The 3M Company Case Study Essay Example for Free

The 3M Comp every last(predicate) Case Study look forIntroductionThe 3M Company is a $18 billion diversified technology company with leading positions in substantiallyness vexation, safety, electronics, telecommunications, industrial, consumer and gainice, and some other markets. Headquartered in St. Paul, Minnesota, 3M has operations in to a greater extent than 60 countries, serving customers worldwide. 3M is one of the precede 50 Fortune 500 companies and has been one of Fortune magazines ten dollar bill most admired corporationsfor the last ten historic period. Since its founding in 1902, Minnesota Mining and Manufacturing Company has be put in one of the worlds most revolutional and juicy companies. 3Ms primary growth strategy is to sell more existing w atomic number 18s into smart markets and to introduce modern products into bran- bracing or existing markets.3M mission is to be the most innovative enterprise and the preferred supplier to customers. 3M mes s is to sastisfy customers with superior quality, value, and service.A section of the 3M Company, 3M tumefyness In system Systems, the grownst and one of the fastest-growing of 3Ms seven major phone linees, serves medical, dental, pharmaceutical, and personal c be markets. 3M Health Information Systems is a leading provider of advanced software tools and services that help health criminal maintenance brass instruments capture, classify, and manage accurate health care data. With more than 20 years of industry experience, 3M Health Information Systems solutions help ensure the quality of data and the extremityes that drive an organizations ability to manage tax income, comply with regulations, make better the quality of patient care, and manage resources effectively.Read more 3MOrganizational StructureThrough this paper, 4 master(prenominal) purposes volition be discussed in order to identify the position of 3M strategy regarding its foundation oversight,especially in the health care division . First of all, lets identify the main issues of 3M affecting its establishment wariness. The second point pull up stakes be to discuss the national dodging of base in health care.As a ternion point , three academical mannikin pass on be apply to 3M instauration circumspection. Lastly , based on the findings lower on analysis of the theories , some recommendations pull up stakes be suggested to improve 3M presentation management.Section 1 exact an organisation and outline the main problems which impact on the effective innovation management.In answering this part of the gesture you may, if appropriate, provide drills of recent innovation in product, services or process.In the field of innovation management , 3M is the attr swear out. 3Ms corporate strategy shows anyway some internal and external concerns which impact the effective innovation management put in place at 3M.The first concern which come up is that 3M has established a corporate goal of generating 30% of gross gross sales from products introduced within the previous 4 years. In striving to carry out this goal, the company spends 7 cents of every sales dollar on R D more than in two ways the average of U.S. manufacturing companies.It could be daten as too much concentration of innovations even if they are not indispensable in the market. According to William Coyne, 2001 at 3M, in recognition that product life troll are congruous shorter, the company has recently set up a new goal of 10 per cent of sales coming from product slight than a year old.But as most business leader would ac friendship that developing genuianely new products is a high risk activity industrial product acquit merely a 5050 chance of being succesfull, while consumer goods fare even worsened , with a one ten chance of succeeding . In attempt to meet the 30% or 10% rule, the employees strive to introduce new innovations on the products, even if those innovations do not add a ny value to the customers whilst the company is heavily spending on RD.The second concern which was noted related to 3M innovation management. Gundling, E. (2000) argues that 3M declared victory too early .In fact 3M has a high publicity and reputation for innovation and this lead to over confidence resulting that every employee believe that they are all innovators .So there is noone to set the standards for innovation, against which innovation performance can be assessed. The troubles that afflicted 3M is the milieu that encourages community to work around and defy their superiors and a determination to let the company follow where its scientists and customers lead.However , it is important for 3M employee not to fall into the trap of happy self deception or to be content with just incremental products.In fact , fit in to William Coyne (2001), the company gain managers were very concerned that too much of the companys growth was coming from incremental improvement to existing products.The third draw supports that 3M has is the fact that they produce overwhelming too many products than what overseas subsidiaries can manage to market . Ernest Gundling (2000) argues that subsidiaries employees are trying to serve the needs of numerous 3m divisions simultaneously , some employees are kept so bad-tempered dealing with US or regional headquaters that they lack the prison term to focus on their customers. As a result 3M is very big alone acts sharp.Each of 3Ms 45 product divisions constitute a business in itself with its specific customer base, with its own general manager, marketing director, practiced director, human resources director, manufacturing director, and national sales manager (Coyne, 1997). 