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Introduction:

Corning Incorporated is a company name that is synonymous with the term innovation. Since

its inception, the company founders have instilled a belief in unique product creation, including

life altering product innovations such as the light bulb envelope, TV tube, and optical

waveguides. The company is basically reputed for its glass production. Now maximum premium

mobile brands are using their glasses for their phones. Samsung and Nexus both is the key

client of Corning Inc. The company has more wings like environmental science related business,

Pharmaceutical business, optical communication business, Display business and research and

development business. Their values include quality, integrity, performance, leadership,

innovation, independence and the individual. The company has more than 10000 employees

which represents its extensiveness.

About Corning Incorporated:

Corning Inc. is a leading global technology firm that makes products for the display

technologies, telecommunications, environmental technologies, and life sciences markets. The

firm is the world's leading producer of liquid crystal display glass for flat-panel televisions and

computer monitors, and the leading maker of optical fiber for telecommunications use. Corning

also makes emissions control devices that utilize glass, glass ceramic, and polymer technologies;

glass and plastic-based products for the biotechnology industry; other glass-based scientific and
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industrial products; and Steuben Glass, its last remaining consumer product. Corning, along

with its subsidiaries, operates nearly 50 manufacturing and processing plants in 15 countries.

History of Corning Inc:

Corning traces its beginnings to 1851 when Amory Houghton purchased an interest in Bay State

Glass Company of Cambridge, Massachusetts. Three years later he founded Union Glass

Company of Somerville, Massachusetts. After selling Union Glass he and his sons bought the

Brooklyn Flint Glass Company of Brooklyn, New York, in 1864. Four years later they moved

operations to Corning, New York, renaming the enterprise Corning Flint Glass Company. They

chose this western New York location because of its favorable location for transportation as

well as for acquisition of coal and wood, which were then necessary for glass manufacturing.

Amory Houghton, Jr., became president in 1875, the year in which Corning Glass Works was

incorporated, and remained in the post until 1911. During these years the firm began to exhibit

the technological prowess for which it has been known since. The company first called upon

scientists at Cornell University in 1877 for help in improving the optical quality of its lenses. In

1880 Thomas Edison asked Corning Glass to make bulbs for his electric lights.

An important milestone during Amory Houghton, Jr.'s years as president was the establishment

of a research laboratory in 1908. It was the fourth such facility in the United States. The

laboratory developed a heat-resistant glass, borosilicate, capable of withstanding sudden

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changes in temperature. One resulting 1912 product was a shatterproof lantern for railway

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signalmen. Another important borosilicate product, Pyrex, dated from 1915. It found

immediate use as laboratory equipment, but it was some years before the company realized its

consumer-market potential.

Corning continued to be managed by members of the Houghton family. Alanson B. Houghton

succeeded Amory Houghton, Jr., and served until 1919, when he was followed by Arthur A.

Houghton, president until 1920.

During World War I, when Corning was able to make glass that others could not produce, the

company prospered as a supplier to defense contractors. In the postwar years, demand for

Corning products led to the invention of a ribbon machine in 1926, which produced blanks for

incandescent lamps at the rate of 2,000 bulbs per minute.

Steuben Glass, a division of Corning, originated in Corning, New York, but did not become part

of Corning Glass until 1918. It specialized in fine optical glass as well as fine cut glass. Steuben

began producing the crystal for which it became famous in 1933, when Arthur A. Houghton Jr.,

great-grandson of the founder, became president of the subsidiary. He decided that the

company was to sell only quality products of the highest design, and he and a vice-president

smashed over $1 million worth of lesser glass in the company warehouse.

Financial Analysis:
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The strategy developed by Corning Incorporated has led to strong performance over
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the last five years. Net sales increased by 89.6% in the last five years, from $3.09 million in

2003 to $5.86 million in 2007, demonstrating great growth and improving revenue. For

example, net income increased by 1064% during these five years, from negative $223 million to

$2,150 million.

