ASSESSMENT 2: PHILIPS CASE STUDY ANALYSIS

Assessment 2: Philips Case Study Analysis 1

ASSESSMENT 2: PHILIPS CASE STUDY ANALYSIS

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Assessment 2: Philips Case Study Analysis 2

Question 1

Introduction

Philips is a leading Australian company in the production and distribution of electronics

products. It offers a wider variety of products, including video, audio, shavers, hair mother,

skincare and home lighting, child care, and other related products. Philips does not only operate

in Australia but also in other countries across the world. It operates in the manufacturing industry

with an enormous market share that has given it a competitive advantage over the years.

However, its success is based on its leadership. According to Schedlitzki and Edwards (2018,

considered participatory leadership is the excellent leadership style in its operations. In this

report, the drivers of change that caused Philips to move to a more participatory leadership is

discussed. The leadership style practiced at Philips in the past is also discussed and the style they

have moved towards in the current operations.

Innovation plays a critical role in organizations across the world. In order to achieve

innovation, the organization has to adopt the most relevant leadership style that allows it to

coordinate its employees towards achieving such goals. According to Jackson and Parry (2018,

Assessment 2: Philips Case Study Analysis 3

p.21), leadership skills for innovation are critical because they balance new idea exploration with

effective exploitation. At Philips, innovation has been a significant factor in improving its

products. For instance, Philips's workplace structure was seen to be dull as it made the

instilling values in the employees that could foster such innovation by reducing resistance. Chen

and Chang (2020, p.244) indicate that Philips required a more participative leadership style to

steer innovation by carefully evaluating risks and costs and the potential rewards accompanying

such innovations. Also, Jackson and Parry (2018, p.22) indicate that participative leadership

styles ensure that appropriate procedures and systems have established that successfully support

the launch of innovations. Therefore, by adopting participatory leadership approaches, Philips

saw that it could effectively launch and implement innovation.

Philips was also aware that an enduring innovation would require the alignment of its

marketing strategies with its research and development (R&D) activities. Through connecting

innovation directly with market demands, the company was able to raise the commercial success

Assessment 2: Philips Case Study Analysis 4

would be not only technologically better but also commercially viable. Bartlett and Ghoshal

(2013, p.219) observe that the problem for global companies is the handling of an idea pipeline

that fits local market needs as well as global standards. By giving their business units the power

describe how Philips exploited its numerous patents on DVD technology to form partnerships

and generate revenues through licensing. In a way, the company was able to reap the benefits of

its technological breakthroughs by securing the innovations through patents while at the same

time discouraging the rivals from copying. According to De Smidt (2013, p.59), this already IP-

centered strategy was merely one aspect of a larger corporate restructuring program which aimed

at changing the position of Philips as a knowledge- rather than a pure manufacturing-based

company. Philips had a major impact on the sector in the founding of patent pools that were very

significant in the setting of technical standards, thus the company was able to grab a considerable

Assessment 2: Philips Case Study Analysis 5

Philips's operational restructuring was also a major change that helped to promote a

culture of agility which in turn was beneficial to innovation. De Smidt (2013, p.65) outlines the

manner in which Philips cut down on its bureaucratic layers and gave the power to the teams to

administrative delays. Kanagal (2015, p.10) also points out that these institutional changes are

decisive in the process of converting inventive ideas into marketable products. Such a

determination went beyond just energizing the employee morale but also enabled these fresh

solutions to be itinerated at a quicker pace, which is very crucial when trying to maintain a place

in the rapidly changing industries. Therefore it was a definite signal that organizational design is

one of the main features that make the innovative behavior possible. It shows that the case of

Philips has moved further to become a proof of a theoretical point that the firm's structural

flexibility is a factor of its survival.

