Panasonic vs Sony Case Study Solution

1 – INTRODUCTION 

1.1 Defined Topic of Study

Corporate Social Responsibility (CSR) as defined by the World Business Council is, “the continuing commitment by businesses to behave ethically and to contribute to economic development while improving the quality of life of the workforce and their families, as well as of the local community and society at large” (“Corporate Social Responsibility”, 2003, para. 1).  CSR plays a critical role in a company’s business polices as related to environmental practices.  Corporate environmental responsibility outlines a company’s strategy for reducing its environmental footprint through energy savings, recycling initiatives, decreased CO₂ emissions, and sustainability.  Panama Panasonic and Sony Corporation of America, include corporate responsibility manifestos in annual review publications as well as part of their online web content, with varying degrees of environmental initiatives relative to each.

1.4 Overview of Panama Business Environment

Panama’s economy has seen rapid growth in recent years, with the last five years averaging 8.75% yearly increases in GDP (IMF, 2011).  The current labor force boasts 1.509 million with an unemployment rate of 4.4% (see Graph 6).  The majority of labor is concentrated in the service sector with 64.4% of the population working in services, largely provided by employment at the Panama Canal (The World Factbook, 2009).  Fueling growth is the development of Panama’s infrastructure as an emerging country, specifically a project aimed at widening the Panama Canal which is expected to be completed in 2015.  Despite economic growth Panama still suffers from massive income inequalities among its population, with 30% of the country living in poverty.  In addition to income distribution, concerns about unstable politics also increases potential risks in the business environment.

Panama’s logistics industry is its main source of GDP.  The canal serves as a worldwide hub for trading and the presence of the Colon Free Zone mark Panama as a strategic business center. Recently the U.S. signed a ratified free trade agreement with Panama in October 2011, increasing U.S. import and export market share in Panama and reinforcing the importance of Panama as a critical trading partner for the United States.  The widening of the canal is bringing additional business and increased opportunity to the area and is expected to lead to further economic growth and development in future years (Leach, 2011).

1.6 Report Focus

The focus of this report is a case study of Panasonic vs. Sony corporate social responsibility in environmental practices. More specifically, this report compares environmental initiatives, regulations and impact of corporate social responsibility strategies for Sony Corporation of America and Panasonic Panama.

2 – INFORMATION AND DATA COLLECTION APPROACH

2.1 Data Collection

Data collection for this study was obtained through extensive internet research. A face-to-face company interview in Panama was scheduled but canceled last minute and attempts to collect information via email were unsuccessful. Internet sources were leveraged to obtain needed information on environmental polices relative to each company and within each country.

2.2 Internet Search

Internet research was conducted using Google and USM library search engines. Databases including, Business Source Complete, LexisNexis Academic, Encyclopedia Britannica, International Monetary Fund, The World Bank and Harvard Business Review were employed to uncover fundamental information regarding U.S. and Panama environmental regulations, local sustainability awareness, and direct targets to measure environmental goals for each company. Sources used include peer reviewed academic papers, government databases, industry journal articles, corporate websites and national news archives. Databases and corresponding web addresses for acquired information are detailed in Table 1. Key words used throughout the information search are included in the supplementary table below. Table 1: Databases

2.3 Panama Interview Main Goal

A secondary data collection was intended through direct interviews with Panama business executives at Panasonic headquarters. The main objective of the interview was to gain an understanding of what resources Panasonic employs in maintaining environmental compliance and what additional steps Panasonic is taking to reduce its environmental footprint locally. However, due to extenuating circumstances and scheduling conflicts, the interview was canceled last minute and case study findings were based on internet research alone.

2.4 Interview Instrument

After 40 years in operation, Panasonic Latin America became actively involved in environmental activities with its 2008 agreement with ANCON, supporting educational and environmental regional projects (https://www.panasonic.com.pa/about/corporate/). Recent regulations and
global initiatives mandated quick implementation of sustainability practices and ongoing efforts of corporate social responsibility in the public eye. Questions regarding internal processes used to roll-out the new initiatives, and how Panasonic monitored implementation and plans to support efforts going forward were meant to be addressed during an on-site meeting. Included below is a copy of the interview template prepared for the meeting.