3M is a highly decentralized company, but care is taken to decentralize to units that are bounteous enough to be self-standing and, therefore, capable of funding their own RD. On the other hand, 3M attempts to prevent divisions from getting so large that respective(prenominal) innovations do not count. 3Ms strong belief in divisional railcarnomy is countervailed by the corporate requirements of a high level of innovativeness and interdivisional noesis-sharing (Goold et al.,1994, p.203).Fourthly , according to Gundling, E. (2000),3M still unofficially practices lifetime employment. It is affirmable to get fired, but normally only for a serious ethical br from each one, gross imcompetence , lack of motivation, or negligence. When the company decided to reduce their workforce , the only concern they face is how to preserve the experience and champion of dedication that will ensure continued innovation in the company.In fact masses laid off because of their performance or early retirement are well attracted by others firms to work and part the familiarity they acquire finished 3M experience.Finally 3M face not only internal concerns as seen before but external environnement affect as well its innovation management. In fact accor ding to Gundling, E. (2000), when a product has been approved for marketing, 3m still have to wait the review from the regulatory agencies in other countries.This could slow wipe out the innovation process of the company for instance for the launch of the Aldara cream.Section B Briefly indicate how the national System of Innovation influences the company s ability to manage innovation.According to Tidd, J. et al (2001), the national system of innovation in which a firm is embedded, strongly influences both the direction and the vigour of its own innovation activities. He identifies three national factors that influence the rate and direction of innovation, National market incentives and pressures competencies in takings and research and institutions for corporate governance.The innovation policy whereby 3M scientists hold regular meetings with customers allows the company to utilise experience easy on the market, for its innovation management.In relation to health care produc ts, 3M is forced to keep innovating due(p) to uttermost(prenominal) competition and regulation in the US.Competition does too promote innovation by providing opportunity for formation of alliances to overlap costs and risks in risky and costly projects.3M enjoys national competencies in production and research through the availability of universities with which it has research links.US, as a nation also ranks high among nations with good innovation environment indicators. The nation has steadily change magnitude its RD expenditure (as a percentage of GNP) from 0.99% to 1.60% amidst 1967 and 1998. Tidd, J. et al (2001) estimated that US per capita and per detective RD expenditure was US $ 650 and US $ 169,650 respectively. RD Personnel ratio was estimated at 3,700 per million population. Tidd, J. et al (2001) posit that increased share of RD expenditure as a percentage of GDP for USA (as well as Germany and Japan) has been obligated for the growth of major firms in pharmaceut icals and telecommunication.USA has also good institutions that promote RD. These include, the National Institute of Health, which is a government funded body active in biotechnology RD .Section C Select three uninflected frameworks from the course as a means of evaluating the effectiveness of the organization s start to innovation management. there is 3 theoritical framework that could utilize to 3M innovation management concept .The first model that could be applied to 3M innovation management is the Knowledge creation Model .According to Professor Nonaka and Takeuchi, (1995), there is two types of intimacy Tacit noesis and stated knowledge .Through this dynamic interaction between the two types of knowledge, personal knowledge becomes organizational knowledge. And the organizational knowledge or intellectual infrastructure of an organization encourages its indivi ternary members to develop new knowledge through new experiences. This dynamic process is the key to organizatio nal knowledge creation. This interaction between the two types of knowledge brings about what we call quatern modes of knowledge conversion that is, socialization (from individual dumb knowledge to group unsounded knowledge), externalization (from tacit knowledge to explicit knowledge), combination (from separate explicit knowledge to systemic explicit knowledge), and internalization (from explicit knowledge to tacit knowledge).Socialization is a process of creating common tacit knowledge through shared experiences. For socialization, we need to build a field of interaction, where individuals share experiences and space at the same time, thereby creating common unarticulated beliefs or embodied skills. In the event of 3M , personal tacit knowledge which 3M requires through their recruitment process to only take knowledgeable employees and that tacit knowledge will be transferred through team working , for instance the division managers nust know each staffers first name(Mitchel l,1991).Externalization is a process among individuals within a group. During such face-to-face communication people share beliefs and learn how to better articulate their thinking, though instantaneous feedback and the simultaneous exchange of ideas. This mode is triggered by a dialog. In fact when an employee come up with a product idea, he or she recruits an action team to develop it(Mitchell,1991).Combination is a process of assembling new and existing explicit knowledge into a systemic knowledge, such as a set of specifications for a prototype of a new product. Often, a newly created concept should be combined with existing knowledge to