CASE STUDY: WHAT WENT WRONG WITH EASTMAN KODAK?

Published: 2019-10-31 03:40:32
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When complexity increases, the concept of managing change in an organization becomes increasingly difficult. Despite the fact that information can be easily availed in an organization the ability to protect the future outcomes has moved from an environment of calculated manageable risks to a degree of uncertainty. Risks that are manageable imply that there is enough knowledge to quantify the probabilities of certain outcomes. Change is something that cannot be inevitable as far as an organizations life is concerned. In our business world today most organizations are facing dynamic changes in the business environment. Organizations that adapt or cope up with the changes always tend to thrive and flourish while those who fail to cope up tend to collapse. Thus, in our todays society the main question that we have to ask ourselves is how managers in different organizations manage to cope up with the inevitable changes that confront them.

In the past few decades, quite a number of theories and concepts have been enhanced to face the obstacles of complex societies as well as fundamentally improving organizational structures. During the past decades different industries from agriculture to telecommunication have felt the need to progressively introduce new concepts in order to meet the growing threats posed by competitors in the market. The concept of change and innovation differs from creativity in that the two prior concepts are associated with the production of new ideas. On the contrary, the two concepts refers to taking new ideas and implementing them in the market. This paper provides an analytical review outlining the main themes and issues affecting Eastman Kodak and the implications of these issues in managing organizational change and innovation. In the next part of the paper I am going to discuss the issues that led to the demise of Kodak despite the fact that the company went one on one with managing change and innovation over the past few decades.

Background

We all know that the failure of Kodak is the story of a firm that failed to manage and correctly implement change in the organization. Its values also slipped down drastically. When companies go broke, we customers rarely pay much attention. Kodak was an old company and most people in America knew that Kodak was a synonymous company with taking pictures. However with the exception of a drastic turn of events, Eastman Kodak may be falling bankrupt. For at least more than 120 years the Kodak Company has been photographic centered on the manufacture of products that are film related. From countless birthdays to films and other related memories have been preserved on Kodak film. Kodak has recorded billions of films for commercial purposes as well as aerial films for mapping purposes. All these activities were made possible by complex chemicals in film making. But everything seems to be changing. Everything changed in the history of Kodak on September 2003, recognizing the fact that the digital world is replacing the traditional world. Kodak announced that even though it will continue to manufacture films and other film related products in the future, the company intends to focus its resources on producing products that are digital.

When word spread in the news headlines that Kodak was running bankrupt mostly people looked at the companys financial data in the last five years or at times the last ten years. In addition to that, the Kodak problem was mainly caused because the company did not move into the digital world well and first enough to keep up with the changes, research survey show that there were people in the organization who were very much aware of the problem but did not say anything about it. The organization did not act in the actual time it should have this is technically the main reason why the organization dropped in its rank as well as financially. Kodak faced a lot of threats from technological discontinuities, the introduction of new technologies normally has ferocious competitors and low margins that cannibalizes the high margins. Kodak did not take any actions to act against the challenges.

Most people seems to think that it was poor decision making that made Kodak to be the place it is today. But what they should ask themselves is why Kodak made that poor strategic decision in the first place any yet they had had a great CEO with all sorts of good ideas. Although the organization was overflowed with satisfaction it was still failing to keep up with management even before digital revolution was introduced. With the satisfaction and no one at the top to try and solve the problem or make any progress, the company failed. Kodak failed to change their perception of ideas they had on cameras. Their drive for innovation was managed to the point of creating digital cameras and so they failed to see the digital camera on the perspective of the digital technology which brought Kodak down the road of bankruptcy back in 2012. All these was because they continuously viewed their business in the lights of the cameras rather than on a technological perspective. According to a certain blog, Kodak missed the boat that it helped build from the start.

Apply research skills to examine and analyze the literature appropriate to the issues from the perspective of change management

From the change management perspective, quite a number of factors played a role in the tragic decline of Kodak. One of the factors that led to the demise of the organization was that, the company concentrated so much on one side of its management that it failed to take time initiatives towards adopting digital technology in the segment of digital technology. Another important factor that led to the demise was the companys failure to realize that there was need to monitor the changes that were occurring with the competitive companies and then adapting the changes.