Appendix A displays the increase in return on equity from -4% to 23%, proving that Corning

Incorporated has a strong ability to generate profit and to manage shareholders’ capital. The

return on assets increased from -2% to 14.1%. This metric indicates that Corning has the ability

to recover from debt and earn a higher profit. The operating margin has improved from -21% to

18%, demonstrating that Corning can generate increased profits. The asset turnover ratio has

decreased, reflecting that the pressures from production capacity have lessened. These key

financial ratios reveal that Corning Incorporated has a strong ability to grow, generate profits,

and succeed financially in its industry.

Key Issues:

As Corning Incorporated is growing rapidly, there are several issues threatening the success of

the Growth and Strategy Council, the company’s unique process for innovation management.

First, while a large number of people attend the GSC meetings, there are only a few people who

engage in making the decisions. This is an issue because as attendance at the meetings

increases, it presents the possibility that “honest and frank dialogue” may not be sustainable

(Henderson & Reavis, 2009). Second, there is an issue with the GSC’s ability to prioritize
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business proposals. The ability to prioritize is important because it helps to guarantee that “the

right growth opportunities go in front of the GSC at the right time” (Henderson & Reavis, 2009).

Third, as the business continues to grow, the GSC will be “exposed to very different businesses

and business models” (Henderson & Reavis, 2009). The members of the GSC may not have the

expertise required to make decisions on these new opportunities. When unfamiliar business

ideas and business models are presented to the GSC, it is challenging for the members to

understand the concepts and make informed decisions as to whether or not the concept would

be a viable opportunity for Corning Incorporated to pursue.

Strategic Options:

In order to overcome these key issues, there are three strategic options Corning Incorporated

could pursue. The first option is that Corning could limit the number of attendees at the GSC

meetings. Corning should only permit the key decision makers, employees who have had a long

history with the company, and employees with expertise on the business model being

presented to attend. Implementing this option would help facilitate open discussion at the

meetings as less people would be involved; and this option would be free to implement. This

option, however, could create tension in the company and anger some employees who would

like to attend but would no longer be allowed to do so. The second option is that Corning could

screen the proposals that are scheduled to be presented at the meetings. By reviewing the

proposals prior to the meetings, the GSC would be able to prioritize the opportunities and
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ensure that only the most viable prospects are presented. This option would be free to

implement as well; however, it would require a time commitment.

Mission Statement:

"Corning Incorporated, the world leader in specialty glass and ceramics, has worked closely with

customers to understand their problems, explore possible solutions, and then bring those

solutions to life through our world-class scientific and manufacturing capabilities."

Slogan:

"Discovering Beyond Imagination"

Values:

Corning’s Values form the unwavering ethical compass that guides our business decisions and

our interactions with one another. Our Values are the key to our business success, a source of

pride and excitement for our employees, and the factor that ultimately sets us apart from our

competitors. In short, we believe that how we do things is as important as what we do. Corning

employees can all contribute to the success of the company by constantly living Our Values.

Their values include:

 Quality

Total Quality is the guiding principle of Corning's business life. It requires them, individually and

in teams, to understand, anticipate, and surpass the expectations of our customers. Total
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Quality demands continuous improvement in all our processes, products, and services. Their
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success depends on our ability to learn from experience, to embrace change, and to achieve the

full involvement of all our employees.

 Integrity

Integrity is the foundation of Corning's reputation. They have earned the respect and trust of

people around the world through more than a century of behavior that is honest, decent, and

fair. Such behavior must continue to characterize all our relationships, both inside and outside

the Corning network.

 Performance

Providing Corning shareholders a superior long-term return on their investment is a business

imperative. This requires that they allocate their resources to ensure profitable growth,

maintain an effective balance between today and tomorrow, deliver what we promise, and tie

their own rewards directly to our performance.

 Leadership

Corning is a leader, not a follower. Their history and our culture impel us to seek a leadership

role in their markets, their multiple technologies, their manufacturing processes, their

management practices, and their financial performance. The goods and services they produce

are never merely ordinary and must always be truly useful.

 Innovation
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Corning leads primarily by technical innovation and shares a deep belief in the power of

technology. The company has a history of great contributions in science and technology, and it

is this same spirit of innovation that has enabled us to create new products and new markets,

to introduce new forms of corporate organization, and to seek new levels of employee

participation. They embrace the opportunities inherent in change, and they are confident in our

ability to help shape the future.

