|Running head: PROFILE OF A STRUGGLING COMPANY: MOTOROLA|
|PROFILE OF A STRUGGLING COMPANY: MOTOROLA||9|
Final Project Two – Milestone Two: Profile of a Struggling Company
Chosen Company: Motorola
Dr. Bekim Belica
OL-215 Principles of Management
Southern New Hampshire University
April 25, 2021
Motorola was founded in 1928 by Illinois native Paul Galvin. Initially known as Galvin Manufacturing Corporation, the company was built by Galvin and his brother, Joe, and held offices throughout Chicago. Motorola made a breakthrough in “commercializing the first mass-market car radio by figuring out how to eliminate static interference from under the hood” (Fishman, 2014). Motorola invented the protocols and technologies applied towards improving mobile communications and gave way for the first mobile phone and base station (Motorola, 2020). Although Motorola encourages creativity and spirit from their employees, the company has been struggling in terms of lower profitability and lack of execution and innovation when reaching out to their audiences (Anderson, 2008).
Profile: Current Management Planning
Google decided to buy Motorola but eventually sold the company to Lenovo, leading to corporate-related tensions in the workplace (Fishman, 2014). Motorola is looked over by 10 executive leaders who share affiliations with Lenovo. The company’s management fostered a strong corporate culture that lowered commitment and motivation among employees. Because of this, the work environment gave way for lower innovation and a lack of overall growth for the company. Due to the bankruptcy of Iridium, a satellite system financed by Motorola, and the company splitting into two (mobility and solutions), Motorola’s company value decreased drastically (Fishman, 2014). The company resorted to selling off businesses and focusing on their core markets, rather than fixing their leadership structure and not overspending profits (Hartung, 2014). The company also dealt with layoffs as their workforce reduced by 84 percent in 2014 (Fishman, 2014).
As communicating through mobile devices became more accessible and convenient worldwide, Motorola dealt with competition from other mobile companies, including Apple and Nokia, regarding phone models developed with the most innovative features for users. I think the company should have acted by developing features for their specific models, rather than using innovation and revenue towards bettering other businesses. Motorola should adhere to Michael Porter’s Five-Forces Analysis of Market Structure as it “attempts to analyze the attractiveness of an industry by considering five forces within a market”, with the forces comprising of barriers to entry and the threat of potential new entrants, buyer power, supplier power, threat from substitutes, and rivalry among industry competitors (Carpenter et al., 2013). Without acknowledging these components, Motorola would be ineffectively managed and unable to adapt towards using modern approaches and alternatives.
Profile: Employees’ Perception and Culture
Motorola paved the way for mobile communication by inventing the first cellular phone in the early 1970s. Before developing the notorious Razr phone that brought popularity during the early 2000s, the company’s first cellular phones were applied towards improving law enforcement (Fishman, 2014). Although their cellular business surged by using the model DynaTAC, the company’s corporate culture gave way for unethical practices from employees. For instance, tensions arose among employees as workers involved with selling headsets to police officers and firefighters “lavished riches” as a division, such as using bonuses to buy luxury cars; the division outwardly considered money as a priority during a celebratory party (Fishman, 2014). Former Motorola executive, Mike DiNanno stated that top management “believed in letting the sector guys run business their way”, eventually leading to “no cohesive plan for network technology and handset technology. The two operated totally independently, in totally different directions” (Fishman, 2014).
Motorola strives to “invent, build and deliver the best mobile devices on the planet, improving the lives of millions of people” by enabling their phones to run on Android (Motorola, 2020). When their Razr phone brought greater revenue for the company, the phone model incorporated different features based on the phone carrier (Fishman, 2014). It was the competition towards applying more advanced features and options to phones that eventually brought the downfall for Motorola’s popularity. In 2005, the company collaborated with Apple to make a Motorola iTunes phone called Rokr, which was the first phone that connected to Apple’s music store; however, the collaboration ended up giving Apple more innovation towards creating the first iPhone in 2007, whereas Motorola still sold Razrs (Fishman, 2014). The layoffs that took place within the company pulled back advancements and led to poor execution regarding their phone models (Anderson, 2008).
After the outcomes from collaborating with Apple, then CEO Ed Zander shifted the blame on a supplier for Motorola by claiming it “[caused] the company to miss nearly a year in the product cycle” (Fishman, 2014). Fishman highlights that Zander did not engage with China the way the Galvins did as the company discounted their outdated features to preserve market share instead of following suit with China’s newer data networks. In 2008, co-CEO Sanjay Jha evaluated Motorola’s operating systems to determine ways to develop smartphones that rivaled Apple’s iPhones (Fishman, 2014). After 4,000 more jobs were cut off in 2009, Jha and Iqbal Arshad, who assisted with assembling Nokia’s Symbian smartphone system into Motorola phones, decided to develop a phone that was built on Android called Droid (Fishman, 2014). This collaboration with Google’s operating system gave way for the company to sell products throughout mobile retailers that competed with Apple products, such as the Moto E smartphone and Moto 360 smartwatch.
