Different River

”You can never step in the same river twice.” –Heraclitus

March 7, 2005

Sony Appoints British-American CEO

Filed under: — Different River @ 6:14 pm

I think this is going to turn out to be big news in the “history of business” category.

Sony Corporation has appointed Howard Stringer as its new Chairman and CEO
, replacing Nobuyuki Idei, effective June 22. Mr. Stringer was born in Wales, U.K., and because naturalized U.S. citizen in 1985. In addition to heading the entire company, he will also retain his current position as corporate executive officer, vice chairman and COO of the Sony Entertainment business group, and head of Sony Corporation of America.

Anyone about my age (mid-30s [gosh!]) or older will remember a time in the 1970s and 1980s when it was fashionable for Americans to think that the time of American economic dominance had ended, and the economic leadership of America’s big companies would give way to Japan’s. I remember thinking that myself (and wrote a report or two to that effect in sixth grade when assigned to do a project on “a country”).

But that thinking turned out to be not only wrong, but flagrantly wrong. Japan’s economy went into free fall in 1985, into full-on recession by 1990, and has not really recovered since. In fact, the recession may only be ending now, in 2005. The Nikkei index, the main index of the Japanese stock market, lost 80% of its value between 1989 and 2003. It has gained somewhat, but is still only at 30% of its peak value at the end of 1989. (For comparison, the Ameican S&P 500 index is at about 600% of its end-of-1989 value.)

(For some theories as to what went wrong, see this article by Benjamin Powell.)

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