PHILIPS ELECTRONIC COMPANYIntroductionBusiness has entered the era of the one-world market. Increasingly, companies are going overseas to attain sales and profits unavailable to them in their home markets. As a result, every firm, including those with purely domestic operations, is facing increased pressure from foreign competitors. (Bessant, J, R 2001)History of PhilipsGerard Philips and his father started it in the year 1892 as a small light-bulb factory in Holland at a place called Eindhoven. Their venture almost failed at the early stage of its operation hence they recruited Anton, Gerard’s brother, who was an exceptional manager and salesman.
Philips under new management became the third largest light-bulb producer in Europe in the year 1900. Since the time it was formed it developed a custom of compassionate for its workers. It built many company houses in Eindhoven, promoted education level in the area through sponsorship and it paid its employees so well that other local firms rose complains about these incentives it gave to its employees. Philips went steps further to set 10% of profits aside for its employees in 1912 when it was incorporated.
(Bartlett et al, R 2008)Environmental effect on development of PhilipsIn organizational development, environment is the sum of all forces surrounding and influencing the life and development of the firm. These forces can be classified as external or internal. (Bessant, J, R 2001) Moreover management has no direct control over them, though it can exerts influences such as lobbying for a change in a law, heavily promoting a new product that requires a change in a cultural attitude. The external forces are uncontrollable forces. Internal factorsThese are the controllable forces or elements that the management must administer in order to adapt to changes in the uncontrollable environment variables.
They include factors of production (capital, raw materials and people) and the activities of the organization (personnel, finance, production and marketing). In the case study of Philips shared responsibilities and competitive leadership were the cornerstones customs for both commercial and technical functions. The management, that is Gerard (an engineer) and Anton (businessman) began a healthy competition whereby Gerard tried to produce more than Anton could sell and sometimes Anton will want to sell more than what Gerald could be able to produce.
(Bartlett et al, R 2008) On the other hand, they came to agree that strong market research was vital to Philips’ survival. The company grew to become a leader in industrial research, which led to creation of labs to undertake production problems. It was from this research where a tungsten metal filament bulb was developed and was a great success since it gave Philips the financial strength to compete against its giant rivals. External factorsThe external forces are uncontrollable forces and consists the following; (Bessant, J, R 2001)Competition –at its first stage Philips faced stiff competition from its competitors both within and beyond the borders.
Majority of which mimicked the legendary operation of Philips two brothers. Most of Philips’ competitors moved production of electronics to new facilities in low-wage areas in East Asia and Central and South America. (Bartlett et al, R 2008)