The Internal Problems That Caused Their Decline Media Essay

In 1888 the Eastman Kodak Company was founded by George Eastman under the motto you press the button, we do the remainder. Kodak lead the manner against their challengers through bring forthing new lines of merchandises which make the procedures of picture taking simpler, either through taking or developing the exposure. Kodak chiefly followed this motto through their scheme, up until the age of digital picture taking. Though Kodak developed the digital camera but feared that it would harm the photographic movie industry sector of their company, so they dropped it from traveling into production.

When Eastman Kodak Company was founded it was founded on the footing of four basic rules which are as follows, mass production at a low cost, holding international distribution, utilizing extended advertisement, and most significantly to concentrate on the client. Eastman decided to add some policies to these four basic rules though. These policies were to ease development and growing by go oning research and development of new merchandises. Besides to handle the companies employees reasonably, and in a dignified manner. Equally good as to reinvest the companies ‘ net incomes and utilize these investings to assist foster the company.

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The Eastman Kodak Company was able to hold a really high net income border due to their clients trueness to an American company, even when they were much higher priced than the rival ‘s goods, even when both companies ‘ merchandises were of equal quality. Kodak produced through mass production, and put out high quality goods at low-cost monetary values.

Five old ages after opening the company Eastman opened an office in London to get down the gaining control of a planetary market and today Kodak a fabrication installation in three of the six continents, North and South America, Europe, and Asia. Kodak besides is involved in multiple industries runing though, gesture image, wellness, papers imagination, printing and publication, and even infinite geographic expedition.

Summary of the Problem

Kodak ‘s failure is non because invention, or neglect to acknowledge the inclination to digital picture taking. In 1975, the electric applied scientist Steve Sasson invented the digital camera, and subsequently Kodak produced a professional-grade digital camera with a 1.3 Megapixels, which in 1991 was amazing for that clip. With this merchandise, which was made before the market transferred to digital picture taking Kodak had the chance to acquire a jump start on competition, but merely if the populace joined their digital impressions. Kodak had more than ten old ages to fix for the passage into the digital market and even some senior directors realized the alteration coming to the market due to the market portion lessening in 2001. Kodak chose to non concentrate a big sum of their clip and resources on fixing for the passage from movie to digital due to Kodak feeling that the photographic movie industry with its high net incomes and their big market portion would keep them over.

Kodak had a stiff hierarchy with the CEO overlooking the whole company while the laminitis, George Eastman, believed a leader in the group should set about the undertaking to be a great religious usher, and take absolute control over every item in order to do certain the best quality merchandises where produced. Though overtime, this direction ideal became more stiff. Kodak ‘s CEO Antonio M. Perez was so powerful that he could n’t let people disagree with him without harsh penalties. When Perez took over in 2005, Kodak had done small with any digital engineering, no 1 dared to travel against the Chief executive officer and his determination to non to do the displacement towards digital picture taking.

When Kodak considered the transmutation to digital, Kodak was missing their vision in how to take attention of and protect the hereafter occupations of their “ three coevalss of employees working in Kodak ” . Under ferocious force per unit area and competition from other challengers, Kodak had several layoffs. In the 1980s, Kodak used employees ‘ recent public presentation as the criterion to put off employees, which lead to the freshly hired employees to be let travel, nevertheless, the traditional endowment of the older coevalss was still at Kodak. Ironically the older workers on the older engineering and no new workers for the new epoch of digital picture taking.

Kodak ‘s scheme in passage was non to concentrate on a certain market. Kodak announced they were traveling to get down allowing spells of their traditional photographic movie concern in 2003. They decided to implement the 2nd strategic restructuring in December 2007 in order to ease the passage. However, Kodak was in excessively many markets, it put resources into the digital camera and its appendix, digital medical imagination engineering, but besides into the ink-jet printing and LCD show field, stretching their resources excessively thin. A diversified market is hard for Kodak to accurately specify the boundary of the competition particularly with Fuji, Sony, Hewlett-Packard, Canon, Epson and other big companies in the ferocious competition.