Besides structural and strategic changes, Philips also put a lot of money into the

development of a global mindset among its managers so that they could handle the innovation

Assessment 2: Philips Case Study Analysis 6

consumer markets. Wang and Liu (2013, p.174) need to say that global innovation can be

successful if companies set up the right mechanisms for sharing knowledge across different

subsidiaries. In the case of Philips, they set up the knowledge-sharing platforms in order to make

less integrated international operations.

required a strong commitment to sustainability and corporate responsibility if they wanted to

keep up with the modern market. As per Kanagal (2015, p.16), customers expect products that

take care of the environment and contribute to social causes, and this trend creates a great

opportunity for firms to come up with new ideas that match these expectations. Philips turned

around sustainability objectives the core of its product design process, focusing on energy-saving

technologies and materials that had a low environmental impact. De Smidt (2013, p.70) mentions

that this change had been a piece of a ideological plan to position Philips as a green innovation

leader. Such a vow elevated the company's branding not only but also attracted the backing of

Assessment 2: Philips Case Study Analysis 7

concept of sustainability into her innovative agenda, thus achieved making her development plan

geared towards the future and capable of withstanding any regulations and consumer trend

changes in favor of the environment.

Organizational culture is one of the drivers of change within an organization. On the

other hand, Participative leadership has a critical role in influencing corporate culture that

critically influences nongravitational performance. Lee, Chen, and Su (2020, p.95) indicate that

leadership is essential in an argentation because it develops a competitive and sustainable

emanates from the need to change organizational culture since leaders are the managers of

culture change within an organization. An effective leadership style guides managers within an

organization in influencing employees' attitudes, beliefs, and behaviors since they are ale to

position and shape the organization's culture. Therefore, the need to change its culture is a

leading factor that makes Philips adopt a participatory leadership style. This type of leadership

style has more influence in influencing the attitudes, beliefs, and employees' behavior, hence

deemed better imparting cultural change.

Assessment 2: Philips Case Study Analysis 8

responsive to the changes of the market outside. Wei, Samiee, and Lee (2014, p.53) maintain that

the companies which have organic and adaptive cultures are the ones more capable of responding

to those changes in customer demands and competitive pressures. Philips was dealing with a

that such changes generally lead to improved company performance as staff feel enabled to take

on personal responsibility in their jobs. With a culture that was more adaptable, Philips was able

to bring its performances to be in line with the needs of the industry that was always changing

thus making cultural reform a matter of strategical importance rather than one of optionality.

This change of culture turned out to be the vehicle of ongoing expansion and of organizational

capacity.

Embedding collaborations at the same time was no less important for Philips as a

company-wide cultural value with division all over the world. Sivalogathasan and Susantha

(2014, p.3) indicate that the establishment by the company of a culture dominated by teamwork

and open communication was like striking a golden vein for the semiconductor business in

Assessment 2: Philips Case Study Analysis 9

degree of market responsiveness as the decision-making process becomes more informed and

inclusive. Van Muijen (2013, p.127) refers to the statement that, among the employees, cultural

values that support collective action are those which enhance trust and give rise to better

manufacturing should be synchronized in order to create a system which is efficient and at the

same time, eliminates waste, that is, the system should be of those people who consider it their

responsibility to solve the problem together. With the continuous improvement as a part of the

culture, Philips established quality management in the eyes of the employees as a necessity in

their daily work rather than as a separate program. Tedla (2016, p.49) points out that the

performance sources will be more sustainable if the improvement activities are supported by the

cultural facet of the organization. A powerful improvement culture in organizations leads to

engagement and accountability which, according to Van Muijen (2013, p.118), are two very

Assessment 2: Philips Case Study Analysis 16

p.31), in which employees can keep up with the level of engagement is when they are in a

position to link their efforts directly to the rewards they will get. Philips went the extra mile to

ensure that recognition was not just about performance figures instead they celebrated

organizational initiatives. Philips was successful in using reward programs as one of the devices

in the cultural landscape that supported teamwork and continuous improvement activities. This

way, motivation was evenly distributed among different departments and not limited to specific

accomplished areas.

Leadership development programs were vital for Philips as the company needed to ensure

that motivation stayed high through the big changes. Leaders with emotional intelligence could

figure out employees' worries and handle the problem in the working place in a positive manner

(Choudhary, Naqshbandi, Philip & Kumar, 2017, p.1095). Emotions' recognition helped the

managers to keep up with the willingness even if the changes in the organization caused the

employees' doubts (Rehn & Abetti, 2013, p.116). In order to improve the skills of the leaders

