Radioshack Failure Analysis And Change Strategy
Failure Analysis and Change Strategy
LDR 531
March 16th, 2015
Dr. Timothy Glaid
Failure Analysis and Change Strategy
Businesses can succeed or fail while attempting to achieve their goals depending upon their ability to change. Google is a well know organization whose change and leadership strategies have led to their success. Leaders of unsuccessful businesses often fail to make changes that ultimately lead to failure. RadioShack is a failing organization whose leadership did not make changes to prevent the impending failure. Analysis of successful organization’s leadership, behavior, structure, and culture could be used as a reference to changing of failed businesses. The following paper will analyze reasons for success and failure …show more content…
of Google and RadioShack, as well as possible leadership strategies that could have prevented RadioShack’s failure.
Google Inc.
According to Google, its mission is “to organize the world’s information and make it universally accessible and useful” (Google, 2015). As today’s technology has advanced access to the world 's information, this has become the new corporate model. The vision of the company is, "Focus on the user and all else will follow" (Google, 2015). The recognition of the customer has given Google a foundation from which they have catapulted into a multi-billion dollar corporation. “Google is a customer-centered company—its innovation process begins and ends with the customer” (Mourdoukoutas, 2011).
Google’s Leadership
The team is ultimately run by Google’s Executive Officers, Senior Leadership, and The Board of Directors (Google Company Management Team, 2015). It is essential that the leadership team works in close collaboration in order to direct the goals and plans for the organization as well as oversee day to day activities. Google feels that the key to success in their organization is to hire effective leaders that can implement the right culture, behavior, and structure that lead the objectives, vision, and mission of the organization. Google created a leadership and development plan that came up with three leadership competencies which the management uses for hiring. The three competencies include: be a good coach, empower your team and don’t micromanage, and express interest in team member’s success and personal well-being (Robbins & Judge, 2013). Google leaders have qualities that inspire a healthy culture, communication, and diversity.
Allowing employees to have some influence over decisions that will affect them is called participative leadership (Yulk, 2013). Participative leadership is often necessary as part of a political process for getting decisions approved and implemented in organizations (Yulk, 2013). “Participative Leadership also has implications for achieving task objectives and implementing change” (Yulk, 2013). Using strategies such as Participative Leadership styles have increased employee participation and job satisfaction during change and innovation. According to Wojcicki (2011), “nurturing a culture that allows for innovation is the key” to Google’s successes.
Google’s operational culture is based on the sharing of information and ideas. Google’s most senior executive officers sponsor a weekly meeting to share publically unknown technical issues and operational failures with their employees, and host a question and answer session. Such culture makes Google employees decision makers and participants of Google’s day-to-day and future operation (Yale School of Business, 2011). Despite a Google’s global diversity, it is successful at communicating. Google Inc. is an immensely diverse organization, hiring the brightest minds from around the world, favoring ability over experience (Google, 2015). Google 's span reaches almost every continent with over 70 offices in 40 countries and is offered in 130 languages (Google, 2015). Global companies are faced with issues such as cross-cultural factors and language barriers (Robbins & Judge). According to Robbins and Judge (2013) one of the rules of communicating with people from different cultures is to "assume differences until similarity is proven" (p. 358). Google practices open culture - everyone at Google contributes and feels comfortable sharing ideas and opinions.
A Google organizational goal is to create employee satisfaction. Employee satisfaction is implemented by offering free gourmet food, snacks, and drinks, as well as a facility with gyms, video game rooms, on-site child care and medical services. Such work environment motivates current employees and attracts global talents (Bauer & Erdogan, 2015).
RadioShack Corporation According to Barbara (2015) the mission of RadioShack is, "Through its convenient and comfortable neighborhood stores, knowledgeable sales associates help customers get the most out of their technology products” As a mission statement indicates the steps a business will undertake to become successful, RadioShack mission is aligned to create favorable condition for the success of its business.
RadioShack relies on its vision to develop itself and expand its business. Abrahams (2007) agrees, “RadioShack’s vision is to demystify technology in every neighborhood in America”.
