Sony 2003 Annual Report Download - page 19

Sony Corporation Annual Report 2003 17
New Operational Organization
A sound operating organization is essential to enacting
the reforms w e have planned.
On April 1, 2003, we formed a new framew ork that
includes eight business units. Within the framework are
four netw ork companies: Home Netw ork Company, IT
and Mobile Solutions Network Company, Broadband
Network Company and M icro Systems Network
Company. Also included are the Game Business Group,
Entertainment Business Group and Personal Solutions
Business Group. The eighth unit is SEMC. Each of these
business units has been given even more autonomy to
operate in a self-reliant manner to achieve mid- to long-
term goals. This autonomy, along with aggressive and
effective investment by each business unit, is expected
to contribute to profitability.
In conjunction with this delegation of authority, we
named chief financial officers for each of the network
companies, while retaining a chief financial officer for the
entire group. This will better enable the comprehensive
oversight of the operations of each network company.
As they conduct largely autonomous and self-reliant
operations, the network companies will w ork even more
closely w ith the Global Hub, our group headquarters.
At the same time, w e have established an organization
in w hich the group’s senior management can quickly
monitor the current status of operations.
To strengthen regional strategies for East Asia, the
Americas and Europe, a representative has been named
for each of these regions. In addition, in June 2003, we
plan to adopt the “ Company with Committees” system,
a new option under the Japanese Commercial Code, for
the purpose of reforming the group’s management
structure in order to enhance corporate governance (for
more information see page 74).
Balance Sheet Management
Finally, w e believe that building a strong financial posi-
tion is also essential to transforming Sony into a 21st
Century enterprise. This requires precise management of
our balance sheet, not just a focus on profit performance.
The Sony Group has always managed and invested its
assets in an efficient and appropriate manner, but our
consolidated assets have been climbing, with much of
this growth coming from our Financial Services segment.
When the Financial Services segment is excluded from
the balance sheet, the remaining figures show that assets
have decreased, and that the decline is mainly attribut-
able to a steady reduction in inventories in the Electronics
segment. On the other hand, due to the asset-oriented
nature of the Financial Services segment, grow th in
assets tends to correspond to success. This is fundamen-
tally different from the nature of the Electronics segment.
Consequently, Sony will increase measures to manage
its balance sheet by creating separate balance sheets for
the Financial Services segment and for all other seg-
ments, thus making apparent the value of these tw o
types of businesses. In the Financial Services segment, the
public service nature of operations is high and w e must
fulfill our obligations to the customers whose assets we
hold. The Sony Group will seek the best course of action
to take concerning these businesses from the vantage
point of the entire Group, including possible alliances
with other companies or public offerings of equity.
Through these strategies and measures, Sony plans to
further enhance its overall competitive position as we
approach our 60th anniversary in 2006. Our aim is to
build a framew ork capable of achieving a consolidated
operating income margin of 10% in the fiscal year end-
ing M arch 31, 2007 (excluding the Financial Services
segment), firmly positioning Sony as a global media and
technology company with the world’s strongest con-
sumer brand.
(May 2003)