Philips NV Failure in Strategic Change LeadershipIntroduction Phillips NV has brushed with failure severally in the last three decades, at one point even come to the blink of utter ruin. The case of Phillips is indicative not only of a company trying to survive, but also of a company given to a trend of doing too little too late. Globalization has wrecked the final blow to Phillips NV creating the kind of competition that Phillips has never prepared for. In this short essay, the discussion will introduce the initial days that saw the Dutch company established as a global electronics giant, beginning with a humble launch in 1891, and onwards for several years of prolific growth.
The paper then proceeds to argue companies cannot thrive in a competitive market as the one in which Phillips is in today, without being immensely adaptive to market changes. In this argument the paper projects a thesis that companies will only last to the future they can envision beforehand, and no more. Once the organization foresees its future, it becomes easy to induce strategic change in such a way that they can remain relevant to the market needs, challenges and demands.
As Christensen and Overdorf (2000) notes, the main task of organization leaders today is to lead to the future and not to cruise through time. This explains why Philips NV was once a global leader in the electronics industry but has today been overtaken by smaller establishments due to lack of strategic change leadership. Philips never envisioned change and has never tried to adopt any strategic change initiative. Even today it seems, Phillips always try to cope with the change when such change ensues. The argument projected herein is based on numerous theories as posted by the available literature.
Scholars of organization management, especially those biased towards the role and demands of strategic change leadership, attest to the fact that Philips has suffered the fate of a company whose four generations leaders have lacked strategic change management initiatives. The electronics industry change overnight, with new innovations, novel products and pace-setting technologies being introduced faster than in any other industry known to man. There is no way that a company resistant to change can survive in such an industry.
As would be expected this paper makes some biased recommendations in line with where the company has failed in the past, strategic change management. While every company in modern times is mandated to envision and strategize on the future and to prepare structurally and operationally for that future, it is even more important in the electronic business (Dooley, 1997). How Philips NV Failed in Strategic Change LeadershipPhilips’ brand name remains an enigma in the minds of electronics consumers even today.
It had for a time gained the market presence and dominance that very few electronics companies, but for IBM and Sony, have ever had. Its four main divisions, lighting appliances, professional products (personal computers), consumer electronics (i. e. medical equipment) and electronic components (i. e. micro-chips) had gained an impressive market penetration rate. Phillips was a formidable competition to General Electric, Sony, Matsushita and Siemens at that time, rolling out to conquer a global market. Philips NV had by the 80’s established over 300 subsidiaries across 60 nations of the world, employing over 300,000 professionals.