On Friday, March 13, 2015 the RadioShack Corporation gave warning to anyone buying its stock would be quote “wasting their money” (Kilgore, 2015). This once well-known American business has only just recently announced in impending Chapter 11 bankruptcy and its inevitable closing of what was once an empire of 4,250 psychical structures. Indicators show the downfall of Radio Shack was primarily due to competition in the online market and a marketing mix that no longer meets the needs of its customers. RadioShack’s leadership did not adjust to changes in technology or to what competition was doing. Two key forces to change in organizations are technology and competition (Robbins & Judge, 2013). RadioShack should have done a better job analyzing market trends and forecasted a strategy to adjust to the evolving …show more content…
market.
RadioShack’s Need for Change
The most critical area Radio Shack must consider for change comprises of restructuring its competitive strategy to excel in consumer markets.
The change includes the online arena and adjusts to changes in technology. The company’s management needs to look at critical stages to assess and plan for the future. As Mintzberg, et., al (2002) argues “systems planning can make a contribution.” Some of these stages include comparing current offerings against those of new entries to the market with a focus on consumers. Continuous assessment will allow the company to redirect when plans seem not to achieve goals. “Business owners should regularly assess the competitive landscape in comparison to their offerings. With a better understanding of how a business fits into the industry at large, it 's easier to identify areas where a company can shift its focus to continue to be successful” (Parsons,
n.d).
Radio Shack would have benefited more if it balanced its plans for growth with setting up reasonable timeframe and attainable budget to achieve goals. One issue the company suffered from was that it expanded too quickly and did not have the capital and resources to implement every new strategy during its mid years of launch. RadioShack stumbled with fast, substantial budget growth plans that yield less success than anticipated.
RadioShack’s Barriers
The potential barriers that RadioShack may encounter consist of a number of factors. First the company’s storefronts are not spacious enough for customers to shop around. Because of the small size of the stores, the stores cannot carry many products for the customers to pick from, and that means the customers may not get the best prices possible. Mintzberg, et., al (2002) remarks business must be “taking an established product to a new level, or setting a new standard for customer satisfaction.” Second, RadioShack may face difficulty to adjust its strategic plan to adapt to an increasingly fast-paced market. For decades, their target customer has been a hobbyist who tinkered with radio and electronic parts in his or her spare time. But since companies like Dell and Apple have changed the way people buy computers, RadioShack may lose its touch as customers may want to do business with companies that factor customers into their strategic planning. Third, RadioShack may want to expand too quickly while giving no consideration to its capacity to raise capital and resources to implement the new strategies.
RadioShack’s Leadership RadioShack leaders may have had power to enact strategic decisions, but effectively leading the company is not the same. It is unclear if the downfall of decision-making was because of organizational leadership or directive power of top executives. According to Robbins and Judge (2013), individuals in positions of power are more likely to be blamed for the failures of an organization. For RadioShack to rescue itself from failure, it will need leadership and effective use of power. According to Altinkurt and Yilmaz (2012), "The key to sustainable organizational efficiency and effectiveness is proper management, which depends on administrators ' skills to influence their followers and guide them within the framework of organizational goals" (para 1). There is no indication political issues caused the demise of RadioShack although politics have been tied to decreased job satisfaction, increased anxiety, increased turnover, and reduced performance (Robbins & Judge, 2013). Political behavior is a part of organizational life, and many managers report it is a necessary part of doing business (Robbins & Judge, 2013). For RadioShack to succeed moving forward, it is important that leaders stay faithful to the goals of creating a new and successful organizational identity. It is important to realize some employees are more aware of political situations and can manage impressions while others have weak political skills. Those with poor political skills are more likely to have lower job satisfaction, increased anxiety, and lower performance (Robbins & Judge, 2013). It is vital that leaders recognize political behavior and strategically focus the activity to have a positive effect.
