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Change Initiative Assessment
BMAL 504 – Leading Organizational Change
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Change Initiative Assessment-Part A
For companies to continue their operations, productions, and successful outcomes they
must undergo or experience some type of transformation, regardless of how it impacts the
company. However, experiencing these transformations is not where the company reaps the
benefit from the experience, it is how they adjust or adapt to the change. According to Furxhi
(2021), companies may experience changes such as reduced or increased staging as well as the
decline or expansion of the business. Heinz, (2022) added, “middle managers play a key role in
organizational change” (p.400). There are many specific types of changes that companies might
experience such as a merger, an acquisition, launching a new product, or rebranding. These
changes are significant and normally made to increase the company’s place in their particular
field.
Unfortunately, companies that transition through changes may face opposition from
within the organization, exterior factors, and regulations. However, to grow and become highly
competitive, change must be a crucial aspect of the company (Hussain et al., 2018). In this
report, a review of the change initiatives of George Eastman’s Kodak Company will be analyzed
with recommendations provided.
Definition of Case
In 1880, an already successful entrepreneur, George Eastman formed a partnership with
Henry Strong and established the Eastman Dry Plate Company. After a successful and growing
start Eastman and Strong along with 14 shareowners formed the Eastman Dry Plate and Film
Company in 1884 later becoming the Eastman Company in 1889. Since 1892, the company has
been known as the Eastman Kodak Company. Eastman Kodak (Kodak) manufactures and sells
photography, packaging, printing, and software products and services. The leadership includes
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13 members of the Executive Leadership Team and three members of the Senior Leadership
Team. The current Executive Chair and Chief Executive Officer is James V. Continenza (Kodak,
2024).
Kodak, a market leader in the 20th century made its mark by their production of portable
cameras, photo film, and accessories. Kodak also manufactured videography equipment for use
in movie productions. This dominance lasted through the early part of the 21st century. To date,
Kodak has marketed the industry by earning over 79,000 worldwide patents spanning 130 years.
Notable inventions are the Kodachrome and Kodak Instamatic camera. However, in 1975 a
Kodak engineer, Steve Sasson, invented the digital camera, which was “a bulky machine that
was able to record B&W images onto a cassette tape” (Vickery, 2020, p. 27). This push was
under a new strategic plan and goals to invent more products and provide more services for its
customers and with these inventions and patents, Kodak strengthened its word-leading
dominance.
Although Kodak was flourishing in the market, the development of a new business model
brought in huge revenue for the company. Kodak identified a product to sell at a minimum profit,
however, all the accessories for the product sold at a higher profit margin recouped the minimum
gained from the product while still earning a huge profit. Unfortunately, the model had questions
about its sustainability within the market's growth. According to Roychowdhury, (2019) with
new technical advances in the photography and film industry, the previous methods of printing
sheet and film were becoming outdated. For example, the invention of the digital camera by
Steve Sasson. His invention was not the primary concern of Kodak as management dismissed the
idea due to their status in the market at the time, which was substantial. Kodak management
could not see the potential growth of digital photography. Because of this lack of innovation on
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the management team at Kodak, according to Vickery, (2020) competitors such as Nikon and
Canon were dominant in the production of the digital camera. Fuji Film, another competitor, also
began producing and selling their version of the digital camera, while Kodak still focused on
film. Unfortunately, the digital camera did not take off as quickly allowing Kodak to maintain its
dominance in the market.
Because of its’ bias towards competitors, Kodak did not respond to the digital camera
move for almost 10+ years during the initial production by Fuji Film. Kodak believed that
loyalty of their customers as an American company and the ability to hold their image would
keep them buying the Kodak brand. Kodak ignored every sign from the market and its
competitors and chose not to move to digital camera production. Although Kodak attempted to
join the digital camera market in the mid-nineties, it was a little too late to match their
competitors and maintain their edge in the market. As with any public shared company, the
investors were looking for signs that the company was making decisions to grow and be
profitable. Unfortunately, Kodak investors did not find Kodak’s unresponsiveness to the digital
camera surge and growth as a sign of growth and profitability for the company, hence the move
to pull their investments and support.