Measuring Kodak with the Congruence Model

The Congruence Framework Model is an organisational behaviour theoretical account that illustrates the congruity ( fit ) of each sector of an organisation with the complete organisation as a whole. The task/work processes, the people and the formal and informal organisations all have to be working cohesively together to let the organisation to change over aims into end products. In this subdivision, Kodak ‘s organisation will be evaluated utilizing the Congruence Model and the interruptions in the links of their ain Congruence Model will be highlighted.

The chief job that exists in Kodak is the deficiency of technological invention that was utilized in the company to help Kodak through the new coevals of movie picture taking and digital images. As stated before, Kodak created a digital camera all the manner back in 1991 so they had at least 10 old ages to fix for the digital age and to seek and better upon this theoretical account and make a superior digital camera. The job was that Kodak was excessively slow to implement these alterations which hindered their gross revenues. The persons at the top of the organisation chose non to switch to the digital age because of the immense net incomes and market portion that Kodak had gained in the traditional movie picture taking market.

There is a interruption in the nexus between the task/work processes and the formal organisation that must be identified first earlier any other rating can take topographic point. The top line directors at Kodak were excessively stiff in their thought and they refused to spread out their heads so they could use the invention that the company was in the procedure of bring forthing in 1991. The monolithic net incomes that Kodak received from the movie picture taking market made the directors “ stick to their guns ” and take excessively long to implement their digital camera scheme. While they were still seeking to milk the movie picture taking market, other companies were capitalising on the digital picture taking market. Since the directors did non pass on the passage from movie to digital picture taking to their workers, the work suffered and the interruption in the nexus occurred.

The following interruption that can be examined is between the informal organisation and the formal organisation. The civilization of Kodak is one of complete laterality and control of the movie industry and this is good warranted because of their past success. But the civilization of matchless success turned out to be Kodak ‘s biggest ruin. The informal organisation was unwilling to alter their thought procedure to a more modern position of the universe and set their yesteryear successes behind them, therefore impeding their growing and prosperity as an organisation. This failure can non be placed entirely on the informal organisation. The formal organisation ‘s deficiency of foresight to implement their digital engineerings to set to the displacement in the movie industry did non let their informal organisation to germinate into a modern digital movie company.

Now there will be an analysis of the stairss for Kodak to take so they can repair these interruptions in the links and heighten the net incomes of their organisation.

Recommended Course of Action

Eastman Kodak was founded off a formal organisational theoretical account that encouraged research, development, and invention and keeping a focal point on the client. This theoretical account was followed from the initiation of the company in 1888 until the coming of the digital camera in the 1970 ‘s. Through our analysis we have discovered that there were formal and informal determinations that lead to the death of Eastman Kodak in the digital camera epoch. There are clear illustrations of where broke the formal scheme of the organisation and informally decided to keep accent on the production of successful merchandise lines. This subdivision of paper will detail countries where Kodak failed to acknowledge it formal scheme and the recommended classs of action that should hold been approached through Kodak ‘s being.

The digital camera was born in 1975, and every bit stated before it took 16 old ages for the first camera to do it to the market as a Kodak merchandise. Kodak failed to derive important market portion on the digital camera because it felt that it traditional merchandises of movie and medical imagination were more moneymaking. Kodak ignored the formal policy of carry oning research and development on emerging engineering, which resulted in the market being dominated by other houses. In 2001, the market portion in digital picture taking was blue. This resulted in Kodak put to deathing many reconstituting enterprises from 2001 to 2007.

Kodak did non keep a focal point on their clients as evidenced by their belief that the market for movie picture taking would go on to be their hard currency cow. This was the primary ground that R & A ; D was non continued on the digital camera. The loss of focal point on the demand of the Kodak client resulted in the loss of trueness in the Kodak trade name.

Kodak should hold maintained focal point on the formal policy of the organisation which had ne’er changed in the company ‘s being. Kodak ‘s failure was success in a market that it had dominated for so many old ages. Kodak believed that its client base would stay loyal through the technological revolution of digital picture taking. This was false and resulted in the company losing focal point on their clients. R & A ; D should hold been conducted on the digital camera from its innovation, and debut of this merchandise to loyal clients should hold been instantly expanded with the purpose of transitioning from movie to digital picture taking.


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