Management Plan Recommendations: Implemented and Communicated
To prevent layoffs and lower profitability, Motorola should have prioritized on resolving conflicts within the business, rather than selling to other businesses. For instance, the company should have taken greater measures to develop phone models that give way for more innovative features, rather than relying on the distribution of Razrs to their audiences. Nodding to Hartung’s article regarding Motorola’s decrease in relevancy, the company should have invested more in innovation and not overspent on outdated materials and approaches when manufacturing phones.
Likewise, the leaders behind Motorola should have communicated more effectively to all employees pertaining to selling off to other businesses, splitting the company into two, and holding layoffs. It is crucial for managers to provide support for employees during times of change in the workplace. Motorola could have shown more emotional and instrumental support to internal and external audiences by expressing confidence in employees’ abilities or providing a training program to help employees feel more adjusted to new systems (Carpenter et al., 2013).
Management Plan Recommendations: Sustained and Monitored
Motorola’s downfall was rooted in how their management acted on behalf of the company. The decisions to sell off to other businesses and the overall lack of innovation from layoffs gave way for a lack of growth and execution. For instance, Motorola should have been more engaged with other businesses globally, including China, as it would have brought improvements for the company’s phone models and allowed them to follow suit with newer trends (Fishman, 2014). I recommend Motorola’s management to take greater consideration towards potential obstacles regarding ties with other businesses and the development of products. This can enable them to take more initiative on how to resolve conflicts and be more adapted to technological advancements over time.
I also recommend Motorola to better monitor the revenue from their products and analyze the demographics and number of purchases made from their audiences. By doing so, it would give greater insight in how the company differs from other phone companies and what is expected by the public. The company could also observe how other businesses develop products and reach out to the public so that they can provide goods that consist of different, yet more convenient, features. To better compete with other businesses, Motorola should establish software and content, in addition to smartphones and smartwatches, to effectively focus on their customers and their specific needs.
Management Plan Recommendations: Increased Employee Performance
To develop products that bear distinction from other phone or technological businesses, Motorola needs to ensure higher work productivity and motivation from their employees. I recommend the company to communicate more effectively to both internal and external audiences and allow them to share their voice in how to better the company, rather than only having top management take initiative. Likewise, Motorola’s management needs to set a better example for the company, such as prioritizing customers over profit gain or welcoming creativity from employees when coming up with ideas for their products. Furthermore, Motorola can expect increased employee performance if the work environment gives way for open-mindedness and innovation that gives way for company growth. Executing well to their audiences can also allow Motorola to branch out to customers as it can uphold a “seamless mobility” lifestyle among their product groups (Anderson, 2008).
Management Plan Recommendation: Decision Making
Motorola can improve their work environment and execution by establishing decision-making skills that overall benefit the company. By following the rational decision-making model, the company can acknowledge alternatives to better develop products that meet the criteria towards incorporating the most innovative, convenient features. The company can show long-term success by having a clear expectation of the outcome from using the decision-making model, in addition to “[setting] objectives for others to respond to, [carrying] out an unrestricted search for solutions, [getting] key people to participate, and [avoiding the use of] their power to influence the decision outcome” (Carpenter et al., 2013).
To prevent analysis paralysis, which takes place when more time is spent thinking about information rather than making decisions, Motorola should ultimately act on fostering innovation and manufacturing goods that follow consistent trends. The company’s management should truly align their focus towards bettering their own product lines, rather than prioritizing on investments with other companies.
Conclusion: Organizational Culture
Motorola was a pioneer in improving mobile communication globally as they introduced the first cellular phone and gave way for better communication among law enforcement and firefighters. However, the company dealt with lower profitability over time, and they could not develop phones that consistently adapted to newer data networks and features like other phone companies could. Motorola’s financial losses led to multiple layoffs that cut off thousands of jobs for employees, gathering greater tensions towards the company’s corporate culture and resorting to selling businesses.
The company has since then provided customers phones using Android’s operating system and is steadily receiving more profit. However, Motorola will keep losing revenue and popularity unless the company follows Porter’s Five-Forces Analysis of Market Structure and the rational decision-making model by reshaping their management to adapt to change and considering their competitors. This would enable the company to develop exclusive phone models that have more modern options likened to Apple’s iPhones. Likewise, following the structure and model can enable Motorola to maintain a better work environment and execute well to internal and external audiences.
Anderson, H. (2008, April 9). 10 reasons why Motorola failed. Retrieved from https://www.networkworld.com/article/2277903/10-reasons-why-motorola-failed.html .
Carpenter, M., Bauer, T., Erdogan, B., Short. J. (2013). Principles of Management. Version
2.0. Retrieved from https://mbsdirect.vitalsource.com/#/books/MBS1549121/ .
Fishman, T. C. (2014, August 25). What Happened to Motorola. Retrieved from https://www.chicagomag.com/Chicago-Magazine/September-2014/What-Happened-to-Motorola/ .
Hartung, A. (2014, August 6). Motorola’s Road to Irrelevancy – Focusing on its Core. Retrieved from https://www.forbes.com/sites/adamhartung/2014/08/06/motorolas-road-to-irrelevancy-focusing-on-its-core/#709e73ee442a .
Motorola. (2020). Retrieved from https://www.motorola.com/us/about .