Proposed SNA: The communication between PDs and NOs in Philips

Proposed SNA: The communication between PDs and NOs in Philips

ShuWei  An
Exchange student blog entry

Background:

Philips was founded In 1892, Gerard Philips and his father opened a small light-bulb factory in Eindhoven, Holland. When their venture almost failed, they recruited Gerard’s brother, Anton, an excellent salesman and manager. By 1900, Philips was the third largest light-bulb producer in Europe. Philips built its success on a worldwide portfolio of responsive national organizations while its main competitor ---Matsushita based its global competitiveness on its centralized, highly efficient operations in Japan.

In order to have the great advantage in being able to sense and respond to the differences, Philips decided to build the postwar organization on the strengths of the national organizations(NOs). NOs became more independent and isolated from the parent company. While NOs took major responsibility for financial, legal, and administrative matters, fourteen product divisions (PDs), located in Eindhoven, were formally responsible for development, production, and global distribution. (In reality, the NOs’ control of assets and the PDs’ distance from the operations often undercut this formal role.)

While the formal corporate-level structure was represented as a type of geographic/product matrix, it was clear that NOs had the real power. NOs always reported directly to the management board. The independence made NOs out of control from the parent company. Sometimes, it was difficult to define the responsibilities of NOs and PDs. This organization model created the inefficient operations and led to a loss.

During the 1990s, Philips experienced major challenges to their historic competitive positions and organizational models, and at the end of the decade, Philips was struggling to reestablish their competitiveness. Seven chairmen experimented with reorganizing the company to deal with its growing problems. I think that maybe we can use SNA to assess the communication between PDs and NOs, then find the potential problems in Philips and promote some solutions to improve the communications between PDs and NOs.

Research Question:

What is the potential communication problems between PDs and NOs?

How can Philips improve the communications between PDs and NOs?

Objective & Methodology:

Objective: Design a survey and get some data about the communication between the PDs and NOs. Use UCINET to make a SNA in order to find the potential problems that Philips was facing. And then promote some recommendations to help Philips improve the connections between PDs and NOs.

Survey questions:

1.Where are you from and which country are you working in?

2.Which division are you working in, PDs or Nos?

3.Which sector are you working in, R&D, Manufacturing, Marketing, HR or Finance?

4.Who do you contact with because of work relations?

5.Who do you contact with outside the company?

6.What social tools do you use to contact with others?

7.How many years have you worked at Philips?

8.How many different sectors have you worked in?

9.How many years have you worked in your current sector?

10.How many language can you speak?

11.How many friends do you have on each of the social networking websites?

12.How many times have you participated in the corporate training?

13.How many times have you participated in the corporate activities? Which activities are you interested in?

14.How many conferences did you attend at corporate headquarters per year?

15.What job are you doing, management or operation?

……

Attribute data:

Gender (male, female)

Age

Work experience in Philips

Work divisions(PDs, NOs)

Work sectors(R&D, Manufacturing, Marketing, HR, Finance or Management)

Working place(Netherland, Europe, USA, Asia, Africa)

Social tools(letter, e-mail, telephone, fax, conference, video conference, social networking Websites)

Work experience in different sectors

Training times they have participated in

Languages they can speak

Corporate activities times they have participated in

Working level(management, operation)

……

Due to a large number of sample data, the SNA is based on level 4.

Assumptive conclusion:

According to the SNA, we can find some communication problems in Philips which can be listed as follows:

1. The people in PDs connected more actively with the people in NOs. And the people engaged in management socialized better than the people working in the operating level.

Solutions: Philips should hold regular meetings, ask NOs report their works and providing them more time to communicate with each. And Philips have to provide more cross-training to both managerial employees and operating employees.

2.The people in the Financial department socialized better than the people in the R&D department. Because the financial employees have to report the financial situation to the headquarters, but the NOs have independent laboratories and technological innovation teams.

Solutions: Philips should close the non-profit local plant and centralize the R&D department. Organize an central technological innovation team to strengthen the communication with NOs  and create highly efficient operations just like Matsushita did.

3. The people have worked in different sectors socialized more actively than the people only worked in one sector.

Solutions: Philips should change their corporate policy to reallocate the positions every three or four years. The employees can have more broader work experience and will enhance their communication with others.

Personal questions:

1.It will be difficult for Philips to centralize the R&D department and labs. Because NOs want to have more power and there will be a resistance to reallocate the positions and resources.

2. Philips have so many subsidiaries and workers, I don’t know if it is practical to do such a survey. And I’m not sure how to determine the analysis level and which level is best for us to do the SNA by using UCINET.