Assessment 2: Philips Case Study Analysis 17

punitive. These skills also gave the opportunity to employees to voice their views without any

fear and thus they were more involved in the decision making process. Leaders, thus, were the

ones who made the team dynamics better by being the facilitators of engagement rather than the

work outputs were directly linked to the overall success of the company and its strategic

direction (de Jong, van der Poel & Wolfswinkel, 2017, p.395). By letting people know about this

coherence, they were made to feel more valuable as it was no longer a question of just carrying

out their routine duties (Horsthuis, 2014, p.34). When employees saw their work resulting in the

attainment of various competitive milestones by the company, their motivation was further

enhanced. The notion of 'organizational justice' helped in giving the employees a sense of

security by the goings-on as they were assured that the rewards received corresponded to the

effort put in (Choudhary, Deswal & Philip, 2014, p.9). Philips kept its staff informed about the

Assessment 2: Philips Case Study Analysis 18

perennial culture in the company but also the strategy became one of the major transformations.

The employees and hence the engagement became self-reinforcing when the employees

identified with the company’s vision and long-term objectives. Such a continuous alignment was

Employee engagement is critical in achieving better performance in an organization. At

Philips, employee engagement is deemed a central factor in its performance and corporate

attractive and comfortable for its employees. It also made attempts to redesign its environment

through redecoration, and workers could take coffee and frequently as they wished. This

approach is critical because, through participatory leadership, it has effectively allowed its

employees to remodel their workplace. As a result, it has made the employees more engaged at

all organizational levels and departments. Lee and Peterson (2000, p.407) indicate that a

participative leadership style allows employees to engage in decision-making, including how the

workplace structure works, increasing employee work outcomes, and influencing their behavior.

Therefore, Philips's participative leadership style has transformed its workplace from less

motivating and engaging to a more participative workplace. Thes employee is positively

Assessment 2: Philips Case Study Analysis 19

engaged in restructuring the workplace, allowing them to engage with one another by sharing

coffee and interacting and supporting each other during work time.

Employee engagement at Philips was enhanced even more when they introduced digital

p.118). Workers will be more energized when they recognize that their contribution is the driving

force to the workplace changes which benefit everyone. Through this method, engagement has

connected systems. Therefore, digitalization has enabled Philips to become a company that is

more transparent and accountable. Workers feel closer to the organization when their ideas are

converted into visible changes in the organization. Gradually, this feedback-oriented culture has

augmented trust between management and the workforce (Philip & Mani, 2017, p.302; Lager &

Milojkovic, 2018, p.120). Evidently, Philips converted employee engagement into a practical,

measurable strategy that is indicators of corporate performance. With this makeover, the culture

has strengthened and the employee commitment has flown through the different departments.

One of the big changes, besides that, at Philips is the gathering of emotion sensing

technologies for monitoring the well-being and engagement of the employees. Tools like this

provide managers with the first signs of the changes in the stress patterns of the workforce and

make the interventions before the problems become bigger (Whelan et al., 2018, p.8).

Organizations that are responsive to the emotional needs of employees earn a positive response

Assessment 2: Philips Case Study Analysis 20

from them (Lakshmi & Sohail, 2013, p.12510). Philips utilizes the data to bring the focus to the

teams that need support or acknowledgment. Action plans are developed to take the morale issue

down to the core and thus engagement will be upraised. This procedure is most successful in the

Sohail, 2013, p.12512; Whelan et al., 2018, p.10).

factor for the engagement that is particularly sustained among the younger employees. The fact

that the Millennials are always connected, which leads to indistinct work boundaries, is one of

the reasons why they represent a large share of the workforce. (Philip, Najmi, Orudzheva &

Struckell, 2017, p.83). In order to respond to this trend, the company has implemented some

steps such as limiting after-hours communication with the goal that everyone can have their own

personal time for recovery and rest. These steps taken by the company are a way of recognizing

that disengagement is brought about by overwork for long hours. The employees who set

boundaries between work and personal life in a healthier way speak of higher job satisfaction

Assessment 2: Philips Case Study Analysis 21

the overall workplace morale is high. These activities done at the workplace to take care of the

employees' holistic well-being are strongly supported by the employees that then see them as

ways in which Philips values their wellbeing (Philip et al., 2017, p.85). Such measures, in the

Question 2

The issues indicated to have faced Philips in the past point to the problems and

require people to follow regulations and rules to accomplish objectives and goals on time or

move supplies and people in an organized way. It is a typical characteristic of what was

happening at Philips in the past. According to the case description, supervisors acted as overseas

who controlled the workers. The poor performance likely experienced because the transactional

leader makes the workplace dull and unsuitable for transformation. The type of leadership style

Assessment 2: Philips Case Study Analysis 22

people in an organized way. For instance, specific work structures such as employees repetitively

working in cycles without the freedom to move about as the line's pace were determined.