materialize it into something tangible. For instance according to Gundling, E. (2000), 3Ms Technical Forum is a means for all technical people share technologies, practices, policies, and procedures. Exchange of technical personnel knowledge to different divisions, or other countries where 3M has operations, is common.Internalization is a proce ss of embodying explicit knowledge into tacit, operational knowledge such as know-how. This mode is triggered by learning by doing or using. straightforward knowledge documented into text, sound, or video formats facilitates the internalization process. Therefore, manuals, a quintessential example of explicit knowledge, are widely used for internalization. That has been done in 2002 when 3M published the book which is a compilation of 3M voices, memories, facts and experiences from the companys first years The innovation century , the 3M story.The second model that could be applied to 3m innovation management is the culture-innovation modelThe innovative culture of 3M has been the driving force for the companys continuous innovation and growth into a major world-wide, large-scale manufacturer. Applying the system developed by Teece, we assessed that 3M has developed complementary assets, in terms of research ability residing in individual knowledge and technical expertise held b y 3M scientists. Furthermore, this culture has helped the company develop dynamic capabilities by analysing and anticipating emerging customer needs (opportunities) and translating these opportunities into product novelty, by combining various complementary assets in a competitive, hardly inimitable way.3M is a company whose culture has led to thousands of new products every year for decades, probably the premiere company in bringing new products to market. 3Ms growing process is dramatically different from most, yet it is highly succeederful at new product development. Innovative new products from 3M because of a well-thought-out set of mechanisms which support e mergent activity.3Ms corporate strategies explicitly promote an innovative spirit. These strategies include 30% if sales must result from products less than 4 years old technical people can spend 15% of their time on projects of their own choosing every division has access to technologies developed anywhere in the com pany and has the responsibility to share the technical needs of its customers throughout the company.3Ms corporate culture is very supportive of risk taking, teamwork, innovation, and entrepreneurship. Failure is viewed as a learning experience employee relations are informal and on a first-name basis the technological base is diversified and technological exchange is encouraged throughout the company and 3M maintains a strong dedication to develop customer-driven products. These principles have all been followed at 3M for decades.The specific human resource (HR) strategy helps 3M foster innovation, concur research talent and reduce the employee turnover by giving scientists personal research time, rewarding innovation and adopting a constructive approach towards product failures. As shown in the case, the specific HR policy on with the innovative culture has been the milestones in the development and the success of the company over several decades of operation. By providing the framework for innovation, 3M allows the innovation process to be controlled almost entirely by the individual scientists, who are encouraged to think outside the square and develop new products within the specifications required by the market.The third framework that will apply 3M innovation management will be the organic structure.The organic structure is more flexible, more adaptable to a participative form of management, and less concerned with a clearly defined structure. The organic organization is open to the environment in order to capitalize upon new opportunities.Organic organizations have a flat structure with only one or two levels of management. Flat organizations emphasize a decentralized approach to management that encourage high employee involvement in decisions. In 3M, this translates into a structure where most employees entanglement into at least five levels department, division, group, sector and company. For purposes of innovation, the key level is the division . Each of the companys 40-some divisions develops, manufactures and sells its own products, and each has a structure appropriate to its market. Most divisions include functional departments division labs, manufacturing, marketing, sales, logistics and so forth as well as cross-functional teams.3Ms resulting formal structure may look bid a bureaucracys analytical hierarchy on an organization chart. But, in fact, the structure acts less like a bureaucratic prison than a platform, from which employees are expected to learn and serve customers. For instance, like the units in a living thing, the departments in any division have semi-permeable boundaries. Sales people arent trained only in sales. They learn about their divisions technology so they can describe products to customers. Moreover, theyre expected to work with people in the marketing and research departments of their divisions and to network across the company.Similarly, technical and manufacturing people regularly visit cus tomers manufacturing facilities to learn about their operations. As a result, they sometimes see possible uses of 3M products those customers havent thought of. As an example, about 15 years ago, technical people were visiting an auto manufacturers factory and learned that the rivets they used to hold side molding to doors were rusting. So the technical people went back to the lab and developed an acrylic foam tape that replaced the rivets and solved the