According to Heinz (2022), change or the lack of change can cause conflict among
management and stakeholders. Innovation in the photography market made kodak the traditional
company and products. Although, this growth in the digital market seems to be knowledge
among the photography market, Kodak marketing team was unable to convince management to
change the way they thought about the digital market and adapt in order to remain relevant and
sustainable. The fall was soon to start as Kodak management began to invest in strategies that
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were not proven to be profitable. Investing time and money in strategies other than starting the
marketing and production of a digital product to match what their competitors were deploying.
Unfortunately, Kodak was unable to gain traction in the digital camera market by the turn of the
century. Kodak had to contend with more than just the expanding digital camera market. With an
increasing number of innovative technologies and other creative ideas starting to emerge Kodak
discontinued all digital camera manufacturing, marketing, and sales in 2004 (Mui, 2012). Due to
poor business choices, yearly revenue declines, and loss of assets, Kodak filed for bankruptcy
under Chapter 11 of the Bankruptcy Code in January 2012 (Mui, 2012).
Analysis and Recommendations for Change: Part Two
Unlike its competitors in the photography and videography market, Kodak experienced
conflict from within that resulted in the inability to maintain its world-leading status in the
industry. Analyzing the potential cause of the challenges that were presented in Kodak’s case,
the structure of its organization and management played a key role in its downfall. According to
Iranmanesh, et al. (2021), organizational structure could contribute to innovations and effective
decision-making that could ensure a company is competitive and successful. Kodak’s traditional
organizational structure presented characteristics of corporate inconsistency. Flieger, (2020)
explains corporate consistency as the ability to practice what one preaches, which suggests
behaviors should align with words and be versatile enough to adapt to distinct phases in an
organization's life cycle.” The traditional organizational structure in Kodak was that of different
departments created based on their role and areas of responsibility in the company. Each
department or area of expertise is led by the leader who managed the team to the goals and
objectives of the company. Unfortunately, this process had its flaws due to a lack of autonomy
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and say when it came to the production and release of a product, which hindered Kodak’s ability
to grow.
Flieger, (2020) recognizes that traditional organizational structures provide managers the
internal consistency they desire and the freedom to work in their roles and responsibilities.
However, it is common to make uninformed decisions in times when determining the preferences
and desires of clients. Therefore, organizations operating in traditional structures should avoid
restricting their consistency within the organization. Kodak failed to recognize the needs and
desires of their customers as it related to the digital camera. They were unable to transfer the
consistency external.
The leadership in charge of managing, developing, and establishing Kodak as a continued
world leader failed the organization in their decision to not move into the mass production of the
digital camera. Kodak management garnished tremendous success from their early decisions of
the production of the traditional camera and paper film. Because of their early success,
implementing changes that went against the normal production was difficult for them to grasp.
Unfortunately, the same consistency they used in the early years where they marketed the
traditional camera and film and had success, was not present during this transitional period of the
digital camera. The decision made by Kodak management implies that leadership was
unmotivated to change based on the trend. The organizational change needed required Kodak
leadership to change the culture of how they operated and managed their processes as well as
revisiting the way the organization was structured.
Flieger, (2020) suggests when faced with consistency opportunities, organizations should
move to a hybrid structure which is the combination of the traditional and process approaches to
organizational structures that work together simultaneously. In Kodak’s case, the functional
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departments would be the same, however, processes would flow through them, by doing so, they
would have a functional manager and a process owner. This would ensure internal and external
consistency.
At the time when Kodak decided to make a change to add digital cameras to their
manufacturing portfolio, it required them to make decisions that were unfavorable and led to
other financial challenges. Kodak began to acquire smaller companies with the hope of
increasing revenue and shares, unfortunately, the smaller subsidiaries were depleting the
financial resources of Kodak causing Kodak to fall further in their profits.
Course Concepts
According to Heinz, (2022), “confidence in and commitment to change, and
experimentation with different options, can be encouraged by having access to the right financial
and human resources” (p. 326). Kodak’s fall was related to management's lack of commitment
and confidence to change. Lucas and Goh, (2009) identified what happened to Kodak as a
disruptive technology that impacted the sales of traditional cameras and film. Kodak's
management was presented an opportunity to produce a product that could have a lasting impact
on the growth of the company and the market by moving forward with the production of the
patented digital camera. Although all the market research and analysis showed trends that
consumers were desiring the digital camera, Kodak management was still unwilling to make the
change.
There are frameworks of change management that could have resolved some of Kodak's
opportunities. Heinz, (2022) identified Lewin’s three-stage change model as one of the best.
