Leadership and OrganizationalBUS520
Introduction to the Organization
Eastman Kodak was established in 1888 and has its headquarters in Rochester, New York. The company has been one of the best performing photography companies in the world. By the year 1976, Eastman Kodak accounted for approximately 85 percent of camera sales in America and 90% of film (The Economist, 2012). Until the 1990s, the company was rated as one of the global five valuable brands. Kodak transformed photography from an alchemy-like activity that was dominated by professionals into a highly popular, company that became an integral part many people’s lives (Bloomberg.com, 2017). However, the company’s recent declaration of bankruptcy provides a wakening call of the issues and turmoil that has been facing the company recently that have threatened the successful operation and existence of the company. Generally, Eastman Kodak provides hardware, software, consumables as well as various services to customers across the world. The company operates various segments including Micro 3D Printing and Packaging, Pint Systems, Consumer and Film, intellectual property solutions, software and solutions. The company also offers flexographic printing equipment and plates as well as the related consumables and service.
The current organizational issue that has affected the productivity at Eastman Kodak involves their organizational irresponsiveness the changes in technology. As task leader, my focus will be examining the reason for the slow process of adopting change at Eastman Kodak as well as various solutions that may be put in place to address the challenge. The analysis shall also focus systematic weaknesses within Eastman Kodak and the tech industry as a whole that have contributed to current issues affecting their operational environment.
Corporate Culture
Historically, Eastman Kodak was known as a company that built its success around a culture of modernization and change (Kotter, 2012). However, as the company grew and conquered markets, the management grew quite complacent believing that the company had grown to a level that it would be regarded as ‘too big to fail.’ The management of Kodak did not keep an eye on the digital revolution when the competitor companies such as Fuji were doing a better job with the roll-film business evidenced by their ability to acquire the largest market share (Economist.com, 2012). This culture of complacency affected the ability of the company to remain a competitive firm since the company was losing a market share to the competitors who had more innovative products and started to affect its productivity. With the spirit of complacency saturating upper management, lack of productivity tricked down to the employees. Those who dared to question the oncoming problems and offer solutions for the company problems were ignored and silenced by peers. The result was an absence of need for urgency to address the problems that were facing the company (Kotter, 2012).
The historical organizational culture of Eastman Kodak seems to have played a great role in the current issue facing the organization. We now see that Eastman Kodak failed to be innovative enough to compete in the changing technological operating environment (Munir, 2012). Kodak’s management thought that people will never part with the hard prints and did not see the digital transformation that was occurring in the industry (Anthony, 2016). For instance, Fuji Film was creating digital products that were adjacent to its film business, including the magnetic tape optics and branching into office automation, copiers and tape optics (Anthony, 2016). Meanwhile, Kodak failed to diversify; the company took little or no initiative to change. In the end, Kodak’s disinterest in digital cameras and other digital transformations that were occurring across the industry directly contributed to the failure of the company.
Areas of Weakness
The main areas of weaknesses that contributed to the problems facing Eastman Kodak include leadership, slow response to change and low motivation of the staff (Kotter, 2012). With the digital transformation, Eastman Kodak’s major strengths as a reputable and trusted brand became a weakness as the customers were migrating to the digital competitor brands, a factor which contributed to the failure of the company (Kotter, 2012). Kodak had the right resources and brand cachet to become among the leading providers of digital cameras, but the weaknesses of the leadership contributed to its slow decline.
Kodak’s resistance to change dealt the fatal blow to the growth of the company. When Eastman Kodak foresaw the end of its film profit, it tried to leverage its chemical and imaging technology into other businesses such as copiers, computer hardware, pharmaceuticals and medical diagnostics. However, it was too late since the customers had migrated to other more innovative brands already. In an attempt at drastic organization shift, the company hired two new CEOs from different industries to inject fresh ideas into the strategy. The executives were unable to get an understanding of the company and its operations; they failed to carry Kodak’s vision forward.
