Sony Chairman and CEO Howard StringerKen Kutaragi: the thorn in Sony CEO Howard Stringer's side In the past year, Sony as a company has been defined greatly by two events: the delayed launch of its PlayStation 3 gaming console and the battery recall that affected millions of customers. According to an interview with the Wall Street Journal, a lot of the negativity surrounding both is the result of internal strife in the company and a cultural disconnect between Sony CEO Howard Stringer and his Japanese executive team. Much of the blame for the delay of the PS3 last year has been placed on Ken Kutaragi. Kutaragi, widely regarded as the father of the PlayStation repeatedly went over budget with PS3 development, yet failed to keep Stringer abreast of the problems. Kutaragi blindsided Stringer again in a board room meeting with the announcement that the Japanese-market 20GB PS3 would have its price cut by 20%. “It wasn't financially one of my best moments," said Stringer. "The budget implications were self-evident. [But] I agreed because I wanted the launch to be successful." Kutaragi also did his best to resist communication with key executives in other Sony divisions. Kutaragi famously held a Las Vegas launch party for the PlayStation Portable (PSP), yet failed to invite the heads of Sony electronics division -- the division that actually provides the components to make the PSP function. After the missteps with the PS3, Kutaragi was "promoted out" of his position as President of Sony Computer Entertainment and was named chairman and CEO of SCEI. Stringer goes on to say that the reluctance of his Japanese executive team to report problems to him was even more prevalent with the massive battery recall, which sparked in August of 2006. Instead of hearing the news directly from Sony employees, Stringer was first contacted about the problems by Michael Dell, founder of Dell Computer. Stringer then, however, made a critical mistake by siding with his Japanese executive team and decided to remain quiet on the matter. The goal was to limit the vastness of the problem to Sony's components division. The reality of the matter was that the lack of response to the recall led to customers and the press to attack Sony as a whole which did nothing for the company's reputation. Stringer likened the steady trickle of recall announcement from various notebook manufacturers to "a kind of Chinese water torture." Some of the blame can be placed on Stringer though. He decided not to have a permanent residence in Japan and instead lives in a hotel when in the country. He does, however, own homes in England and New York. "Mr. Stringer has no background and he's not in Japan managing the day-to-day," said Fitch Ratings analyst Tatsuya Mizuno. "Sony's DNA is in electronics...so the top management needs to understand what's going on there." Stringer acknowledges that even a token residence in Japan would go a long way in promoting a synergy within his company. "[I should have] faked it better -- I mean that seriously," said Stringer. "I should've put the flag up the flagpole and said here's my residence in downtown Tokyo -- I'm here! -- even if it's less practical than living where I live, and much less comfortable and friendly." http://www.dailytech.com/article.aspx?newsid=6342