Global Strategy of ZAK-Squared - Case Study Example

 Global Strategy of ZAK-Squared As ZAK-Squared’s strategies look toward other global companies, the most aligned company thus far is with how 3M innovation’s and technologies are in line with the philosophy of ZAK-Square: “bringing together: the synergy of software and human power, strategic information and enterprise decision-makers, technology, creativity, productivity and the best minds from leading academic institutions”, this is in direct line with what 3M’s philosophy and their historical innovations. 3M used a Multi-Domestic Mode of organization. This is denoted by decentralized decision making. 3M used a “grow and divide” philosophy. As divisions would grow to a certain size, it was more productive to divide that division so each smaller division could focus on a specific market and grow the individual divisions at a greater rate. Individual business division managers could analyze their market, make local decisions based on their analysis and funnel this information up to the corporate level. These divisions could also gear their business to their environment and its demands. Throughout the history of 3M, communication was of the utmost importance. At all levels of management as well as front line workers, there were a number opportunities such as retreats, councils, The Annual Technology Fair, as well as internal encouragement to maintain contact with other division employees. This mode of organization forced 3M to restructure time and time again. Breaking apart divisions and redefining policies and procedures. The Technical Council (numbering 80 people by early 1990) allowed the heads of its increasingly dispersed labs to meet on a regular basis. This was encompassed from the workings of the Technical Forum that was created in the early 1950s that was formed by “senators” that were drawn from the practicing scientists and technologies in each of the 80 3M US-based lbs. One of the most important roles was to represent the concerns of the scientific community to top management, as well as managing the number of specialized “chapters” who purpose was to allow researchers from diverse operations but with similar special interests to hold seminars with speakers discussing scientific specialties. This Council and Forum is part of the “grow and divide” philosophy. 3M’s multi-domestic mode provides alignment with its design for organizational learning as when 3M grew so did its knowledge of what it could handle with respect to managing operations. During the 1960s it was apparent that as these divisions reached their optimum size and could no longer be effective and that the president could no longer manage directly, the company decided to cluster divisions with related products and markets into groups. This “grow and divide” concept had management expecting this type of hierarchy of organizational units to evolve organically; thus, promising product development projects would then grow into department and successful departments would then be spun off these divisions and then large divisions would become the basis for new groups. This would allow the philosophy to provide each successor in the company to set stretching growth and performance targets to drive performance in their divisions. 3M's balance of the three challenges As 3M’s ability to introduce new technologies and improvements on technologies has always been in seeking out or being sought out by local talent, they are extremely well adept at meeting the challenge of emphasizing local responsiveness and thus minimizing the costs has always been through addressing customer needs by listening to their expectations. Through addressing the customer’s needs or their frustrations at the products they are using for their current needs, 3M has always been ahead of the competition by creating new products to fulfill current customer needs. 3M achieves variation, selection, and retention The early philosophy of 3M was to “encourage those with good ideas to pursue them, not only because niche markets were profitable, but also because many products and technologies subsequently found applications never dreamed of.” (3M case study p. 4) The variation on this philosophy occurred in the 1980s where the company was overhauled to change the operational structure where now “whenever an issue arises now, we create teams.” (3M Case Study, p 12) As 3M faced a 14% annual growth in both sales and earnings during the 1970s, in the first half of the 1980s the average annual sales growth fell to 5% whle net income remained essentially flat from 1980 to 1985. A worldwide recession, a stubbornly overvalued dollar and a major challenge by foreign competitors (particularly from Japan) all contributed to the problem. (3M Case Study, p 10) This type of retention of the level of sales once experienced by 3M could only be envisioned through an increase in productivity and competitiveness that the new president of 3M’s US operations, Jacobson, had initiated a program that he dubbed “J35” – the J stood for Jake and 35 stood for his five year target percentage reduction in manufacturing labor content and the manufacturing cycle time – these targets were met when he became CEO the following year. (3M Case Study, p 11) One of the many challenges that 3M faces is the need to recognize their own growth and development improvements and as such created, through a corporate initiative, the “pacing program [wherein] each division was asked to identify the handful of development programs that could ‘make a major difference’ in terms of volume impact, or could ‘change the basis of competition’ for their business.” (3M Case Study, p 13) The factors that would be identified for 100 or so new product and process programs were required in order to even obtain both funding and management attention. There were many priorities that Jacobson would base funding for new programs on which included focusing on: customers and markets, impact and performance. Each of these priorities were important for different reasons. It was important that the company’s technological capabilities did not overwhelm its customer sensitivity and market focus and emphasized quality defined by meeting customer expectations, but, attached a 35% reduction in the cost of production quality and added the J35 target for 1990. Impact and performance measures were based on comparing annual sales growth to the average earnings per share. On the J35 productivity targets, the company had achieved a 35% reduction in labor content, a 40% drop in the cost of quality and a 21% cut in manufacturing cycle time over Jacobson’s five year tenure. (3M Case Study, p 13) 3M and the initiative-cooperation frontier Although the new president since 1992, DeSimone, still hold the old 3M model of the culture of innovation and respect for the individual is still central. “Management knows it should trust the process of bottom-up innovation by leaving a crack open when someone is insistent that a blocked project has potential. The lower levels have to trust the top when management intervenes or controls their activities which is dependant on good communication. 3M’s job is really one of creation and destruction – supporting initiative while breaking down bureaucracy and cynicism and its also one of balancing freedom and control” (3M Case Study, p 15) Read More