Leadership Theory: Analysis of Motorola's Leadership Problems

This report delves into the leadership problems faced by Motorola, particularly in the context of its expansion into the Chinese market. The analysis identifies key issues such as the shortcomings of a hierarchical organizational model, including slow communication, lack of autonomy, and dependency on strong leaders. The report reviews relevant literature to support these claims, examining how Motorola's rigid structure hindered its ability to adapt to the rapidly changing market demands in China, where local competitors were more agile and responsive. Lessons learned from case studies, particularly those highlighting the experiences of other companies in the Chinese market, are incorporated. The report also provides self-reflections to consolidate the findings and concludes by emphasizing the importance of adaptable leadership and organizational structures in a globalized business environment. The report underscores the need for decentralized management, improved communication, and fostering autonomy to overcome the challenges of entering new markets and maintaining competitiveness.

Running head: LEADERSHIP THEORY
Leadership Theory
Student’s Name
University Name
Author’s Note

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Table of Contents
Part 1: Leadership Problem of Motorola....................................................................................3
1.1 Identification of the Issue.................................................................................................3
1.2 Analysis of the Issue.........................................................................................................3
Part 2: Literature Review...........................................................................................................4
2.1 The shortcomings of the hierarchical organisational model.............................................4
2.2 The issue of slow communication in a hierarchical business model................................5
2.3 The Lack of Autonomy....................................................................................................6
2.4 Dependency on the stronger leaders.................................................................................7
Part 3: Lessons Learned.............................................................................................................7
3.1 Lessons learned from Case studies...................................................................................7
3.2 Self Discoveries and Self Reflections..............................................................................9
4. Conclusion............................................................................................................................10
Reference List and Bibliography.............................................................................................11

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Part 1: Leadership Problem of Motorola
1.1 Identification of the Issue
In the scope of its core business, Motorola had been doing well. However, the
company started to face issues on the verge of entering the Chinese market. By the time the
company had grown sluggish and the susceptibility of accepting the changes in the company
had subsided. That is why the Chinese business wing could not keep competency with the
other brands like Xiaomi and others. Naturally the higher management of the company was
raged as an outcome of this significant extension of the product development cycles. Slipping
competitive benefits has been on the horizon since the tech manufacturing companies of
Japan are more adept in responding to the consumer’s demands in terms of ‘innovating new
technologies based on cellular telephones as well as semiconductors.
1.2 Analysis of the Issue
The high demand for advanced technologies seemed to act as a catalyst for the
looming change requirements that the company could not cope up with. In the 90s and in the
beginning of the millennium the market in China have been presenting products that were
easily available in the market or the supply came from the local vendors of the inferior level
(Mittal & Dhar, 2015). Hence, at that point of time Motorola could use their R&D in China to
develop a product line that had been superior to the rest. The demand of the customers shifted
when the domestic brands started to manufacture equivalent technology at delivered that at
the same price. The organisational structure of the company in China was strictly hierarchal
(Bell & Jones, 2015). That is why, the developments of one department were not looked up
on by the other. On one hand, the sales and marketing team were focusing on developing
innovative sales techniques. On the other hand, the research and development team (located
outside China) was developing new product model, without paying heed to the market

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demand of the new areas where the company have been attempting to spread its business. As
an outcome, there was an ambiguity developing between the sales and production team.
There was already increased pressure on the service team in China and the corporate
governance body of the area to foster sales. However, the triumvirate office of the Chief
Executive Team of the company was also not able to give proper directions to the company’s
operations team in China because they were oblivious of the real market needs and the
company’s market deficit (Wang et al. 2016). In fact in one of the press releases of the
company, the CEO John Mitchell exclaimed that:
“They call us: Why can’t you be single in voice, structure and direction?”
In China, the hierarchal structure of the company needed a decentralised managerial
structure that was missing. The multiple layers of the company did not allow the real needs of
the customers to reach the ears of the higher management. As an outcome of this, an
unintentional consequence of creation of distance between the product line designers and the
real demands of the consumers occurred. The functional managers assumed stiff role in China
as most of the companies in the region do have the same kind of hierarchical structure of
management (Katou, 2015). That is why the trend of field analysis by the Functional
management team is absent in the operations of China. As an outcome of this, the more grave
issue that arose was that none of the managers could be held individually responsible for the
any particular project through all its cycles since its origination in customer discussion
through its design, testing, development up to production and then sales (Mesu, Sanders &
Riemsdijk, 2015).
Part 2: Literature Review
2.1 The shortcomings of the hierarchical organisational model