RadioShack’s Implement for Change
Implementing the change required to turn RadioShack around requires precise and calculated planning. Following John Kotter 's eight-step plan will help reduce costly mistakes. Kotter 's eight sequential steps start with establishing a sense of urgency and a compelling reason change is needed for RadioShack (Robbins & Judge, 2013). The second step is creating a coalition with power to manage the change process. The coalition is an assembly of internal and external supporters. Starting at the top and third in the process is creating a new vision and strategy that will direct the change process. This new vision established by the executive management will be the backbone and guiding force for all strategic decisions. Step four is the communication of the vision throughout the organization and to stakeholders.
The fifth through seventh steps encompass the movement section of the eight-step plan (Robbins & Judge, 2013). Step five involves empowering others to act on the vision and take risks in pursuit of solving problems. Empowering others to act on a shared goal enables the employees to become change agents in the turnaround. The sixth step involves planning, creating and rewarding the short-term wins that move the company incrementally towards the new vision (Robbins & Judge, 2013). The seventh step joins improvements so they can be assessed for effectiveness and alignment with organizational goals. At this stage of the process, some improvements and decisions may have to be adjusted to realign to the new vision. The last step in the process involves solidifying the changes by demonstrating to correlation between new processes and behaviors and RadioShack 's success. In conclusion, the ability of leaders to implement change and innovation in their organization is crucial to its success. Google’s leadership styles and strategies that have facilitated change have lead to the organization’s success. Unfortunately, RadioShack’s inability to adapt to changes has lead to the organization’s failure. The leaders of RadioShack failed to consider external factors such as potential barriers and competition. For RadioShack to redeem its success back, the organization would have to reformulate a plan that involves changes as a constant factor, as well as conforms to external factors that contribute to those changes.
References
Abrahams, J., (2007). 101 Mission Statements from Top Companies: Plus Guidelines for Writing Your Own Mission Statement. Retrieved from https://books.google.ca/
Altinkurt, Y., & Yilmaz, K. (2012). Relationship between school administrators ' organizational power sources and teachers ' organizational citizenship behaviors. Educational Sciences: Theory and Practice, 12(3), 1843-1852. Retrieved from http://search.ebscohost.com.ezproxy.apollolibrary.com/login.aspx?direct=true&db=eric&AN=EJ1000899&site=ehost-live
Bauer, T., & Erdogan, B. (2015). Decision-making culture: The case of Google. Retrieved from http://catalog.flatworldknowledge.com/bookhub/4?e=fwk-122425-ch11a_s01
Farfan, B., (2015) Radio Shack Mission Statement Is Clear & Simple, Customers & Electronics. About.com. About money. Retrieved from http://retailindustry.about.com
Kilgore, T. (2015, March). RadioShack warns investors its stock should trade at zero. Retrieved from http://www.marketwatch.com/story/radioshack-warns-investors-its-stock-should-trade-at-zero-2015-03-13
Google. (2015). Company. Retrieved from http://www.google.com/about/company/
Google Company Management Team.(2015).Retrieved from http://www.google.com/about/company/facts/management/
Mintzberg, H., Lampel, J. B., Quinn, J. B., & Ghoshal, S. (2002). The Strategy Process: Concepts, Contexts, Cases, 4th Edition. [VitalSource Bookshelf version]. Retrieved from http://online.vitalsource.com/books/9781269357913/id/pg18
Mourdoukoutas, P. (2011). Google’s Two Secrets of Success. Retrieved from http://www.forbes.com/sites/panosmourdoukoutas/2011/10/13/googles-two-secrets-of-success/
Parsons, S. (n.d) 3 Business Planning Lessons From RadioShack 's Bankruptcy: What small businesses can do to avoid a similar fate. Inc.com. Retrieved from http://www.inc.com/
Robbins, S. P., & Judge, T. A. (2013). Organizational Behavior (15th ed.). Retrieved from The University of Phoenix eBook Collection database.
Wojcicki, S. (2011, July). The Eight Pillars of Innovation. Retrieved from https://www.thinkwithgoogle.com/articles/8-pillars-of-innovation.html
Yale School of Business. (2011, March). What 's the Google Approach to Human Capital. Retrieved from http://insights.som.yale.edu/insights/whats-google-approach-human-capital
Yukl, G. (2013). Leadership in Organizations (8th ed.). Retrieved from The University of Phoenix eBook Collection database.
