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Introduction

This study focuses on the way in which Philips has transformed its organisation and culture in order to flourish in the modern competitive world. Organisations today operate within an environment of change. As this environment is so dynamic, it is crucial for organisations to constantly ‘reinvent themselves.’

The biologist Brian Goodwin drew a parallel with the natural world when he said of organisms - “what you do not want to do is to get stuck in one particular state of order.” It is important, therefore, to continually adapt and move on. Nowhere is this more true than in the modern business environment, where today’s technology becomes out-of-date within a short span of time and in which there is intense global competition as firms jostle for the new “huge markets” that are opening up.

Turning things round

Philips is one of the world’s leading electronics companies. Its products are diverse and range from coffee makers to silicon chips, from recordings of Mozart’s symphonies to cancer screening systems. Philips has been at the forefront of electronic innovation since 1891, registering some 65,000 patents and has been responsible for many of this century’s greatest, most useful products:

* Electric Shaver

* Audio Cassette

* Video Cassette Recorder

* Compact Disc

* Energy Saving Lamps

The 1980s was a significant period for the electronics industry over which enormous changes took place worldwide. These included:

* a period of high growth for the consumer electronics market.

* innovative new products were introduced, many driven by Philips, such as VCRs and CDs.

* the actions of newer competitors, many of which were entering the electronics market for the first time, were underestimated.

This rapidly changing industry was signified by better quality products with higher reliability and value for money. Many of the competitors, particularly from Japan, had advantages over Philips and this was particularly marked in...