There is no need to change basic corporate culture of innovation at 3M. 3M already has impressive internal strengths and in order to avoid further stagnation and increase company’s earnings per share more cohesive and systematic plan is needed. We would recommend the long term strategy development to increase the efficiency and competetiveness of the 3M products.
3M is fundamentally a science-based company. We produce thousands of imaginative products, and we're a leader in scores of markets - from health care and highway safety to office products and abrasives and adhesives. Our success begins with our ability to apply our technologies - often in combination - to an endless array of real-world customer needs. Of course, all of this is made possible by the people of 3M and their singular commitment to make life easier and better for people around the world. We leverage these competencies to create innovative solutions for our customers and to also provide investors with attractive long-term returns.
Subject : Recommendations for returning 3M to 20 return on equity and improved ROCE
To Whom It May Concern ,
The company 3M has been known through the years for its innovative approaches when it comes to doing business . It was even recognized by the magazine Fortune as one of the most innovative brands in the world to date . With this in mind such strategies and marketing approaches that are used by the company ought to be at par with the innovative standards that 3M has been known for .
Yet , the current policy implementation schemes of the company fall short in the attainment of such goals . The past administrative frameworks that 3M adopted are aimed more at addressing short term goals that addressing the long term objectives which is quite important in situations that the overall market would not fair in well . For instance , the worldwide recession in the early 90 's serve as a new challenge for 3M specifically in the area of risk management . Currently , the risk management policies of the company are gauged in at addressing only the internal risks . At some point it is quite positive to do so , but looking at the situation in the long run , it would not be beneficial for the assessment of the performance of the company if 3M remains passive on the emerging threats in the market and thereby would forego market opportunities . The need to innovate such company policies is highly advisable for the case of 3M . In an effort to address the current company situation of 3M wherein is at a point of sluggishness in terms of sales and profitability , it is therefore highly recommended that the company return on its 20 return on equity levels from the current 18 .8 level ADDIN EN .CITE
* There are 6 absolutely essential elements which need to be in place for a corporation to begin to think that it has a culture which supports innovation; 1. leadership at the top and from the Board, 2. spending on research and development, 3. rewards and incentives, 4. tracking the ‘innovation dynamic’, 5. tolerance to being different, and 6. people management. Each of these is further outlined below. 1. Leadership at the top and from the board.
Management needs to state explicitly that they support innovation (which implies encouraging change and accepting risk) and in their actions reinforce the spoken word. It is important to ‘walk the talk’. Board support is an integral element in this cultural driver since management has to be, and be seen to be, in sink with the boards views and visa-versa. With the current emphasis on corporate governance where corporations are encouraged to have ‘independent’ members of the board and a chairperson who is not the CEO, this coincidence of thinking is perhaps not so easily accomplished as in prior years where internal boards were more the norm and where the chief executive role and chairperson role were often held by the same individual. 2. Spending on research and...
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