First

The biggest blunder made strategically by Kodak was that it failed to get ahead of the changing times. While the organizations competitors were innovating their strategies as well as coming up with new products in the market, Kodak remained happily stuck with its old products. The company had a poor strategy in its approach on management, for instance finding solutions to its problems was an issue. At the organizations infancy stage, Kodak adopted a rational thinking perspective during the companys early stage but as change and innovation came in the company failed to see the need for change from silver-halide film technology to the digital technology. The companys failure to see change was a big blunder on its management side which could have been avoided if the management used a Generative thinking perspective to solve their problems rather than a rational thinking perspective.

Secondly

The organization lacked initiative to adapt to changes in the market which was another reason for the organizations failure, they failed to realize the threats posed by innovation on the competitive markets. As early as 1981 the introduction of a filmless digital camera known as Mavica by Sony Corporation should have acted as a signal of warning for the Kodak Company but Kodaks management failed to see the upcoming signs of disaster. The management could have adopted to using the continuous renewal perspective as early as their first signal. In the long run the strategy could have helped Kodak maintain its crown as the leader in the market of camera. However, several years later the management is still in a dilemma on whether it should adopt the discontinuous renewal perspective or not.

Thirdly

The company faced a dilemma of choosing between resource based view and market based view. During the companys early stages, Kodak used films, papers, chemicals and processing of photos as a competitive advantage to its competitors, however, following the introduction of new digital technology Kodak could no longer benefit from its earlier sources of competitive advantage. A major challenge faced by Kodak is that the company no longer holds any competitive advantage to its rival competitors. When it comes to possessing photography of the 21st generation such as digitized technology, storage, transmission and projection of solutions Kodak is still lagging behind. The beginning of a new era of digital technology as seriously put the Kodak Company in a dilemma and in order to compete with its competitors the company has to seriously move in to the digital world in an area where the organization has no experience in. Also the organization has to compete with other organizations such as Mitsubishi, Sony as well as Canon who have a very wide experience in the digital world.

Fourthly

Another problem is that the Kodak Company is facing a dilemma situation of choosing between competition and cooperation in the management strategy. In order to address the challenge of competing with organizations that have superior technology Kodak launched an aggressive campaign that would enable them acquire organizations and advanced technologies so as to address the needs of the ever changing market. Kodak Company embarked on a journey of acquiring a strategic partnerships and making missions that resulted in cash flows that were depressed as well as pissing of the investment community. However, the companys decision to continuously pursue the embedded Organization perspective was literary seen as an attempt that was desperate in building an areas to obtain resources in the photograph industry, an area where they hardly get any competition with its competitors technologically.

The organization is also facing trouble between choosing the concept of globalization and localization. The old and outdated technique in sales based on traditional analogue technology has proved to be a successful method of improving the companys sales in the eastern markets such as the Chinese markets but in the western markets competition is so high such that competitive organizations have developed their competencies much more due to the advancements in technology. Kodak needs to pull up their socks if it quickly needs to put up the core of technology in line with its rivals.

Strategies developed to solve the problem as well as implications of the analysis from the perspective of change management.

Kodak only depended on rational thinking perspective in sales management and production of films with allowed its competitors to slowly grab its market shares in the camera industry. In an attempt to solve the problems Kodak could have easily used generative thinking perspective to tackle its problems. It would have adapted this method of approach to meet its emerging challenges in the environment.

In the 1980s the organizational management should have started to slowly transform itself from traditional film cameras to digital filmless cameras, but the company did not take any step forward towards digitizing themselves. Several years later, Kodak is now left with no choice but to undergo a drastic revolutionary changes towards the concept of adopting new change. However, the management must be careful in making any kinds of mistake at this point for the future sake of the firm.

For Kodak to reach up to the changing scenarios in the business a new strategies was developed in 2003 through which the companys management aimed at paying complete attention on the segments of displays and inkjet in the market. The changes in the organizations strategies will come with changes in the needs of the market targeted and the customers will have to move from film cameras to digital cameras. The main focus of different organizations in the photography business is to basically capture the attention of customers who would prefer getting hard copies of the digital photos by offering...

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CASE STUDY: WHAT WENT WRONG WITH EASTMAN KODAK?. (2019, Oct 31). Retrieved from https://speedypaper.com/essays/what-went-wrong-with-eastman-kodak

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