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The traditional organisational model might not work for the good of an organisation if
the company is specifically entering a new market or the functional and the higher
management does not have a grave understanding of the market problems and the market
demands before entering a new market. Companies like Motorola had entered the Chinese
market when there were seldom any international market ‘layer in their level. Since the
market competition was low at that time, the organisational design or the sales parity did not
affect the business. However, another important fact that Kumar et al. (2017), states in this
context is that the companies that have countrywide business domain .in the country all
follow a hierarchical organisational design. The market demography is generally controlled
and the internal big market players in the Chinese industrial domain have a sound understand
of the market demands. Another reason behind this is that the higher managers or the
directors of the biggest Chinese companies have a strong political bonding. That is why the
market demography and the product demands seem simplified before them. That is why
foreign companies that entered the Chinese market around 1990 were ent9icved to follow the
hierarchical organisational structure. However, this is the reason why Yoon et al. (2018),
opines that before the creation of hierarchal organisational model that can be very hard to
dismantle, the higher management should consider the drawbacks that cam arise as an
outcome of the fast growing of the business model.
2.2 The issue of slow communication in a hierarchical business model
People who are dealing in the hierarchical organisational structure have the tendency
of approving the communications as the pass up and down through the extensive hierarchy.
This implies that only 60 to 70% of the information gathered from the previous hierarchy is
only passed down to the next level. As an outcome, delays as well as confusion are natural
outcomes. A manager might not get aces to an email for an extensive period and as such at
any point of time can publish an abrupt opinion or place any abrupt restriction that would kill

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the entire chain of communication altogether. In this context, Yin (2017), opines that the
amount of time that can take for a directive from the end of the management to reach the
discretionary employees can become the cause of unnecessary and costly delays. The
example of the High Tech Solutions Company can be highlighted here. They needed to ramp
up their production in order to make them ready to get hold of the new customer base.
However, owing to the lack of proper orders from the upper management, the employees
could not being the task of increased production for many days and weeks after an issue of a
discretionary order.
2.3 The Lack of Autonomy
In the shape of a rigid hierarchy, the people who have to deal directly with the issues
of the customers have the absolutely minimum authority to solve those problems. The higher
is the rank of the manager, the most distant is he or she form the actual issues that would the
customers have been facing. As an obvious outcome, this can cause delays as well as
confusion. The basic rule of a hierarchical structure is that the higher ups in the hierarchy
have all the rights to approve the decisions (Kelly, 2019). This directly implies that the
people in the company who are handling the customers directly would not be able to take any
prompt action in comparison to the readiness of the need of the customer.
The lack of autonomous control in a organisation can also be the cause of the
interdepartmental rivalry. As the departments of a company start to grow in the domain of a
certain demography, they grow a condition of competitiveness among themselves. This is a
very vital outcome of the hierarchical structure. Many of the departmental heads in such a
condition tends to take decisions that impact the growth of the concerned department rather
than the whole organisation. An evidence can be provided in this context. It can be supposed
that if the department for production decides that quality would no longer be a factor to be

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emphasised up on, the sales department of the company would be left without no products
that can match the market competition. As Shukla (2016), professes, there are other directive
disadvantages also. The departments might also conflict for gathering higher budget for the
operations of their department only, rather than considering the condition or the wholesome
budget plan of the company or the actual plan of expansion of the company in a particular
demographic region. For evidence, if a smartphone manufacturing company’s research and
production unit makes new product with the latest technologies and on the contrary it is
visible that the average age group of the demographic target market is over 50 years and the
people are not fluent with the latest technology, they would not be enticed to buy the
products, since they would not understand the significance of the latest technology. On one
hand the company would invest capital to discover latest mobile technology and in spite of
that they would not get recognition of their effort in the form of increment in sales.
2.4 Dependency on the stronger leaders
The hierarchy of the company cannot operate freely in case if the leaders at the
topmost position are weak. In case if the people at the pinnacle of the organisation are
making inefficient actions, the effective actions for the market cannot be taken. For evidence
if the CEO of the company is ignoring the business risks, he might be increasing borrowing at
the cost of expansion. The departments might attempt to invest more in order to take the
advantage of the influx of cash and at the same time the company might be ignoring an
impending threat from an unanticipated competitor. The drop of sales resulting out of it could
possibly mean that the organisation is not able to clear the debt (Li, Li & Han, 2018). The
weak decision making that overlooked the risk led the followers to the mouth of a disaster. In
case if the organisational structure of the company would have been less hierarchical, the
other managers (functional managers) could have raised objections at the correct time to stop
the impending disaster.

