ORGANIZATION THEORY & DESIGN Case Studies

Jun 18th, 2015
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1. How did the environment that Philips faced change during the 1960’s and 1970’s? What were the implications of those changes? Ans. Philips environment changed in 1960’s and 1970’s due to changes in trade and competitive aspects in global market. The first change was removal of trade barriers and new agreement and bodies like GATT and EC facilitated greater competitiveness and among old and new players in market. In meanwhile companies from Japan emerged as world-class players in Philips home turfs. Companies like Matsushita which manufactured at home but exported it products all over the globe taking benefit of the economies of scale. Furthermore R&D cost increased dramatically while product life cycle reduced thus reducing the time a company needed to recover its investment. Because to help make new product success mass production was needed to bring in economies of scale but shorter product life cycle limited this possibility as well.

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ORGANIZATION THEORY & DESIGNCase StudiesPHILIPS N.V (by Charles W.L.Hill)Question / Answers:1. How did the environment that Philips faced change during the 1960's and 1970's? What were the implications of those changes?Ans. Philips environment changed in 1960's and 1970's due to changes in trade and competitive aspects in global market. The first change was removal of trade barriers and new agreement and bodies like GATT and EC facilitated greater competitiveness and among old and new players in market. In meanwhile companies from Japan emerged as world-class players in Philips home turfs. Companies like Matsushita which manufactured at home but exported it products all over the globe taking benefit of the economies of scale. Furthermore R&D cost increased dramatically while product life cycle reduced thus reducing the time a company needed to recover its investment. Because to help make new product success mass production was needed to bring in economies of scale but shorter product life cycle limited this possibility as well. The implication of these changes was that previously Philips was more concentrated toward its local market through it national organizations but new global competitors with global strategy changed the market dynamics. For Philips the environment was rather simple and stable but upon entry of new player the environment became more complex and unstable. 2. What was the structure followed by Philips during 70's and 80's?Ans. The structure followe

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