Kodak fell behind Technology
There are many factors that resulted in Kodak to change its organizational architecture. First and foremost, the market pressure from Kodak’s competitors. With any market there will always be changes to consumer demand. Secondly, Kodak undervalued research and consumer demand for innovation. They held and led a constant market in film production for the longest time, and became shadowed by the idea of change. Technology boomed during that time of film monopolization. Communications became stronger and faster, and robotics technology made the mechanics of film easily pliable. Inevitably, Kodak needed a serious overhaul of their current organizational infrastructure. Kodak had initially made poor decisions to restructuring their methods to tier level management based on decision rights. The theory behind this change was to make decisions more responsive to the consumer wants and needs. Unfortunately, it was not enough to influence the overall organization based on an ever-changing market.
Kodak may have been able to be more competitive if they leaped onto their secondary organizational restructure of performance rewarding. The decisions that top-level executives were making didn’t have much of a weight to the corporate value. Decisions could have been valued greater if the overall earnings of the employees were based on the overall profitability. There should have been a continuous performance evaluation based on consumer desires, and whether or not the company was meeting them. This would have drove more interest in market research for consumer responsiveness. Kodak would have recognized the value consumers put on new innovation, and stretched their business environment to grow with the industry. This is the basic corporate cliché of a lackadaisical company who didn’t adapt very well to an ever-evolving market. Economic Darwinism truly fell to the wayside in Kodak’s infrastructure. Kodak didn’t grow with change or evolve with the market. Evolution carries a weight of improvement or downfall, and in this case, downfall resulted in a loss of elder species (Brickley, Smith & Zimmerman, 2009, p. 359)
Brickley, J., Smith, C., & Zimmerman, J. (2009). Managerial Economics & Organizational Architecture. (5th ed., p. 38). New York: McGraw-Hill Irwin.