 Independence

Corning cherishes and will defend its corporate freedom. That independence is their historic

foundation. It fosters the innovation and initiative that has made their company great, and will

continue to provide inspiration and energy to all parts of their network in the future.

 The Individual

They know that in the end the commitment and contribution of all their employees will

determine their success. Corning believes in the fundamental dignity of the individual. Their

network consists of a rich mixture of people of diverse nationality, race, gender, and opinion,

and this diversity will continue to be a sterile of their strength. They value the unique ability of

each individual to contribute, and they intend that every employee shall have the opportunity

to participate fully, to grow professionally, and to develop to his or her highest potential.
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Problem finding based on case:

 Basically that incident occurred because of telecom crash and lacking in research and

development. So they did not predict that this crash could bring a huge disaster for

Corning Inc.

 Corning Inc’s decision making process is centralized.

 Some of the officials are said the GSC should not be a problem solving body. GSC can be

a problem finding body that will find out the problems and raise questions regarding

problem in front of senior officials. Though Corning depends on GSC in every issue. So

higher officials are not getting chance to think about the solution by their own which is

creating lack of intelligence of the higher officials.

 Corning Inc faced loss at the end of 2000 and into 2001 because the sales were got

down and stock price got collapsed.

 That time they spend less on research and development and invested in their business

continuously without any research.

Solution:

 Strong Research and Development Program: Corning faced loss in 2000 and 2001 for
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lack of research and development. So if they did research on telecom sector that time

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then the chance of failure would be less because still the telecom loss in not recovered.

So we can see the importance of research and development is important for business to

create new ideas and avoid unfavorable situation. Some benefits of Research and

development is given below:

 Unique products: these can give businesses a unique selling point (USP). They

can then acquire patents for these products. The patent is a legal protection that

prevents other companies from copying them.

 Competitive advantage: through R&D Corning will be able to build advantage

over its competitors by bringing innovative products to the market.

 Long term income: once a product has been developed it can generate a strong

stream of profits for many years.

 Ongoing research also leads to new opportunities: researchers cannot always

anticipate what the results of their research will be. Often chance discoveries

open up whole new channels of research.

 Enhanced reputation: engaging in research helps to build Corning’s brand.

 Decentralized Decision Making: Basically Corning takes decision making process is

centralized so when GSC gives any suggestion then higher authority take decision based

on GSC’s thinking. So employees are not getting chance to be part of decision making

which should be solved because employees are working in the field so they know what
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would be best for Corning. Some benefits of Decentralized decision making is given

below:

1. Reduces the burden on top executives: Decentralization relieves the top

executives of the burden of performing various functions. Centralization of

authority puts the whole responsibility on the shoulders of an executive and his

immediate group. This reduces the time at the disposal of top executives who

should concentrate on other important managerial functions. So, the only way to

lessen their burden is to decentralize the decision-making power to the

subordinates.

2. Facilitates diversification: Under decentralization, the diversification of

products, activities and markets etc., is facilitated. A centralized enterprise with

the concentration of authority at the top will find it difficult and complex to

diversify its activities and start the additional lines of manufacture or

distribution.

3. To provide product and market emphasis: A product loses its market when new

products appear in the market on account of innovations or changes in the

customers demand. In such cases authority is decentralized to the regional units

to render instant service taking into account the price, quality, delivery, novelty,

etc.
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4. Executive Development: When the authority is decentralized, executives in the

organization will get the opportunity to develop their talents by taking initiative

which will also make them ready for managerial positions. The growth of the

company greatly depends on the talented executives.

5. It promotes motivation: To quote Louis A. Allen, “Decentralization stimulates

the formation of small cohesive groups. Since local managers are given a large

degree of authority and local autonomy, they tend to weld their people into

closely knit integrated groups.” This improves the morale of employees as they

get involved in decision-making process.

6. Better control and supervision: Decentralization ensures better control and

supervision as the subordinates at the lowest levels will have the authority to

make independent decisions. As a result they have thorough knowledge of every

assignment under their control and are in a position to make amendments and

take corrective action.

7. Quick Decision-Making: Decentralization brings decision making process closer

to the scene of action. This leads to quicker decision-making of lower level since

decisions do not have to be referred up through the hierarchy.

