1. The case discusses about competition as the major driver of change.

Explain Kodak’s
organisational environment. What is its organisational domain? Who are the other “species”
in the same domain? How can you explain the stages of evolution of Kodak as an
organisation using the case facts? (Hint: use population ecology model, try to use any of the
growth/decline theories that we discussed, try to link the case facts with the theory)

Ans:
Kodak’s Organizational Environment:
Specific Environment:
 Suppliers: Organisations who used to supply the raw materials to produce high-quality
chemicals for image printing, IT companies; who used to provide the software/IT support,
Electronic parts suppliers for Printers and Camera.
 Competitors: First, Fuji comes into the picture. Then Sony and Canon join the market in the
digital camera. Later, Samsung draws enormous attention with their innovative solutions.
 Customers: Since Canon was the first player in the market, they have a huge fanbase.
 Managers: A bunch of high-level managers who were part of Kodak in their good times.
General Environment:
 Technological Forces: The invention of the digital camera acted as a significant
technological force for Kodak.
 Economic Forces: When Kodak was a cash-rich company, they did not think about reducing
operating costs; instead, they choose acquisition. But later, when they realize the
substantial operating cost, they started lay-offs.
Organizational Domain:
Kodak emerged as a monopoly in the Camera and film business. Later, they expanded their
horizon with four domains – Information system, health, and chemical domain.
Other ‘Species’: Fuji emerged as the first competitor of Kodak in the camera and film business
with their low-cost variants. Later, Sony and Canon come into the picture along with Samsung.
From the Information system domain, Kodak gets huge competition when google comes to the
market with their open-source tool – Picasa. On the other side, GE was a significant competitor
in the medical image processing business. The chemical domain faced a significant setback
when the popularity of digital cameras get increased.
Stages of evaluation:
As per our class discussion, we believe Kodak follows Greiner’s Model.
 Growth through creativity: Kodak formed a dry plate photography technique that could
process the image less time. Along with the first portable camera, Kodak as an organization
emerged as a monopoly in the market. One of their main focus was to get the lead through
technological developments. Kodak’s initial leadership was very focused on R&D. In this
way, they developed an advanced film that was the best fit for the portable cameras. In
this period, Kodak never faced a leadership crisis as the whole team was aligned to the
values created by the initial leaders.
 Growth through direction: From 1970, Kodak started facing the competition for the first
time. Their profit margins reduced from 16% to 10% in the period of 10 years. In 1983,
Colby Chandler took over as chairman. In this stage, Chairman Colby Chandler should
choose an organizational strategy to meet the targeted profitability. He should design a
structure and culture that would allow the organization to act as per the new trends of the
market. A strong command was needed at that time so that Kodak can repair its dent in the
market. But for the first time, Kodak missed its profit target. Here we can see a clear
indication of the “Crisis of Autonomy.” Chandler started acquiring companies in different
domains and made the strategy more complex for them. When a cost reduction was
required, he took the approach of investing with the cash in hand. Later these investments
proved a lousy investment, and Kodak had to sell their assets to reduce the burden. It
increased the unnecessary transaction costs.
After this period, Kodak never be able to come out from the bad phase. Top leaders should
find new ways to increase the revenue, but they failed to do that, and competitors took
their marketplace. Kodak falls into the chasm. After that, some sunshine was there in the
Kodak account, but it was not long-lasting.