Workers had to do on particular radio parts in seconds before passing it to the next employee.

lines, which are less innovative, becoming significant sources of dissatisfaction among

employees. Unlike modern production lines where leaders encourage innovation, allowing

components repeatedly, making the work tedious and boring. It is a characteristic of leadership in

operations rigid in implementing innovation. The other aspect that characterizes the transactional

leadership style is that the transaction leadership style encourages passive management or

supervision by exception. Supervisors do not interfere with the departments' workflow unless

when an issue arises (Tun, 2016, p.67). It was a characteristic at Philips because supervisors did

not participate in the process. For instance, it is indicated that supervisors at Philips only played a

role in controlling the employees in the various assembly lines.

Transactional leadership styles are about providing what is required and anticipating

frustrating results. Transactional leadership theory explains that managers in an organization give

the employees what they need to accomplish their work and, in return, managers (Tung, 2016,

p.70). Tung (2016, p.70) posits that this type of leadership creates an environment where

employees are not self-motivated, which requires instructions and a structure and monitoring to

Assessment 2: Philips Case Study Analysis 23

guide them in completing the work as needed and on time. It is an aspect evident in Philips's past

since employees are provided with instructions and guidelines to follow. If one fails to

accomplish their tasks as required, another employee in the line has to correct it. It is also

Transactional leadership at Philips also resulted in a company culture that was very

structured and where adherence to rules was highly valued, while the creative aspect of the work

the generation of new ideas or the simplification of the production process (De Smidt, 2013,

p.61). Such a managerial approach was functional in sustaining a uniform quality of the products

across the massive production, however, it slowly stifled the vitality of the company. Over time,

the enterprise was gradually getting reliant on the highly regulative procedures that had their

limits when it came to adaptability to the rapidly changing market dynamics. As Kanagal (2015,

p.3) puts it, 'firms that choose to neglect innovation in favor of efficiency eventually face the

problem of survival in the competitive market.' Philips had to face the same problems which

were the consequence of its production lines not meeting the requirements that allowed them to

Assessment 2: Philips Case Study Analysis 24

by, the emphasis on the compliance that was so inflexible led to a decrease in employee morale

and participation. In the process, the company culture has changed into one of mistrust towards

the management rather than one of trial and acceptance, which has led to the slowing down of

cultural transformation needs of Philips. van Muijen (2013, p.120) states that organizational

culture changes most effectively when leaders actively promote and live the shared values

employees voices were that they felt very alienated from the corporate goals, and had no feeling

of a common cause. The model’s over-reliance on the use of punishment or corrective action for

non-compliance escalated the conflict between management and labor (Ahmad, 2013, p.48). This

difficult relation between the employer and the employees resulted in the resistance when the

management attempted to introduce changes at work. The transactional framework did not allow

for the existence of communication in both directions, which is very important for gaining trust

in times of change. Sivalogathasan and Susantha (2014, p.7) argue that disengagement is the

result when employees are not included in shaping organizational practices. Philips’ case was the

Assessment 2: Philips Case Study Analysis 25

Philips realized that the transactional leadership that existed in the past was not working

and decided to adopt a participatory leadership style that could allow employees to improve their

poor labor relations, the unsettled workforce with low morale, and inadequate quality control.

over the employees. He functions as a facilitator in the departments. It is an aspect evident in

Philips's case since the leadership style allowed the employees to operate with high autonomy

levels, where the engineers only played a role of aiding them in the remodeling of their

workplace. Employees participated more in the workplace restructuring by redesigning the

machinery and while others innovated the production process while supervisors only facilitated

the process.

The participative leadership approach is evident at Philips because of how things work in

Assessment 2: Philips Case Study Analysis 32

Wei, Y., Samiee, S. and Lee, R.P., 2014. The influence of organic organizational cultures,

market responsiveness, and product strategy on firm performance in an emerging

market. Journal of the Academy of Marketing Science, 42(1), pp.49-70.