Summary of the Case:

Corning Inc is basically a company which does business based on R&D and innovation. They
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have basically 4 business segments which are:

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1. Display Technologies

2. Telecommunications

3. Environmental Technologies

4. Life Sciences

Corning’s organizational structure combined well defined business units run by business

general managers (GMs) who report to the COO and a large centralized research capability

reporting to Joe Miller, the CTO. GMs are responsible for new product development,

manufacturing, sales and marketing, but all longer-term research is carried out at Sullivan Park,

the company’s large and soon-to-be-expanded R&D facility.

Management Committee is responsible for setting corporate strategy and running the

company. The Operating Committee is responsible for overseeing businesses’ current year

performance to plan. Then there were the two councils responsible for overseeing the

company’s innovation projects and programs.

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The CTC, started in 2003 by Joe Miller, handled Stage 1 and 2 projects, focusing on early stage

technologies and potential “keystone components” for both new and existing businesses.

Stage I → Gather information, build knowledge

Stage II → Determine feasibility

Stage III → Test practicality

Stage IV → Prove profitability

Stage V → Manage the lifecycle

Stage 1 - Gather Stage 2 - Stage 5 -

Stage 3 - Test Stage 4 - Prove
info and build Determine Manage the
practicality profitability
Knowledge feasibility lifecycle
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The CTC, which include Miller, his direct reports, the Director of Strategic Planning, and

Corning’s Chief of Strategy, made decisions on whether early Stage 1 and 2 projects fit in with

Corning, and over time, when and whether they are ready to graduate on to the GSC and

whether they need additional restheirces. As the company’s innovation portfolio management

team, the GSC focuses on what were deemed “high-potential” Stage 2 projects and projects in

Stage 3 and 4.

In 2007 RD&E budget, 64% was spent on development and engineering for existing businesses

and was funded by the businesses based on their P&L. The remaining 36% of the RD&E budget

supported research and was paid for at the corporate level. Of the investment in research, 50%

went toward developing long range technology for current businesses (business-aligned

research and early stage marketing) and 50% on the creation of new ideas and businesses

(exploratory research and new business development), known colloquially as the “next wave.”

RD&E investments were not necessarily linked to a business’s profitability.

In practice, innovation at Corning followed what is called the “innovation recipe.” It entails

acquiring a deep understanding of a specific technology alongside the identification of

customers’ difficult systems problems and solving those problems with a unique combination of

materials and processes. The result is what Corning referred to as a keystone14 component.

All innovation programs, which are headed by a program manager and included a commercial

leader, a technology leader, and a manufacturing and engineering leader who report to the
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program manager, used Corning’s stage gate innovation process to advance through the stages
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of product and process development. Advancing to the next stage required meeting

deliverables and advancing through the “Decision Diamond”. Corning’s innovation process has

a series of detailed leadership questions for each of the ftheir major focus areas: market,

product, process and business case. Decisions on pacing and advancement of later stage

programs also revolve around analysis and answers to these questions.

GSC plays a big role in Corning because the company is mostly relying on this organization.

There is a calendar where GSC meeting will be held and the latest discussion and problem

finding and solving process will be discussed. GSC is the key player for Corning to take any kind

of decision making. The authority follows the instruction of GSC and takes decision based on

GSC’s suggestion and proposal.

Conclusion:

Every business makes mistakes and corning is not out of it. So we have learned that research

and development and innovation play a big role to create a profitable long term sustainable

business. Without innovation a business cannot co-up with the competition because if

competitors offer better things from ytheir business then customer will shift to them and ytheir

business will face loss. So R&D helps a business to get up to date with the technology, trend and

demand.
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References

https://www.corning.com/worldwide/en/about-us/company-profile.html

http://www.makingafortune.biz/list-of-companies-c/corning.htm

http://www.encyclopedia.com/topic/Corning_Inc.aspx

http://www.ytheirarticlelibrary.com/organization/decentralisation-meaning-advantages-and-

disadvantages-of-decentralisation/25703/

http://businesscasestudies.co.uk/syngenta/product-design-through-research-and-

development/challenges-and-benefits-of-rd.html#axzz42uQsmZmA

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