Poor morale of Kodak employees impeded the company’s responsiveness to the internal and external factors affecting their growth. Employee feedback relating to the current problems that were facing the company were ignored by the management (Kotter, 2012). By the time the company attempted to diversify its business and save itself from the turmoil it was facing, the workforce had shrunk from 70,000 to fewer than 20,000. Without manpower, the company struggled to keep up with the smaller much nimbler competitors that were taking a hit in the market. Poor employee morale affected their innovativeness and ability to develop creative solutions for the company from within.
Proposed Solutions
As the leader of the task force, I would propose a number of solutions to the problems facing Eastman Kodak. First, there is need to uphold innovation as an ongoing process for the organization that reflect the changes in the technological sector. Essentially, Eastman Kodak failed to innovate which led to their inability to keep in pace with the changing trends in the technological sector and also counter the increasing competition. For example, the company management should have recognized the growing transformations that were occurring in the industry with the introduction of digital media. Building and promoting a strong research and development team can help the company to come up with innovative solutions that could help it keep in pace with the changing trends. The other solution that could have helped Eastman Kodak to handle the issues it was facing is to create an organization culture that supports employee creativity and ideation. Kodak was operating in an industry which was prone to new changes and customer preferences. As a result, there is need to ensure that employees are motivated to come up with innovative ideas that could transform to innovative products and that the company is healthy enough to remain flexible and mobilized for modernization. The current situation in which the management ignored innovative solutions of the employees contributed to the failure of the company. Consequently, ensuring that the human resources have a loud enough voice to be heard and listed to could create a favorable organizational culture to spur the productivity of the company. Further, there is need for effective top down communication to enable the management provide the necessary insights to the staffs on innovation. Getting the employees to work in innovative groups can be facilitated by the management to ensure effective response to the current challenges facing the organization.
Executive Summary
In relation to the current scenario, the problems facing Eastman Kodak relates to its morale, slow innovative model, and irresponsiveness to change. The company’s management missed opportunities to innovative and keep in pace with the changing trends in the technology industry. The management also failed to instill the necessary organization culture that would spur innovation and enable the employees to be innovative. This contributed to low morale of the employees and consequently, the decline of the company. Despite all the signs showing the digital transformation that was occurring in the industry, the company’s management pursued investment in the print media market, and failed to capture opportunities to innovate and keep in pace with the competition. This led to the decline of the company as the customers migrated to the competitor firms.
In this regard, it is important that the management puts in place various measures to improve the operations and productivity of the company. The first solution is to create open and welcoming culture by encouraging creativity among the employees as well as support for their feedback and respect for their experience. Keeping in pace with the technological trends is important to ensure that the company remains competitive and offers products and services that reflect the changing customer preferences. Also, there is need to create a research and development team can help to develop innovative solutions that take into account the changes in the external environment. Ensuring that there is effective top down communication between the management and staffs of the company could help create a motivated workforce that can help to spur motivation.
References
“The Last Kodak Moment?.” The Economist. N.p., 2012. Web. 13 July 2017.
Anthony, S. (2016). Kodak’s Downfall Wasn’t About Technology
Eastman Kodak Company: Private Company Information – Bloomberg.” Bloomberg.com. N.p., 2017. Web. 11 July 2017.
Economist.com. N.p., 2012. How Fujifilm survived. Retrieved at: https://www.economist.com/blogs/schumpeter/2012/01/how-fujifilm-survived
Kotter, J. (2012). Barriers to Change: The Real Reason Behind the Kodak Downfall. Retrieved at: https://www.forbes.com/sites/johnkotter/2012/05/02/barriers-to-change-the-real-reason-behind-the-kodak-downfall/#79fe172d69efhttps://www.forbes.com/sites/johnkotter/2012/05/02/barriers-to-change-the-real-reason-behind-the-kodak-downfall/#79fe172d69ef
Munir, K. (2012). The Demise of Kodak: Five Reasons. https://blogs.wsj.com/source/2012/02/26/the-demise-of-kodak-five-reasons/