Nobuyuki Idei

In April 2003, Sony's sharp downward revision of profit forecasts triggered the "Sony Shock": its shares plunged and the crisis spread to Japanese technology stocks. Idei subsequently launched Transformation 60, a restructuring programme separate from the 1999 plan, providing for approximately 20,000 job reductions over three years, including 7,000 in Japan.

Legal status — source text

No legal proceedings

Attribution

Direct CEO strategic accountability

When Apple launched the iPod and iTunes, Sony possessed a dominant portable audio brand, music labels and the technology needed to respond. However, aggressive content protection, proprietary formats and rivalries between its hardware and music businesses delayed an integrated offering. The iPod rapidly displaced the Walkman as the global benchmark for digital music players.

Legal status — source text

No legal proceedings

Attribution

Direct strategic governance; execution shared across Sony divisions

Ken Kutaragi, the father of PlayStation, was widely considered a possible successor to Sony's leadership. After the Sony Shock, his relationship with Idei deteriorated, and Kutaragi was removed from the board in 2005. Idei ultimately chose Howard Stringer, head of the US and entertainment businesses, as Sony's first foreign CEO.

Legal status — source text

No legal proceedings

Attribution

Direct CEO succession and governance decision

In 2000–2001, Sony Pictures advertisements quoted a critic named David Manning of the Ridgefield Press praising several films. The critic did not exist. Two marketing executives were suspended, and cinema-goers brought a class action; a $1.5 million settlement was eventually approved in 2005.

State of the evidence

Fake critic documented; class action settled for $1.5 million

Legal status — source text

Civil class-action settlement; Sony admitted no liability

Attribution

Corporate governance during Idei's tenure; no evidence he knew of the fabrication

An investigation by New York Attorney General Eliot Spitzer uncovered radio promotion practices at Sony BMG involving gifts and benefits intended to secure airplay for artists. Documents showed activity dating back to at least 2002. In July 2005, Sony BMG paid $10 million and acknowledged that some employees had engaged in practices that were "wrong and improper".

State of the evidence

Documents and New York Attorney General investigation; $10 million settlement

Legal status — source text

Regulatory settlement with the company; no personal charges against Idei

Attribution

Sony BMG corporate conduct partly during Idei's tenure; personal knowledge not established

Six West Retail Acquisition sued Sony and several executives for breach of contract, alleged monopoly practices, block booking and an anti-competitive merger involving New York cinemas. In 2001, a judge found that Idei possessed unique knowledge of certain distribution policies and the Loews–Cineplex merger and ordered his deposition in Japan.

State of the evidence

Federal antitrust allegations, compulsory CEO deposition and subsequent summary judgment for defendants

Legal status — source text

All Six West claims dismissed on summary judgment in 2004; appeal continued only against corporate defendants

Under Idei, Sony announced a global restructuring reducing its workforce of approximately 170,000 by 10%, or 17,000 positions, and cutting production sites from 70 to 55. The plan, particularly significant in Japan where lifetime employment remained a strong norm, was intended to accompany the shift towards digital and networked businesses.

Legal status — source text

No legal proceedings

Attribution

Direct strategic governance as Sony president

Idei introduced Economic Value Added (EVA) as a central Sony performance indicator and linked it to divisional remuneration. Former executives and retrospective analyses suggested that the system could encourage units to restrict investment to improve EVA, contributing, in particular, to Sony's caution in LCD displays and stagnation in innovation.

Legal status — source text

No legal proceedings

A few months after becoming Sony president, Idei forced the departure of Michael Schulhof, the powerful head of Sony Corporation of America and protégé of Morita and Ohga. Contemporary accounts describe a struggle over the autonomy of US operations, control of Hollywood and differences in management style.

Legal status — source text

No legal proceedings

Attribution

Direct CEO governance decision