Eastman Kodak's Case: Strategic Failure in Management Planning

This case study examines the strategic failures of Eastman Kodak, attributing its decline to ineffective management planning and a complacent organizational culture. The company's inability to adapt to the digital age, coupled with communication gaps between top management and employees, led to its eventual bankruptcy. The analysis highlights the importance of revisiting communication processes, fostering bottom-up communication, and implementing effective training programs to enhance employee performance and motivation. Recommendations include avoiding a myopic view of the changing environment, focusing on the emotional aspect of the product, and restructuring top management to ensure adaptability and responsiveness to market changes. Ultimately, improvements in HR practices, management decision-making, and communication management are crucial for the sustainable success of the organization. Desklib offers a wealth of similar solved assignments and study resources for students.

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I. Current Management Planning:
Eastman Kodak focuses on imaging products and is famous for being associated with photography.
The company has its historic roots in photograph and was one of the most dominant players in the
photographic film industry during most of the 20th century so much so as the tagline of the company
the ‘Kodak moment’ was a part of the common lexicon signifying a personal moment which had to
be captured for posterity.
The company Kodak is a classic example of strategic failure in management planning of a market
leader falling prey to the syndrome of marketing myopia. The company started out by selling
inexpensive cameras and then making margins out of selling camera films founded in 1888. By 1976,
Kodak accounted for more than 85% of camera and 90% of film sales in America and was one of the
leading brands by 1996. The company suffered a setback as it faced bankruptcy by not being able to
keep up with the technological advances of the digital age. (Jim Riley, 2015) The company filed for
bankruptcy in January 2012 and emerged back from this bankruptcy after 20 long months in
September 2013. Most of the shifts in the state of the company can be attributed to the
management planning and the resulting organisational culture. The failure of the company was a
result of the complacent top management buried in hierarchy which failed to recognise the
employee talent and the company has since come back with the current organisation focussing on
growth. (Kotter International, 2012)
II. Employees Perceptions and Organizational Culture:
Much of the downfall of Eastman Kodak was attributed to the complacency of the organisational
culture among others. This attitude of the management of being a complacent leader led to the
ignorance of many issues which were seen and has proposed solutions by the employees, but were
not put to action as they were buried in hierarchy and ignored by peers and bosses. (Jim Riley, 2015)
The company went through many rounds of layoffs to cut costs and this led to a negative perception
with respect to the management and its planning among the employees. The employees who had
joined the company right out of college were now either jobless on in fear of losing their jobs. This
changed the employee perception towards the company which they once considered formidable.
This was a result of the delay of the company in realising the changing market, the management was
complacent as a leader and it was blinded by this success and failed to notice the emergence of the
digital technologies. When the company did embrace this change, they did it only half heartedly.
This eventually resulted in increased pressure on the teams working on digital products.
The management had obsolete assumptions about their business and the target audience and hence
they failed to realise the change in the needs of the market. The organizational culture and
management greatly influenced the make and break of this company.

III. Communication:
One of the major reasons for the failure of any organisation can be attributed to the communication
gaps that may exist between its top management and the ground level workers. The management
decisions are only as effective as their communication to the employees who would actually
implement them. Kodak was built on the ideology of innovation but the company failed to maintain
its position due to the failed communication among the hierarchies. The employee pool of the
company was talented and had the ability to be a great business. However, the top management
and the deaf ear it turned to the employees resulted in the downfall of the company. (HCA, 2015)
The turnaround of Kodak had a major contribution by the changes in the communication and
attitude of the top management in implement the same. Some major steps were the development
of many different forms of communication including face to face communication and written
communication as well. The management especially focussed on enhancing these forms of
communication to implement the new culture. (Md Rezaul Karim, 2012)
IV. Management Plan Recommendations:
The recommendations for the company include to not be a target of the myopic view of the
changing environment and focus on what the company actually stands for which is the emotion
rather than the product as in case of the photography cameras. This will help overcome the delayed
realisation of changes and be better equipped to face challenging disruptions.
The communication process in the company should be revisited to enable both top-down and more
importantly bottom-up communication more effectively. This can be done by holding timely
meetings of the higher management with the ground level employees and ensuring use of various
forms of communication like written, verbal etc.
Evaluation of the current training programs is a crucial measure to identify its effectiveness. Effective
training programs will increase the employee performance levels as they will be better equipped
with the skills needed for the job. Apart from this the increased activities for employee motivation
and a clear communication from the management regarding the important decisions and their
rationale to employees can help create n sense of responsibility in employees eventually leading to
increased employee performance.
A rational decision making approach can help in sustainable performance for the company. The main
areas of concern for Kodak are the top management decision failures and the communication gap in
the company. The company must focus on improves human resources management practices and
restructure the top management who is not myopic and is able to keep up with the changing
market.
V. Conclusion
The most important changes are in the HR practices, management decision making and the
communication management. These are the most important contributors to the downfall of the
company and must be dealt with. Improved HR practice will have a direct impact on employee

motivation and eventually lead to increased loyalty. The improved communication and management
decision making are crucial to the sustainable success of the organization.
VI. References:
Jim Riley (2015), “Organisational Culture: When the Culture Needs to Change”, Retrieved from:
http://www.tutor2u.net/business/blog/organisational-culture-when-the-culture-needs-to-change
Kotter International (2012), “Barriers to Change: The Real Reason Behind the Kodak Downfall”,
Retrieved from: http://www.forbes.com/sites/johnkotter/2012/05/02/barriers-to-change-the-real-
reason-behind-the-kodak-downfall/#6885bddf3698
HCA (2015), “HR lessons from Kodak’s turnaround”, Retrieved from: http://www.hcamag.com/hr-
news/hr-lessons-from-kodaks-turnaround-197391.aspx
5. Md Rezaul Karim (2012), “Kodak Changes its culture and its performance”, Retrieved from:
http://business.wikinut.com/Kodak-Changes-its-culture-and-its-performance/gzdfsvud/