LDR 531
March 16th, 2015
Dr. Timothy Glaid
Failure Analysis and Change Strategy
Businesses can succeed or fail while attempting to achieve their goals depending upon their ability to change. Google is a well know organization whose change and leadership strategies have led to their success. Leaders of unsuccessful businesses often fail to make changes that ultimately lead to failure. RadioShack is a failing organization whose leadership did not make changes to prevent the impending failure. Analysis of successful organization’s leadership, behavior, structure, and culture could be used as a reference to changing of failed businesses. The following paper will analyze reasons for success and failure …show more content…
of Google and RadioShack, as well as possible leadership strategies that could have prevented RadioShack’s failure.
Google Inc.
According to Google, its mission is “to organize the world’s information and make it universally accessible and useful” (Google, 2015). As today’s technology has advanced access to the world 's information, this has become the new corporate model. The vision of the company is, "Focus on the user and all else will follow" (Google, 2015). The recognition of the customer has given Google a foundation from which they have catapulted into a multi-billion dollar corporation. “Google is a customer-centered company—its innovation process begins and ends with the customer” (Mourdoukoutas, 2011).
Google’s Leadership
The team is ultimately run by Google’s Executive Officers, Senior Leadership, and The Board of Directors (Google Company Management Team, 2015). It is essential that the leadership team works in close collaboration in order to direct the goals and plans for the organization as well as oversee day to day activities. Google feels that the key to success in their organization is to hire effective leaders that can implement the right culture, behavior, and structure that lead the objectives, vision, and mission of the organization. Google created a leadership and development plan that came up with three leadership competencies which the management uses for hiring. The three competencies include: be a good coach, empower your team and don’t micromanage, and express interest in team member’s success and personal well-being (Robbins & Judge, 2013). Google leaders have qualities that inspire a healthy culture, communication, and diversity.
Allowing employees to have some influence over decisions that will affect them is called participative leadership (Yulk, 2013). Participative leadership is often necessary as part of a political process for getting decisions approved and implemented in organizations (Yulk, 2013). “Participative Leadership also has implications for achieving task objectives and implementing change” (Yulk, 2013). Using strategies such as Participative Leadership styles have increased employee participation and job satisfaction during change and innovation. According to Wojcicki (2011), “nurturing a culture that allows for innovation is the key” to Google’s successes.
Google’s operational culture is based on the sharing of information and ideas. Google’s most senior executive officers sponsor a weekly meeting to share publically unknown technical issues and operational failures with their employees, and host a question and answer session. Such culture makes Google employees decision makers and participants of Google’s day-to-day and future operation (Yale School of Business, 2011). Despite a Google’s global diversity, it is successful at communicating. Google Inc. is an immensely diverse organization, hiring the brightest minds from around the world, favoring ability over experience (Google, 2015). Google 's span reaches almost every continent with over 70 offices in 40 countries and is offered in 130 languages (Google, 2015). Global companies are faced with issues such as cross-cultural factors and language barriers (Robbins & Judge). According to Robbins and Judge (2013) one of the rules of communicating with people from different cultures is to "assume differences until similarity is proven" (p. 358). Google practices open culture - everyone at Google contributes and feels comfortable sharing ideas and opinions.
A Google organizational goal is to create employee satisfaction. Employee satisfaction is implemented by offering free gourmet food, snacks, and drinks, as well as a facility with gyms, video game rooms, on-site child care and medical services. Such work environment motivates current employees and attracts global talents (Bauer & Erdogan, 2015).
RadioShack Corporation According to Barbara (2015) the mission of RadioShack is, "Through its convenient and comfortable neighborhood stores, knowledgeable sales associates help customers get the most out of their technology products” As a mission statement indicates the steps a business will undertake to become successful, RadioShack mission is aligned to create favorable condition for the success of its business.
RadioShack relies on its vision to develop itself and expand its business. Abrahams (2007) agrees, “RadioShack’s vision is to demystify technology in every neighborhood in America”.
