to contact one another, to access information instantly, and to communicate from remote areas. Telecommunications usually involves a sender of information and one or more recipients linked by a technology, such as a telephone system, that transmits information from one place to another. Telecommunications enables people to send and receive personal messages across town, between countries, and to and from outer space. It also provides the key medium for delivering news, data, information, and entertainment. Telecommunications devices convert different types of information, such as sound and video, into electronic or optical signals. Electronic signals typically travel along a medium such as copper wire or are carried over the air as radio waves. Optical signals typically travel along a medium such as strands of glass fibers. When a signal reaches its destination, the device on the receiving end converts the signal back into an understandable message, such as sound over a telephone, moving images on a television, or words and pictures on a computer screen (1993).
Telecommunications messages can be sent in a variety of ways and by a wide range of devices. The messages can be sent from one sender to a single receiver or from one sender to many receivers. Personal communications, such as a telephone conversation between two people usually involve point-to-point transmission. Point-to-multipoint telecommunications, often called broadcasts, provide the basis for commercial radio and television programming. Telecommunications begin with messages that are converted into electronic or optical signals. Some signals, such as those that carry voice or music, are created in an analog or wave format, but may be converted into a digital or mathematical format for faster and more efficient transmission. The signals are then sent over a medium to a receiver, where they are decoded back into a form that the person receiving the message can understand. There are a variety of ways to create and decode signals, and many different ways to transmit signals (1993).
Telecommunications systems deliver messages using a number of different transmission media, including copper wires, fiber-optic cables, communication satellites, and microwave radio. Wire-based telecommunications provide the initial link between most telephones and the telephone network and are a reliable means for transmitting messages. Telecommunications without wires, commonly referred to as wireless communications, use technologies such as cordless telephones, cellular radio telephones, pagers, and satellites. Wireless communications offer increased mobility and flexibility. In the future some experts believe that wireless devices will also offer high-speed Internet access. Individual people, businesses, and governments use many different types of telecommunications systems. Some systems, such as the telephone system, use a network of cables, wires, and switching stations for point-to-point communication. Other systems, such as radio and television, broadcast radio signals over the air that can be received by anyone who has a device to receive them. Some systems make use of several types of media to complete a transmission. All telecommunications systems are constantly evolving as telecommunications technology improves. Many recent improvements, for example, offer high-speed broadband connections that are needed to send multimedia information over the Internet (1993).
Background of the company
Sony Corporation is a Japanese electronics manufacturer, with headquarters in Tokyo. Sony designs, manufactures, and sells electronic equipment. It is a leader in the development of consumer electronics goods, such as videocassette recorders, cellular and cordless telephones, compact disc equipment, and television systems. Sony also manufactures computers and related devices (2003). Sony actively encourages innovation by its employees. Design engineers are given budgets and time for innovation and experimentation. The company holds an annual contest in which engineers show off their prototypes; bonuses are awarded to those whose prototypes are selected for eventual manufacture and marketing. Sony continually makes and offers new products, most of which are tested in the Japanese market. Sony has been particularly successful in the United States market; however, it is outsold in Japan and elsewhere by Matsushita, another Japanese electronics giant (2003).
Sony started with twenty people in 1946, and has grown to 8,000 people in twenty years. In keeping up with such a rapid growth, the company could not depend on the usual yearly hiring of freshmen. Sony gathered a wide variety of personnel by such methods as personal acquaintance, and public announcement. As a result, school history and seniority are never considered by Sony’s management. Only the ability and qualifications of a person are considered basic factors for personnel assignments. However, as the company started to grow, Sony’s management began to face pressure from the traditional Japanese social influences. To maintain its freedom to act, management thereupon decided to delete a man’s school history from his personnel record. It was a bold step to take in Japan. But it resulted in greatly boosting morale, among Sony employees. This decision created a sensation and was highly appreciated by the people who are trying to introduce modern management in Japan (1969).
On the other hand, Sony management became aware that it was a mistake to disappoint the men and their families by completely abolishing the seniority promotion system. For the seniority concept is a firmly established business and social practice in Japan. Still, to keep active and adjustable to keen international competition, and to the fast-developing electronics technology, Sony must have flexibility in personnel management. A compromise has therefore been developed. Sony gives such titles as assistant manager, manager, and general manager to people on the traditional seniority basis. But the functions and the range of responsibility of a section or department are set according to the capacity of the person who assumes the management of that section or department. To carry this idea out, Sony, being flexible, changes its organization as frequently as necessary (1969).
Sony Corporation, considered the most progressive in the Nikkei Corporate Reform Survey, has a very high foreign ownership of 45.3 per cent. This exceeds the total ownership of Japanese financial institutions which run at only 14.9 per cent. This unique characteristic may well be the main stimulus for Sony’s pioneering position in quasi-US corporate reform (2001). In a transnational corporation, strategic decision making is either centralized, decentralized, or a combination of both. The level of autonomy granted to a foreign subsidiary depends on a number of factors, including the type of product or service being sold, capital and resource requirements, and the financial impact that the affiliate’s performance has on the company’s overall operations. In a centralized management approach, foreign subsidiaries have limited decision-making authority and most important matters are made by senior-level managers. The Sony Corporation, for example, is very much a centralized company. The company’s board of directors is mostly Japanese and strategic decision making occurs principally in the Tokyo headquarters (2001). In October of 2001, the consumer electronic giant Sony Corporation pooled resources with the Swedish phone maker, Ericsson, to launch a joint venture named Sony Ericsson Mobile Communications SEMC. As of 2003, Sony Ericsson was still making losses. Yet both sides had pledged more resources into the venture.
