Restructuring Philips

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Case Details:

Case Code : BSTR170
Case Length : 19 Pages
Period : 1990-2005
Organization : Philips
Pub Date : 2005
Teaching Note :Not Available
Countries : Netherlands
Industry : Consumer Electronics

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

In 2001, Philips launched a company-wide restructuring program called 'Towards One Philips' (TOP). The program attempted to foster greater cooperation among its various divisions and to make Philips a unified company. The aim of the program was to get rid of the bureaucratic work culture prevailing in the company and promote teamwork. The initiative also aimed to cut costs, develop innovative products and technologies and improve relationship with customers.

Initiated by Gerard Kleisterlee (Kleisterlee), the President and CEO of Philips, the TOP program aimed to provide long-term solutions to the company's problems.

The program helped not only in lowering costs but also promoted a spirit of collaboration.

'Strategic Conversations,' a key part of the TOP initiative, promoted cooperation in setting company strategies across product groups.

Commenting on the importance of strategic conversations, Ian Wylie in an article wrote, "What is at the heart of Kleisterlee's plan to create 'One Philips' isn't technology or tactics: It's talk. In order to build internal confidence, stimulate cross-boundary cooperation and spark new-product speed to market, Kleisterlee is sponsoring what he calls 'strategic conversations': dialogues that center around a focused set of themes that Kleisterlee believes will define Philips' future."4

Background Note

Philips was founded in 1891 by Gerard Philips (Gerard) who established a facility at Eindhoven, Netherlands, to produce incandescent electric lamps.

Gerard's younger brother, Anton, joined the business in 1895 as a salesperson and helped Gerard's company to become one of the largest producers and marketers of carbon-filament lamps by the early 1900s. Philips laid a strong emphasis on research right from the start...

Excerpts >>

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4] Ian Wylie, "Can Philips Learn to Walk the Talk?"Fast Company, January 2003.


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