Table 3: Panasonic Questionnaire
What were/are the main challenges faced in ensuring environmental compliance locally?
What internal instruments are used to monitor environmental impact?
Does Panasonic offer a “take back” consumer recycling program locally?
What are specific steps Panasonic is taking during the next five years to reduce its environmental footprint?
What do you feel will be the hardest challenge in maintaining Panama’s ecosystem despite rapid business development?
Are any employee incentives offered to encourage environmental activism locally?
What do you foresee as the biggest environmental hurtle to overcome in upcoming years?

2.5 Panasonic Interviewee Profile

Unfortunately, the scheduled meeting with executive Mariana Samudio was canceled due to schedule conflictions so Panasonic company information obtained for this report was gathered exclusively from internet research.

3 – Panasonic vs Sony Case Study Solution

3.1 Panasonic Panama Headquarters Location

Situated just east of the Panama Canal on the South side of Panama, Panasonic Panama headquarters are located at Panasonic,Via Simon Bolivar, Ave Transistmica, Contigua Al, Panama City, Panama. Figure 3 below, depicts the Panasonic location within the country.

3.2 Overview and Characteristics of Panasonic Panama

Originating as “National Panasonic” in 1970 in the Republic of Panama, Panasonic’s first sales were recorded under the brand name “National,” and served local markets in Latin America. Early interest in Panama led this Japanese-based, multi-national corporation, to target goals in becoming the number one consumer electronics brand for Latin America. An aggressive market expansion was undertaken and soon Panasonic’s operating area expanded to include current markets of, Colombia, Ecuador, Uruguay, Paraguay, the Caribbean and other regions of Central America and Brazil (https://www.panasonic.com.pa/about/corporate/history/). Panasonic Panama serves as the central headquarters hub for all Latin American sales. North and South American sales for Panasonic represent 12% of the company worldwide total or $9.4 billion (966.5 billion yen at exchange rate 1USD:102.44JPY), with global sales of $76.9 billion (7,846 billion yen) in fiscal year ended March 31st, 2012 (Panasonic Corporation Annual Report, 2012). Products currently offered in Panama range from audio and video electronic equipment to lighting, communications and appliances. Sales and service focus on both direct to consumer sales as well as business to business relationships.

3.3 Panasonic Panama Environmental Activities

Panasonic Panama takes an active role in supporting local ecosystem preservation and encouraging community activism. In addition to a global company-wide program, “Eco Ideas,” Panasonic also participates in regional events through volunteerism, sponsorship and fundraising. Recent contributions include “Panasonic Cares – Month of the Oceans,” an employee volunteer beach clean-up event, which resulted in the collection of 3.134 pounds of plastic waste gathered and recycled (https://www.panasonic.com.pa/about/eco/). In addition, local contributions to promote environmental awareness include, the establishment of “El Caucho,” an outdoor recreation and 390 meter trail, located in the middle of the city, construction of a visual education center dedicated to improving environmental awareness in the community, and ongoing ecosystem education materials for children which include an international contest to compete on the basis of eco conservation ideas. Business initiatives also seek direct impact through actively planting trees to maintain Panama’s ecology. During 2008, Panasonic’s “Project Relay Eco Ideas” resulted in over 1,000 trees planted along the Channel.