problem.Additionally, 3M has a flexible organisational structure, with a dual ladder approach, allowing employees with technical background to advance in their career without having to switch to management. Furthermore, we assessed that the dual ladder reveals a matrix internal corporate organisational structure allowing the firm to react promptly to market opportunities and assemble rapidly multi-disciplinary teams of employees. This internal organisational structure is not visible from the outside and it is not easy to be copied by competitors, due to the high complexity of the relationships that establish within this matrix (span of command and delegation of authority).Section D establish on your analysis in section C explain how the organization could improve the management of innovationBased on the findings in the third question 3M has managed to innovate continuously and create a large pool of products (over 30,000 products), achieving continuous profitable growth over time. So suggesting new recommendations for the improvement of 3M innovation management is a difficult approach but any company even 3M has some limitation so few suggestions will be recommendable As explained in the third question, the lack of a system to pass along product developers who are seeking to create breakthroughs is a problem even for a company like 3M, long known for its success with innovation. The innovation culture the company has nurtured and the continuous investments in research and development (RD) over several decade s has helped 3M get deep roots in several competencies for instance in applied technology for health care. But willing to create although very new products and services may be essential to future growth and profit, companies must first survive to get to the future. That necessity tends to focus companies strongly on making incremental improvements in order to keep sales up and current customers and contend Street analysts happy.Second, developers simply dont know how to achieve breakthroughs, because there is usually no effective system in place to guide and support their efforts. Employees knows only that 30% of sales must come from products that had not existed four years earlier. So even if the product could have a life cycle more than four years , 3M reduce it in order to comply to the rule. For the Medical-Surgical trades Division to secure future growth it would be advisable that the division maintain a balance between incremental and revolutionary innovation. As well as pro moting more the activities like marketing or branding for the product created in the health care division because the cost of investment put in place for the creation of thoses products will be only recovered if the product stays in the market longer than 3M would. By shortering the product life cycle , it increases the RD expenditure.Even the most effective innovating firms such as 3M may create organizational bureaucracy that slows kill innovation. The most successful innovators know that just spending more on RD is not enough incomplete is anticipating customer needs. 3M employs a strategy of high decentralization and autonomy for its divisions, or units. In reality 3M also does not follow the traditional approach to organizational design. 3M consistently achieves its goal of having 15 percent of its revenue come from new products by providing managers with the latitude to move from one business unit or testing ground to another without bureaucratic obstruction. It is during t he knowledge creation process that Project groups, operating with few constraints from the formal organization, come together to accomplish a task and disband when their work is completed.One of my recommendation regarding the 3M structure is to merge RD with Sales and Marketing, subsequently creating a number of small cross-departmental innovation teams. Realignment of goals and business planning would be critical during this phase and reappointment according to respective areas of expertise must be communicated positively, offering alternative thoughtfully intentional posts, linking salary to performance. Linkage between these teams must be fabricated carefully.By creating this as an independant workforce they will be delegating responsibility , flexibility.They will be able to access fast, good communication will be involve to share the available information. This approach will enable the company to retain all the insight and move on quickly to the next step on a real time basi s. . By allowing RD , Sales and Marketing to mix and to participate in decision-making, their suggestions could have changed the outcome by allowing them to oppose in a timely manner and adjust their strategies to fit their consumers. It is also recommended to start with small class of activities because it is reducing risk and remain tight control and maintain that organic structure put in place within 3M. Finally creating independent small units that can rapidly respond to customers needs or changes in the business environment. The supervisor tends to have a more personal relationship with his or her employees in order to motivate them to succed in their objectives.Summary 3M, which obtains 30% of sales from new products within four years, offers an example of how a culture of innovation can take root and become integral to the continuing success of a company after nearly a century. Even if 3M is the model of innovation management for other companies, it has some limitations in its proper culture, structure and HRM policy which lead 3M to make some improvements that enable them to excell in their competitive advantage.The national system of innovation is the foundation of their actual direction. 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