On Friday, March 13, 2015 the RadioShack Corporation gave warning to anyone buying its stock would be quote “wasting their money” (Kilgore, 2015). This once well-known American business has only just recently announced in impending Chapter 11 bankruptcy and its inevitable closing of what was once an empire of 4,250 psychical structures. Indicators show the downfall of Radio Shack was primarily due to competition in the online market and a marketing mix that no longer meets the needs of its customers. RadioShack’s leadership did not adjust to changes in technology or to what competition was doing. Two key forces to change in organizations are technology and competition (Robbins & Judge, 2013). RadioShack should have done a better job analyzing market trends and forecasted a strategy to adjust to the evolving …show more content…
market.
RadioShack’s Need for Change
The most critical area Radio Shack must consider for change comprises of restructuring its competitive strategy to excel in consumer markets.
The change includes the online arena and adjusts to changes in technology. The company’s management needs to look at critical stages to assess and plan for the future. As Mintzberg, et., al (2002) argues “systems planning can make a contribution.” Some of these stages include comparing current offerings against those of new entries to the market with a focus on consumers. Continuous assessment will allow the company to redirect when plans seem not to achieve goals. “Business owners should regularly assess the competitive landscape in comparison to their offerings. With a better understanding of how a business fits into the industry at large, it 's easier to identify areas where a company can shift its focus to continue to be successful” (Parsons,
n.d).
Radio Shack would have benefited more if it balanced its plans for growth with setting up reasonable timeframe and attainable budget to achieve goals. One issue the company suffered from was that it expanded too quickly and did not have the capital and resources to implement every new strategy during its mid years of launch. RadioShack stumbled with fast, substantial budget growth plans that yield less success than anticipated.
RadioShack’s Barriers
The potential barriers that RadioShack may encounter consist of a number of factors. First the company’s storefronts are not spacious enough for customers to shop around. Because of the small size of the stores, the stores cannot carry many products for the customers to pick from, and that means the customers may not get the best prices possible. Mintzberg, et., al (2002) remarks business must be “taking an established product to a new level, or setting a new standard for customer satisfaction.” Second, RadioShack may face difficulty to adjust its strategic plan to adapt to an increasingly fast-paced market. For decades, their target customer has been a hobbyist who tinkered with radio and electronic parts in his or her spare time. But since companies like Dell and Apple have changed the way people buy computers, RadioShack may lose its touch as customers may want to do business with companies that factor customers into their strategic planning. Third, RadioShack may want to expand too quickly while giving no consideration to its capacity to raise capital and resources to implement the new strategies.
RadioShack’s Leadership RadioShack leaders may have had power to enact strategic decisions, but effectively leading the company is not the same. It is unclear if the downfall of decision-making was because of organizational leadership or directive power of top executives. According to Robbins and Judge (2013), individuals in positions of power are more likely to be blamed for the failures of an organization. For RadioShack to rescue itself from failure, it will need leadership and effective use of power. According to Altinkurt and Yilmaz (2012), "The key to sustainable organizational efficiency and effectiveness is proper management, which depends on administrators ' skills to influence their followers and guide them within the framework of organizational goals" (para 1). There is no indication political issues caused the demise of RadioShack although politics have been tied to decreased job satisfaction, increased anxiety, increased turnover, and reduced performance (Robbins & Judge, 2013). Political behavior is a part of organizational life, and many managers report it is a necessary part of doing business (Robbins & Judge, 2013). For RadioShack to succeed moving forward, it is important that leaders stay faithful to the goals of creating a new and successful organizational identity. It is important to realize some employees are more aware of political situations and can manage impressions while others have weak political skills. Those with poor political skills are more likely to have lower job satisfaction, increased anxiety, and lower performance (Robbins & Judge, 2013). It is vital that leaders recognize political behavior and strategically focus the activity to have a positive effect.