Continued investment in research and development for eco-friendly advanced products is a main focus for Panasonic initiatives, while promoting increased sustainability for businesses and consumers drives much of Panasonic’s local activism. A 2009 convention headed by Panasonic, featured newly developed organic products available for local review, testing and educational consumption. Panasonic performed “ecotours” to interested consumers and businesses describing everyday actions to take in reducing one’s environmental footprint as well as demonstrations and explanations of Panasonic products currently available to conserve resources and reduce waste for corporations and consumers

Panasonic Panama uses a two-prong approach, both consumer-focused and business driven, consistent with their global green plan concept of “Green Life” innovation and “Green Business” innovation (Panasonic Sustainability Report, 2012). Active participation locally, ensures sustainability remains at the forefront of environmental initiatives, and investment in R&D allows further opportunity for Panasonic to tackle global eco challenges and promote green life not only operationally but throughout the life of the product and through consumer and business use, the below figure outlines Panasonic’s Green Plan strategy for 2018.
*Panasonic Sustainability Report (2012)

3.4 Sony Corporation Distribution Center Location

Sony Corporation of America’s manufacturing and distribution center is located on the west side of the United States in San Diego, California, just off major interstate I-15 and twenty miles

3.5 Overview and Characteristics of Sony Corporation.

Sony is an international Japanese-based consumer and business electronics company, publically owned and traded on the New York Stock Exchange. Known for early sales success of transistor radios, Sony products now include a breadth of assortment from CD’s, computers, smartphones, and TV’s to professional broadcast and video equipment (www.sony.net). Several years of successfully exporting to the U.S. led Sony to establish offices in New York in 1960 and increasing demand prompted construction of a California production facility in 1970. The popularity of Sony’s color TV launched late in the sixties, coupled with growing U.S. market share called for faster turnaround and streamlined production of products, leading to the current San Diego production facility and distribution center which boasts 394,000 square feet of building space, over 1 million square feet of industrial space and 2,500 employees (Brass, 1996). U.S. Sony sales totaled $10.436 billion (1,064 billion yen at rate of 1USD:102.44JPY) for fiscal year 2012 and represent 16% of company worldwide sales reported at $66.658 billion (6,800 billion yen) for fiscal year ended March 31st, 2012 (Sony Annual Report, 2012). Sony sales are comprised of 50% consumer electronics, 30% professional products and 20% component parts to original equipment manufacturers (www.sony.net).

3.6 Sony Corporation Environmental Activities.

In addition to Sony’s “Road to Zero” environmental corporate strategy, Sony also contributes to local communities through its Global Environmental Management System, employee volunteerism and community activism. Under the Global Environmental Management System, Sony operates 31 business divisions and sites in North America that are ISO (International Organization for Standardization) certified and third party inspected on a yearly basis to ensure recycling and environmental management standards are upheld at Sony manufacturing and nonmanufacturing sites. Locally in California, Sony has partnered with the University of California Santa Barbara, to provide funding, technology and equipment to students researching environmental projects and to benefit educational enrichment of the local community on sustainability issues. Funding to local non-profit events such as “I Love a Clean San Diego,” “Creek to Bay Cleanup,” “Kid’s Ocean Day,” and “California Coastal Cleanup Day,” support community activism and encourage company volunteerism. In 2012, a total of 359,000 pounds of waste were collected from volunteers with 93,000 pounds recycled (www.sony.net). One of Sony’s largest environmental programs is a nationwide “take-back recycling program.” Through the “take-back” program, consumers are able to return any Sony product for recycling at no charge at drop-off locations across the country (www.sony.net).

Sony also sponsors a company-wide Global Volunteer Day, encouraging all employees to participate in local volunteer activities. Efforts in 2012 included transforming a neglected schoolyard park in Brooklyn into an interactive outdoor classroom, where Sony volunteers conducted sustainability workshops for neighborhood kids (www.sony.net). In Los Angeles, tree planting and neighborhood cleanups are an ongoing commitment for Sony employees.

A history of environmental issues in California has led to eco-conscious residents and consumers, encouraging “green” products and sustainability initiatives for businesses. To this effect, Sony’s local activities focus on rebuilding and restoring through sponsorship, fundraising and volunteer efforts, as well as an internal focus on reducing supply chain environmental impact and increasing energy efficiency standards through initiatives and investment.

