Sony’s Paradox: Balancing Heritage, Innovation, and Transformation from 1946 to the Twenty-First Century

In this chapter, we trace the history of the Sony Group from its founding in 1946 to the twenty-first century, examining how the company has continually redefined its business structure. We critically refer to the Dynamic Capability Framework and explore how Sony has responded to pressures from the external environment in terms of strategic reinterpretation of the past and development of new organizational capabilities. The analysis reveals that the decisions made by leaders, internal organizational reforms, and reinterpretations of the founding philosophy in three stages—innovation based on the entrepreneurial spirit of the founding period, efforts to diversify in the 1980s and 1990s, and structural reforms after the “Sony Shock” of the 2000s—have led to the revival of Sony today. The most important point of this chapter is that it is difficult for third parties to grasp the “dynamic capabilities” of such a changing environment in real time. This case study argues that, as has been discussed in the Dynamic Capability Framework, the process of evolution is rooted in sensing, seizing, and transforming, and that the capabilities themselves can only be verified through historical retrospect. This perspective suggests to us that historical consciousness is important for companies to maintain long-term competitiveness through proactive change.