NUR ADDNIN BINTI MOHD NOOR (HR099607)

CASE 2a

(a) Analyze the reason why has innovation at Dell been falling in recent years.

[9 marks]

It started in later years of 2000s where a large proportion of Dell’s sales came from
business customers and during the 2008 - 2009 recession demand from business slumped.
Second was during the 2000s, where HP had also learned how to outsource PC making to
reduce costs and it was also able to sell business customers a bundle that included PCs and
others services such as installing and servicing the equipment’s.

Third, Dell was lacking in competences of research and development needed to

compete with HP and Apple. And, to increase demand for its PCs it was now forced to sell
through regular bricks-and-mortar retailers like Walmart and Best Buy, which lowered its
performance and profits.

Finally, Apple was gaining market share from Dell by differentiating its products
through their performance, design, and ease of use, and it created the impression that PCs
from rivals such as Dell and HP were just old fashioned
(b) Define product life cycle AND discuss FOUR (4) stages of product life cycle.

[10 marks]

Product life cycle is the changes in demand for a product that occur over time.
Demand for most successful products passes through four stages the embryonic stage, the
growth stage, the maturity stage and the decline stage.

The first stage, the embryonic stage where in this stage customers are unsure what the
product has to offer, and it has yet to gain widespread acceptance. Dell was started in the
1990s where customer new to getting to know what does a computer do and the importance
of having it.

The second stage which is the growth stage where many consumers are entering the
market and purchasing the product for the first time. Dell’s competence was based on selling
PCs direct to customers and cutting out wholesalers and retailers so that it could give part of
the value created back to customers in the form of lower prices that led to higher sales. Dell’s
website allowed customers to mix and match product features such as microprocessors,
memory, monitors, internal hard drives, DVD drives, keyboard and mouse format, and so on
to customize their own computer system. The ability to customize orders kept customers
coming back to Dell.

The Third is maturity stage, where consumers are buying replacement products as
opposed to first-time buyers. By the 2000s, Dell competitor HP learned how to outsource PC
making to reduce costs and it was also able to sell business customers a bundle that included
not just PCs, but also advanced servers, storage devices, network equipment, and the
consulting services that helped businesses install, manage, and service the equipment.

The fourth is decline stage, occurs when demand falls. This is often because of
obsolescence. Dell started their decline due to lacked the competences in research and
development needed to compete with HP and Apple. And, to increase demand for its PCs it
was now forced to sell through regular bricks-and-mortar retailers like Walmart and Best
Buy, which lowered its performance and profits. And Dell competitor which Apple was
gaining market share from Dell by differentiating its products through their performance,
design, and ease of use, and it created the impression that PCs from rivals such as Dell and
HP were just old fashioned.
(c) Explain THREE (3) elements in creating a culture for innovation.

[6 marks]

First is organizational structure where creating the right setting is important to

fostering innovation, when Dell first started selling PCs to the consumer in the 1990s the it
was the beginning of consumer getting to know what does having a PCs do and the
importance of it. By the mid-1990s the consumer has already started buying PCs as they are
aware of it function and usage.

Second, the people where organizations need to guard against too much similarity.
Dell failed to guard their similarity which cause HP to learned how to outsource PC making
to reduce costs and it was also able to sell business customers and creating much better offer
then Dell.

Third, Property rights to create career paths to show that success is closely linked with
future promotion and rewards. Dell was being label as old fashion as Apple was gaining
market share from Dell by differentiating its products through their performance, design, and
ease of use, and it created the impression of the PCs to the consumers.
CASE 2b

(a) Analyze the organizational structure to identify potential sources of conflict and politics in
Walt Disney. [6 marks]

Organizational conflict occurs when a stakeholder group pursues its interests at the
expense of other stakeholders. Given the different goals of stakeholders, organizational
conflict is inevitable. Conflict is associated with negative images, such as unions getting
angry and violent, but some conflict can improve effectiveness

The conflict and politics that has arise in Disney was due to centralized decision
making which took a long time until the CEO Eisner approval making him to begin losing
support. He also had control over the majority of Disney’s board of directed because they
were handpicked by him and control the company agenda until the company financial loss
occur in 2000s. This had led to poor performance and affecting relationship with Pixar
company which threated to find another company if Disney does not improve.

(b) Identify FIVE (5) stages of Pondy’s model of organizational conflict. [5 marks]

The first stage is Latent Conflict, no outright conflict exists, but there is a potential for
conflict because of several latent factors. Disney conflict began with Eisner decision to
centralized decision making and political favoured in the board of directors due to they were
handpicked by him.

The second stage is Perceived Conflict where Subunits become aware of conflict and
begin to analyse it. Conflict escalates as groups battle over the cause of conflict. Due to the
loss occurred to Disney, the board member encourage Eisner to become chairman and
appointed another CEO named Iger, who always suggested new ways to improved Disney but
had never told to Eisner. The board believes Iger was up to the job.

The third stage is Felt Conflict where Subunits respond emotionally to each other, and
attitudes polarize into “us-versus-them.” Cooperation between units decreases What began as
a small problem escalates into huge conflict.
 The fourth stage is Manifest Conflict, subunits try to get back at each other &
organizational effectiveness suffers. Fighting and open aggression Violence Sabotage
Physical Intimidation Lack of cooperation Passive aggression – doing nothing.

And the final stage is Conflict Aftermath where, conflict is resolved in some way If
sources of conflict are not resolved, the dispute will arise again

(c) Briefly discuss SEVEN (7) sources of organizational power.

[14 marks]

First is Authority where the most obvious source of power. Because it is legitimate
power stemming from an organization’s legal and cultural foundations, it is the ultimate
source of power. Eisner had established a centralized office where all the decision making
have to had his approval before anything else happen. Therefore, he began losing support for
board of directors.

Second is the Control over resources, where Managers who make decisions and perform
actions benefit the organization, such as making changes that raise performance, can increase
their power. When the new CEO was appointed Iger noticed that the top managers were
following financial rules that did not lead to innovative strategies but also its declining
performances.

The third is Control over information where the access to and control over the
information flow, is a source of power. By choosing the information others receive, an
individual influence their opinions. The agenda of the company was control mainly by Eisner
when he was The CEO of Disney until the company began to incurred major losses un
themed 2000s.

Fourth is No substitutability which means that no one else can perform an individual or
subunit task, giving power. When the Board of directors started to notice the declining
performance of Disney, they had urge to encourage a new CEO to be appointed which is Iger
whom is seen as someone who has potential in saving Disney.
 The fifth is Centrality which refers to those who make decisions and functions needed for
resource flows. Centrality is a source of power. An organization’s strategy determines which
subunit is central. When Eisner had centralize power of decision making all to the CEO,
everything had to had his approval first which led to slow decision making and incurred
profit loss to the company.

The sixth is control over uncertainty, A subunit with control over the primary source of
contingencies has power. After the cut out of unnecessary layers of the previous tall hierarchy
and the establishment of divisional department by the new CEO Iger, the manager assigned to
those department are more willingly to speak up their ideas directly to the CEO. This has
improved the ideas and level of innovation in the company.

And finally, the seventh which is Unobtrusive power controlling the premises of decision
making the set of managers who form a “partnership” and use their combined power
secretively to influence decision-making process in ways that favour their interests. This can
be seen when Eisner was the CEO of Disney where he had a majority control over the board
favoured due to them being handpicked by himself thus making him the sole control over the
company ideas and agendas that are being made.