Kodak Case Study; Organizational Architecture

Topics: Management, Digital photography, Restructuring Pages: 5 (1679 words) Published: August 10, 2013
To: Kelly Johnston, CEO Kodak
From: Head of Marketing Operations, Kodak
In Reference To: A Kodak moment; drawing your attention to major architectural flaws within our company, specifically the MAPP plan, as well as solutions for more sustainable options for future structures.

It has come to my attention that there are some major flaws lying inside our organizational architecture. These flaws lay in the foundation of Kodak`s organization structure and so we cannot move forward until these basic errors are corrected. We are seeking companywide success and must act as a company to achieve this.

Throughout its history we`ve experienced dramatic economic upturns and downturns. We are currently trying to pull ourselves out of bankruptcy and I believe the way to do so is through changes in our organizational architecture. These changes alone will not lead to success, as we still face problems in the digital technology area however they will certainly contribute positively. This means making changes in performance-evaluation methods, reward systems and responsibility assignments. Our previous attempts; decentralization in 1984 and the MAPP plan in 1987 have been widely unsuccessful. This means we must look closely at what went wrong within these plans, and restructure accordingly.

Now, I’d like to specify what the flaws were in our initial organization restructure plans. 1987 saw Kodak change the assignments of decision rights within our company. Clearly between 1983 and 1987, Kodak leadership realized the need for more change, and we restructured the management’s evaluation and reward systems with the MAPP program. I believe we at Kodak have taken two out of three steps towards a complete and successful organizational restructuring. However the final step must be taken; analyzing the results of the MAPP restructuring and changing the plan accordingly. I believe that the MAPP plan was unsuccessful because it targeted Kodak management only. If we want companywide success, we must create a plan that involves the entire company.

Loosely MAPP meant to increase incentive to innovate and produce through a pay cut and variable bonus. However, as we know this did not have widespread effects but I do not believe that there were not effects seen within Kodak’s management. I’m sure if we look closely; Kodak’s management did increase innovation and production however maybe these results didn’t trickle down to the lower status employees. I believe that we must approach all employees at Kodak if we want to see Kodak crawl out of its hole.

With MAPP the base salary of management staff was cut by ten percent and that loss was replaced with a variable bonus. We must analyze how management reacted to this decision. We then must carefully construct similar plans for all levels of employees – of course these plans will differ for each and every level.

I believe that if we approach all employees within our company with our new plans, we will survive and prosper in today`s photo technology industry. Following this memo is an analysis of Kodak’s organizational architecture experiences of late.

Initial Motivations for Restructuring
Some of the factors which originally motivated our company to change its organizational architecture include economic downturn, loss of profit and changes in the market environment for which we needed to adjust. Essentially we fell from our position as leader in the photo production market. We can attribute this to our slow advancement in the area of digital photograph technology. Since we were founded in 1888 the only major competitor we’ve faced prior to the early 1990’s was Japanese company Fuji Films. In fact, our own researchers developed the first digital camera itself in 1975, although we chose not to mass produce it at the time. We were essentially our own worst enemy.

In the nineties the photographic market shifted towards digital technology and we needed to diversify. We were slow to...
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