4 – RESULTS AND RESULTS IMPACT

4.1 Comparison of Panasonic Panama and Sony Corporation.

Aspects regarding environmental initiatives, targeted environmental goals, community activism and local impact of corporate processes for Panasonic Panama and Sony Corporation of America were compared to illustrate similarities and differences between the companies and the varying degrees of regulation employed by each country. Specific comparisons were drawn between the company’s operations, product development, and energy usage as well as detailed reviews of each company’s corporate environmental strategy plan and future targets.

4.2 Similarities between Panasonic Panama and Sony Corporation.

Recognizing the importance of contributing to a reduced environmental footprint, Panasonic Panama and Sony Corporation of America are addressing greenhouse gas emissions, control of waste disposal, and increased energy efficiency as part of corporate environmental strategy as well as supporting local biodiversity through volunteer efforts and community activism. In an effort to promote eco-values, both companies have partnered with local organizations to monitor the impact of company development plans, operational processes and supply chain improvements across the region. Panama’s Panasonic works closely with the National Association of Nature to support local development of educational environmental facilities along with preservation and reforestation of Panama’s natural plant and marine life communities. In America, a close collaboration between Sony Corporation and the U.S. Environmental Protection
Agency proves advantageous for ensuring increased green energy usage. Through the EPA’s Green Power Partnership, Sony has committed to purchase 44% of energy through renewable and green energy sources, leading to reduced CO2 emissions and lower overall carbon footprint (www.sony.net).

In-house allocation of resources focuses on the development of energy efficient products as a priority for both companies. Through innovation and design initiatives, Panasonic Panama and Sony Corporation claim “Energy Star” ratings on all consumer goods products (Guide to Greener Electronics 18, 2012). Energy Star standards signify goods using 20%-30% less energy than required by federal standards (Tugend, 2008). In addition, regulation of paper purchase is enforced for both companies to ensure only reputable distributors, not involved in illegal logging or deforestation activities, are used for paper purchases. Regarding the control of chemical substances, both companies cite this as an initiative; however neither company provides figures relative to usage and disposal or specifics on how this is being addressed or controlled internally. According to Greenpeace Magazine, this is the biggest gap in each company’s execution of corporate environmental strategy plans (Guide to Greener Electronics 18, 2012).

Commitment locally is evident through company volunteer efforts, sponsorship, and donation to regional environmental groups in support of environmental facilities. Community activism in Panama is focused on educating the local population about environmental concerns, eco-friendly products, and contributions to protect the local ecosystem. At Sony, corporate social responsibility focuses on the creation of educational facilities, while supporting the creation of green parks and reforestation efforts. Emphasis on community activities in each country is tailored to regional needs with both companies locally involved in the development of environmental programs. A summary of similarities between the companies is provided below in

The similarities of these company initiatives are important because they illustrate, despite varying degrees of expectations by local communities, and differing levels of operational regulation in each country, company CSR policies often drive regional environmental awareness and impact.

Recommendations.

Based on research conducted, Sony Corporation is very likely to have long-term success, and overall a great investment. After going through a downturn, Sony handed of the reins to a new leader and now have a positive outlook. Market demand is increasing, while Sony is investing more and more money into research and development, and ultimately has Creativeness/Innovation as a key to their overall image. As you can see in the chart under the ‘Business Divisions’ tab, the video game market is the most profitable market among electronics, and the demand is continuously increasing. As a plus, the nature of the market and game sales guarantees long-term, frequent customers. Video games are a key business division right now Sony Corporation’s success will also come from their very strong concentration on Corporate Social Responsibility. Sony will prevail with these foundations because it will help them to grow and change with the diversification of the markets and customer’s lifestyles, innovation of products and services, and changing concerns of stakeholders. Sony believes this will enhance corporate value and benefit society.

The Sony Group’s Seven Focus Areas on Corporate Social Responsibility can be found in the chart below.

• Sony is a larger company as compare to Panasonic.
• Its features are ,brand technology  and marketing mix new as compare to Panasonic
• Panasonic need to improve its marketing tools.