However, using this model requires the change manager to ensure the people are unhappy by
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using positive dissatisfaction to convince them of the need to change. The three stages of this
model are unfreeze, move, and refreeze.
According to Hussain et al., (2018), organizational change in many cases is planned,
therefore requiring the system to be unfreezed. By unfreezing, Kodak’s leadership would have
had to become aware of the trend and acknowledge what would happen if a change was not
made. The marketing approach at this stage would have been different. Marketing needed to
change the attitudes of management by making them feel uncomfortable about how things are
going, and the company could perform better. This is the start of the process of establishing a
motive to change. Secondly, the move phase takes place after there is a motive to change. Once
secured, the production of the digital camera would have started, and the sustainability and
market dominance would have continued. The stage in this process is the refreeze. By refreezing,
Kodak secures the mass production of the product and implements the necessary policies and
procedures to maintain the production and sale of the product. Heinz, (2022) highlights an
important part of this process in the change managers' ability is to anticipate employees’
reactions.
Recommendations for Implementing and Sustaining Change
By implementing the change model previously mentioned, Kodak and its management
team can be successful in implementing any organizational change. The following
recommendations will outline the steps that Kodak should take to ensure the fall of 2004 and the
bankruptcy of 2012 will not happen again.
Kodak should first complete a Strategic Inventory. This inventory provides an in-depth
analysis of the company’s actual strengths and weaknesses, whereas the popular SWOT analysis
provides results that are perceived (Heinz, 2022). By doing a strategic inventory, Kodak will also
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have a better understanding of the changes that should be made and those that are necessary to
implement and drive company goals.
After completing the strategic inventory and before making any organizational changes
Kodak should complete a Readiness for Change analysis on any potential changes. This analysis
assesses organizational and individual readiness for a given change and identifies the pre-work
needed to implement the change. Heinz, (2022) notes that if the readiness is low, organizational
leaders must create some type of remedial action to strengthen change receptiveness and
readiness. Dutta (2018) acknowledges that an organizationHmust maintain certain elements of
theHorganization, culture, and strategy while adjusting or reorganizing others forHa change to take
effect.
The final recommendation is for Kodak to create an environment that encourages
teamwork, asks for feedback from employees in all layers of the company, and establishes
internal communication channels where ideas for innovative products andHprocedures canHbe
exchanged (Kotter et al., 2021). When employees feel they have a voice in an organizational
change, it creates a sense of ownership and motivation for the employee to perform at a
prominent level.
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References
Dutta, S. K. (2018). Strategic change and transformation: Managing renewal in organisations
(1st;1; ed.). Routledge. https://doi.org/10.4324/9781351269247
Kodak. (2024). Kodak reports 2023 financial results. Retrieved from
https://www.kodak.com/en/company/press-releases/
Flieger, M. (2020). Consistency concept in different organizational structures: Functional,
process and hybrid. Scientific Journal of the Military University of Land Forces, 197(3),
677-687. https://doi.org/10.5604/01.3001.0014.3961
Kotter, J., Akhtar, V., & Gupta, G. (2021). Overcoming obstacles to successful culture change.
MIT Sloan Management Review, 62(4), 1-3.
Mui, C. (2012, February 18). How Kodak failed. Forbes.
https://www.forbes.com/sites/chunkamui/2012/01/18/how-kodak-failed/?
sh=735732cf6f27
Furxhi, G. (2021). Employees’ resistance and organizational change factors. European Journal
of Business & Management Research, 6(2):30-32. Retrieved from
https://www.ejbmr.org/index.php/ejbmr/article/view/759.
Heinz, A. (2022). Liberty University: Leading organizational change. New York: McGraw Hill
Hussain, S. T., Lei, S., Akram, T., Haider, M. J., Hussain, S. H., & Ali, M. (2018). Kurt lewin's
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organizational change. Journal of Innovation & Knowledge, 3(3), 123-127.
https://doi.org/10.1016/j.jik.2016.07.002
Iranmanesh, M., Kumar, K. M., Foroughi, B., Mavi, R. K., & Min, N. H. (2021). The impacts of
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Innovative culture as moderator. Review of Managerial Science, 15(7), 1885-1911.
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Lucas, H. C., & Goh, J. M. (2009). Disruptive technology: How kodak missed the digital
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https://www.researchgate.net/publication/336613727_A_case_study_on_kodak_
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