Racidal Change Kodak

Topics: Change management, Strategic management, Change Pages: 7 (2593 words) Published: October 6, 2009
Radical change in Kodak

This essay is supposed to examine the change context and the strategic changes implemented by Mr. Antonio Perez, the present CEO of the Kodak company. There is also the examination of the strategic changes pursued by him: leadership and especially the importance of the new CEO, communication process, reorganization of the company, launching new products and partnerships. The appropriateness of actions taken by Mr Perez is based on the literature covering the strategic change management. The second last part of the essay covers suggestions for future actions, which should be taken by the new CEO. Kodak has faced a deeply transformation, which is called radical change. According to Balogun (2001) changes are never the same as the environment is changing all the time. Kodak is one of the oldest companies on the photography market. It was established more than 100 years ago. This was the iconic, American organization, always on the position of the leader. Its cameras and films have become know all over the world, what is more, it has been known for its innovations. Kodak’s strength was it brand – one of the most recognisable and resources, that enabled creating new technologies. However over the time, the situation started to change for Kodak, as it has underestimated the changes on the market, what caused late commercialising digital technologies, although it was investing in it. The core business of Kodak- the film business, started to decline and some areas of the business started to be less profitable and filled with many competitors, especially cheap ones from Asia. The prices of the digital cameras were falling. This situation is similar to Sony, because after being for the long time a leader suddenly the company has found itself in totally different landscape. All of these resulted in very sharp fall of its share price to the level of those from the 1980’s. When Kodak was staying in one point, the other companies were all the time moving forward. Reluctant board was finally forced to change the company. Mr. Antonio Perez was appointed to lead this change. The new CEO was a sixty years American with experience from big, American company- Hewlett-Packard, which also is involved in digital technologies. Mr. Perez too new role and quickly started to implement changes, such as reorganization of the Kodak, changing the image of the company, refocusing on digital technology. All of these indicates that he decided on radical change – revolution. The need for change became obvious and also the fact, that the way of delivering it determines future be or not to be of Kodak. According to (Kanter, 2003) only the new CEO can bring change effectively. For old CEO it is impossible to provoke enough enthusiasm for a turnaround and new CEO was outside of the structure and can name the problems. He is also more credible in contacts with customers. That is why Kodak decided to start the process of change with the new CEO. The article of Attaran (2000) shows that many American companies had the experience of changes, especially radical ones and some of them were successful in pursuing the change, that is why the choice of Mr Perez, who is American and had experience in managing the US company active in digital technologies, is not a coincidence. According to Graetz (2002) there are two leadership styles, which can be used, when the decisive action is required: charismatic transformation and turnarounds. The first one is characterized by charismatic leader, who has to bring the change and communicate the need for it. The other one is more tough strategy, which bring change by developing new structures, lay off excessive staff and establish a new coalition. Often the leaders use a mixture of styles. Mr Perez has been using both of them, he influences others in the company and outside and constantly informs about need for change, but also he creates new structures and makes people redundant. Hammer...

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