Economics for Managers - The Company Eastman Kodak

ECONOMICS FOR
MANAGERS
CASE STUDY ANALYSIS

The company Eastman Kodak was founded in the year 1888 and is engaged in the
production of the camera related products, with key basis on the photography. The key
business areas of the company include Print Systems, Micro 3D Printing and Packaging,
Enterprise Inkjet Systems, Software, Consumer and films. The following report would
highlight the organizational structure and business strategy of the company and the influence
of its structure on the strategic position. The discussion would end with a conclusion
highlighting the key causes of the failure of the entity in spite of gaining competitive spot in
early days.
An organization’s structure plays a key role in the conduct of business operations and
the implementation of a business strategy. In the earlier organizational structure of the
company Eastman Kodak was divided in the divisions while all of them were centrally
controlled. Further, the centralized departments were not integrated with each other, leading
to the issues in coordination. The lack of the coordination between the central departments of
the entity led to the culture of laissez-faire within the organization. It has been studied that
the research managers would not indulge into much technological advancements, as was the
need of the external environment changes in the form of the digital age (Dan, 2013). Further,
the middle managers had lack of authority and independence to innovate and they were
largely dependent on the instructions from the senior managers at the central level. The
reason for the same can be stated to be lack of the communication and coordination between
the various departments of the entity. Additionally there was a lack of a consistent vision in
the senior managers and they did not involve the departments in the decision making
processes (Mui, 2012). Thus, the major issues that can be seen in the corporate culture and
the traditional organizational structure was that there was a very little room to change and
adaptation. In spite of the large scale operations, the company filed for bankruptcy.
The business strategy of the company has been elaborates as follows. The company
had initially invested heavily in the research and development and the quality infrastructure
worldwide. This was supported by the distribution network for the support of the photo
business. Thus, by the virtue of the vertical integration, the company not only owned most of
the elements of the supply chain and gained economies of scale, but also developed the
monopoly in the market. The large R&D center of the company earned numerous patents for
the company in the initial years of operation. However, as mentioned in the previous parts,
entity did not carry out the efficient technological integrations and application of new
technologies in the operations. One of the principles of the conduct of the business is that