RadioShack’s Implement for Change
Implementing the change required to turn RadioShack around requires precise and calculated planning. Following John Kotter 's eight-step plan will help reduce costly mistakes. Kotter 's eight sequential steps start with establishing a sense of urgency and a compelling reason change is needed for RadioShack (Robbins & Judge, 2013). The second step is creating a coalition with power to manage the change process. The coalition is an assembly of internal and external supporters. Starting at the top and third in the process is creating a new vision and strategy that will direct the change process. This new vision established by the executive management will be the backbone and guiding force for all strategic decisions. Step four is the communication of the vision throughout the organization and to stakeholders.
The fifth through seventh steps encompass the movement section of the eight-step plan (Robbins & Judge, 2013). Step five involves empowering others to act on the vision and take risks in pursuit of solving problems. Empowering others to act on a shared goal enables the employees to become change agents in the turnaround. The sixth step involves planning, creating and rewarding the short-term wins that move the company incrementally towards the new vision (Robbins & Judge, 2013). The seventh step joins improvements so they can be assessed for effectiveness and alignment with organizational goals. At this stage of the process, some improvements and decisions may have to be adjusted to realign to the new vision. The last step in the process involves solidifying the changes by demonstrating to correlation between new processes and behaviors and RadioShack 's success. In conclusion, the ability of leaders to implement change and innovation in their organization is crucial to its success. Google’s leadership styles and strategies that have facilitated change have lead to the organization’s success. Unfortunately, RadioShack’s inability to adapt to changes has lead to the organization’s failure. The leaders of RadioShack failed to consider external factors such as potential barriers and competition. For RadioShack to redeem its success back, the organization would have to reformulate a plan that involves changes as a constant factor, as well as conforms to external factors that contribute to those changes.
References
Abrahams, J., (2007). 101 Mission Statements from Top Companies: Plus Guidelines for Writing Your Own Mission Statement. Retrieved from https://books.google.ca/
Altinkurt, Y., & Yilmaz, K. (2012). Relationship between school administrators ' organizational power sources and teachers ' organizational citizenship behaviors. Educational Sciences: Theory and Practice, 12(3), 1843-1852. Retrieved from http://search.ebscohost.com.ezproxy.apollolibrary.com/login.aspx?direct=true&db=eric&AN=EJ1000899&site=ehost-live
Bauer, T., & Erdogan, B. (2015). Decision-making culture: The case of Google. Retrieved from http://catalog.flatworldknowledge.com/bookhub/4?e=fwk-122425-ch11a_s01
Farfan, B., (2015) Radio Shack Mission Statement Is Clear & Simple, Customers & Electronics. About.com. About money. Retrieved from http://retailindustry.about.com
Kilgore, T. (2015, March). RadioShack warns investors its stock should trade at zero. Retrieved from http://www.marketwatch.com/story/radioshack-warns-investors-its-stock-should-trade-at-zero-2015-03-13
Google. (2015). Company. Retrieved from http://www.google.com/about/company/
Google Company Management Team.(2015).Retrieved from http://www.google.com/about/company/facts/management/
Mintzberg, H., Lampel, J. B., Quinn, J. B., & Ghoshal, S. (2002). The Strategy Process: Concepts, Contexts, Cases, 4th Edition. [VitalSource Bookshelf version]. Retrieved from http://online.vitalsource.com/books/9781269357913/id/pg18
Mourdoukoutas, P. (2011). Google’s Two Secrets of Success. Retrieved from http://www.forbes.com/sites/panosmourdoukoutas/2011/10/13/googles-two-secrets-of-success/
Parsons, S. (n.d) 3 Business Planning Lessons From RadioShack 's Bankruptcy: What small businesses can do to avoid a similar fate. Inc.com. Retrieved from http://www.inc.com/
Robbins, S. P., & Judge, T. A. (2013). Organizational Behavior (15th ed.). Retrieved from The University of Phoenix eBook Collection database.
Wojcicki, S. (2011, July). The Eight Pillars of Innovation. Retrieved from https://www.thinkwithgoogle.com/articles/8-pillars-of-innovation.html
Yale School of Business. (2011, March). What 's the Google Approach to Human Capital. Retrieved from http://insights.som.yale.edu/insights/whats-google-approach-human-capital
Yukl, G. (2013). Leadership in Organizations (8th ed.). Retrieved from The University of Phoenix eBook Collection database.