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Part 3: Lessons Learned
3.1 Lessons learned from Case studies
The research data of the case studies can be utilised to look precisely atom the
customer behaviour in the biggest foreign companies’ market, for evidence, China. The
country is the largest market for wireless communication technology based companies. There
are 583 million users of mobile phones in the Chinese market. In such a utility market, the
share of Motorola has dropped down from 21% to 10% (Shaik & Abdul-Kader, 2014). The
thinner mobile phone portfolio and the slower launch of mobile phones in the market have
reduced the market demand of Motorola smartphones.
The price positioning of the product is another issue that have been highlighted in the
case studies. For all the handsets that have high end features, the company sets high end
prices. As an outcome of that, the companies that are offering budget smartphones in China at
most competitive prices are reaping the benefits of operating in a low end economy like
China. In the same place, companies like Xiaomi are escalating in customer demand
(Czekster et al. 2018).
On the other hand, another case study that reflects the market activities of the Aditya
Birla Group, shows what can be the feasible benefits of operating with a flexible
organisational structure in a market with flexible economy. As an outcome of maintaining a
functioning managerial body, the company have been able to develop a product line that has
benefitted their sales channels in over 5000 villages in India other than the primary cities of
the country (Devi, Dhivya & Shanmugalakshmi, 2016). The Community help group of the
company have also been performing at an equally high scale. The operational model of the
company have been highly effective. There is a body of integrated teams that surveys the
economic, social and the cultural development status of the residents that are dwelling in the

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area where the plants of the company are located (Zhong et al. 2018). As an outcome of that,
the internal acceptance of the company among the residents have increased. This kinds of
activities of the company are purely based up on flexible working environments where the
sales and promotions team can exercise their discretionary power to engage in the most
beneficial activities.
As it is evident in another case study, the understanding of the employees from their
job roles, by the managers can help the company. This can also help the supervisors in
manoeuvring the employees and the rate of acceptance of the plans of responsibility that is
imposed up on them determines at what rate the field activities of the company would excel
in the business environment of the destined country. In this regard, the author of one of the
case study materials have prompted that he would like to implement soma basic values in the
organisational structure like fostering a common purpose within the various departments,
create tsk interdependence so that the departments cannot feel free at competing against the
other departments as well as develop orientation among the work groups so that the
communication through the hierarchies become faster and lastly develop a pattern of open
communication within the entire employee base (Sunkle, Rathod & Kulkarni, 2014). This
would foster easy communication between the employees and the higher management, as an
outcome of which the discretionary authority of the local heads can be exercised easily. They
can gather direct grant from the higher authority and as an outcome of that the decision
making would be faster.
3.2 Self Discoveries and Self Reflections
I have realised that the basic issue that Motorola have faced while operating in China
is that they have adopted the traditional policy of organisational structuring without
appropriate market survey. They have also displayed acute leniency in mapping the market

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demand at the time of the launch of the business in China. In the initial business period, there
were few market competitors, and that is why I suppose that the company had been enticed to
join the business market. In this context, I can state that later the company did not take any
active step to revise the organisational pattern when the market competition became fierce.
This is why the market share of the Chinese business division of the company fell drastically.
I have also observed that there have been poor interdepartmental communication and trust
building among the members of the various work groups. This is what have proved to be fatal
for the future sustainability of the company.
4. Conclusion
In the scope of this report, the basic flaws that have been committed by the Motorola
Company have been reflected. The assessment of the hierarchical business model shows that
Motorola did not show interest in coming out of the stereotypical business mode and conduct
an integrated market based research for the development of the sales parity. This is what
forced the company to keep retarding on the business line and the product prices started to
increase as an outcome of that.

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