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Analyzing Managerial Decisions: Eastman Kodak

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Analyzing Managerial Decisions: Eastman Kodak

by

HCM-540, MBOL5, Health Care Organization
Instructor:
Saint Leo University
Distance Learning

November 24, 2013

1) What factors motivated Kodak to change its organizational architecture?
There were several factors that persuaded Kodak to make changes to its organizational architecture in 1984. Kodak had come to the conclusion that its present organizational architecture did not fit the current business environment for the industry. The biggest factor that persuaded Kodak to make a change was the growing competition in the industry and losing the dominance it once had in the film market. The emergence of new product being made by Fuji Corporation dwindled away their market share. In the early 1980’s, Kodak saw their share price drop from a high of $85 to a low of $71 in 1984. This was cause for change to its organizational architecture. In order to stop the bleeding, Kodak realized it had to restructure and react quickly. With developing technology, Kodak was losing ground fast and was no longer the conglomerate it once was.

2) What mistakes did Kodak make in changing its architecture?

Kodak was faced with trying to regain market share. It needed to quickly make changes to respond to shareholders concerns. There were obvious advances in technology that concerned Kodak. Kodak restructured creating 17 new business units with profit-loss responsibilities. Unit leaders were given increase decision-making power for new products, pricing options and other pricing policies. Prior to this, Kodak’s decision –making was more centralized requiring lower level decisions of managers to funnel through top-level management before any changes were made or implemented. Top-down decision making is not always in the best interest of a company because it has a tendency to slow progress by having to go…...

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