Motivation to form the alliance
To compete in an international business environment, firms are forming joint ventures as a mechanism for the enhancement of global competitiveness. In recent years, an explosion of International Joint Venture (IJV) activity signifies this form of alliance as a popular vehicle for augmenting strategic capability. International joint ventures are formed for a variety of reasons. International companies create venture partnerships to gain foreign market access, for the acquisition of new technology, to fund capital requirements beyond the capability of a single firm, or in order to share risks. Joint ventures are also a vehicle through which companies can gain broader scale sourcing of materials required for their operations. The possibility exists for both the joint venture and parent firms to learn new skills from one another, and to share technology or information as a result of the venture. Many of these elements are essential ingredients for companies that aim to compete in an international arena where competition is fierce, and where requirements for quality, innovation, and meeting customer requirements are critical (1995).
Although there are clearly potential economic and technological benefits that result from firms venturing together, the failure rate of joint ventures is high. For example, in a study of 880 joint ventures and cooperative alliances, only 45 percent of the companies were judged successful by all sponsors. Some factors that lead to JV failure include: significantly different goals of parent firms; perceptions of unequal costs and benefits; and conflicts over decision-making, managerial processes, and corporate values. Misunderstanding is most likely when international joint ventures span diverse national cultures, and when attitudinal and value differences exist between different groups in the venture. Problems often arise when executives in the parent companies attempt to impose their standards and policies for operation on the joint venture firm (1995).
International joint ventures represent a unique form of the globally oriented corporation, with the greatest incidence of collaborative agreements between two partners. The management of joint ventures is a complex process. If parent firms decide that a joint venture is required to accomplish desired strategic goals, then the partners must be prepared to deal with difficult issues related to joint ownership and joint decision-making in the venture. In successful joint ventures, much advance planning is required, and the venture is likely to be championed by senior executives in the parent firms (1995). Sony and Ericsson opted to indulge in joint venture so that they can acquire complimentary with significant synergy effects. The companies believed that by engaging in joint venture both can acquire benefits from each other. Both believed that the different weaknesses they have can be covered or solved by each other. The two companies also taught that by engaging in joint venture they can withstand competition not only in the local setting but in the international setting as well.
Alternative ways
The 1980s produced approximately 55,000 mergers and acquisitions in the United States alone. The value of the acquisitions during this decade was approximately .3 trillion. As impressive as these numbers are, they are small in comparison to the merger wave that began in the earlier 1990s, approximately in 1993. The number and value of mergers and acquisitions have grown each year since 1993. For example, in 1997, there were approximately 22,000 mergers and acquisitions, roughly 40 percent of the total during the whole decade of the 1980s. Perhaps more important, the value of mergers and acquisitions in 1997 was .6 trillion. In other words, the acquisitions completed in 1997 were valued at 0 billion more than all acquisitions during the 1980s. Interestingly, the 1980s were often referred to as a decade of merger mania. The year 1998 was no different, as noted by the huge M&A transactions listed earlier; it was predicted to be another record year (2001). Interestingly, the 6,311 domestic mergers and acquisitions in 1993 had a total value of 4.5 billion for an average of .2 million, whereas the mergers and acquisitions announced in 1998 had an average value of 8.2 million for an increase of 352 percent over those of 1993.
Approximately .5 trillion in mergers and acquisitions were announced in 1999, continuing the upward trend. The mergers and acquisitions in the 1990s represent the fifth merger wave of the twentieth century and their size and number suggest that the decade of the 1990s might be remembered for mega merger mania. With five merger waves throughout the twentieth century, we must conclude that mergers and acquisitions are an important, if not dominant, strategy for twenty-first century organizations (2001). One alternative for the companies is merger. Through merging the companies can share 100% of its resources and the different culture and tradition of the companies is erased to bring up one new and improved culture. Merger can lessen instances of having to deal with different intentions. Merger also changes the goal of the company. Before merger the company has a separate goal. The goal it has satisfies their basic needs. By having a merger the company shifts its focus on one common goal.
Sony Ericsson and strategies to solve its problems
The joint venture did not help in solving the problems of the company. The company used different strategies to make sure that the venture will prove to be a good choice for the company and make sure that the venture will last for longer periods of time. The company’s strategies paved the way for showing how important the venture is to the companies involved. The company was not initially successful with the venture because it was not prepared with the different problems it might face. The strategies helped in improving the fate of the company and it changed the way the venture was operated.
Conclusion
Communication is a vital part of personal life and is also important in business, education, and any other situation where people encounter each other. Businesses are concerned with communication in several special ways. . Telecommunications enables people around the world to contact one another, to access information instantly, and to communicate from remote areas. Telecommunications usually involves a sender of information and one or more recipients linked by a technology. Sony and Ericsson opted to indulge in joint venture so that they can acquire complimentary with significant synergy effects. The companies believed that by engaging in joint venture both acquire benefits from the other. One alternative for the companies is merger. Through merging the companies can share 100% of its resources and the different culture and tradition of the companies is erased to bring up one new and improved culture.
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