An Organizational Failure: Blockbuster Essay

1. Describe and discuss how the placements destination facilitated the failure. Philips (2011) believes that success or failure of any great come with depends on Events, internal and international (p. 3). block fall ap crafter besides appears to be a victim of accredited events at internal as well as external level. Based in McKinney, Texas, blockbuster and founded in 1985 ( smash hit Corporate, 2012) and it ushered in a saucy era as far as video allowting sell industry was concerned. The alliance gave birth to video rental places that had signifi fecest amount of impressions under wholeness roof (the first store had 8,000 movies) and were non associated with badly movies or bad neighborhoods (Greenberg, 2008). Initially, the fraternitys strategy was to expand aggressively and the attractership defined megahits heap to become McDonalds of the video rental business. Referring to the participation leaderships ambitious goals, Greenberg writes The blockbuster str ategy was unsubdivided pump as much m geniusy as possible into get local and regional chains while keeping centralized wangle over the look and feel of the individual stores.By the VSDA convention the hobby year, smash hit had acquired two other chains and its more than than 250 stores dotted the country. At the convention, Huizengas marketing executive Tom Gruber outlined vision for the incoming of the friendship, and it was expansive. Gruber had spent eighteen years working for McDonalds before connector Blockbuster, and both he and Huizenga were explicit Blockbuster wanted to be the McDonalds of home video (the comparison was so deliberate that at one trade show presentation, huge photographs of Huizenga and McDonalds leader Ray Kroc were communicate side-by-side). (p. 128) So, Blockbuster came into being with a big bang and a eccentric presentation which was reflected in its slogan Wow, What a difference (Greenberg, 2008). In the beginning, the company even hired gre eters who would welcome customers at each locations entrance whereas the employees were provided with manuals about how to deal with customers.That was the beginning. The strategy and vision worked amazingly well. However, as the company travel take with fanfare down the road, it developed a culture that might have its roots in complacency. The obsession with expansion seemed to leap out a process the leadership should have put in place. Rayburn (2009) recalls how Blockbusters culture became a liability for the company and ultimately led to its bankruptcy. In 1999, a company called Globix (Rayburn was representing it at that time) was trying to strike a deal with Blockbuster in order to deliver movies to customers online. However, Blockbuster indomit able-bodied to partner with Enron instead of Globix. Rayburn (2009) goes on to point out that though Blockbuster was discussing future developments in advance and contemplated about a digital media strategy way before consumers wanted the service and the Internet was even able to support it, that foresight on their part never materialized into any rattling online video strategy over the next ten years (para. 4).What surprises Rayburn (2009) is that in that respect was no deal between Blockbuster and Enron as was announced in 2000. In his view, Blockbuster had a great chance to be in the driving seat and should have been in the position Netflix is in deal a shot as they were the first movers in the market. Yet ten years later, the company palliate cant seem to get their act unitedly when it comes to digital media (para. 5). Apparently, it took a bankruptcy to do the course correction as far as the companys future direction is concerned. Blockbusters committal statement now takes into account todays reality. It says (Retail Industry, 2012) Our corporate mission is to provide our customers with the most convenient access to media merriment, including movie and game diversion delivered through multiple dis tribution channels such(prenominal) as our stores, by- post, vending and kiosks, online and at home.We believe Blockbuster offers customers a value-prices entertainment experience, combining the broad result depth of a specialty retailer with local neighborhood convenience. (Blockbusters Mission Statement) The timeline of the companys worldly concern shows the culture of inaction at the top level delayed changes for a very long time. The company introduced Blockbuster Total Access architectural plan aimed at online as well as in store rental as late as November 2006 (Blockbuster Corporate, 2012). On the other hand, Netflix started its journey in 1996 and introduced its subscription service in 1999 and by 2010 it had 20 million subscribers (Netflix, 2012).2. Apply the leave learning disabilities and laws that describe this situation. Like other organizations that hit stumbling blocks, Blockbuster had its overleap in the shape of certain learning disabilities. One such deterren t is what Professor Senge (2006) calls the fixation on events. He writes Conversations in organizations are dominate by concern with events last months sales, the new cipher cuts, last quarters earnings, who just got promoted or fired, the new product our competitor just announced, the delay that just was announced in our new product, and so on. The media reinforces an emphasis on short-term events after all, if its more than two days old its no longer news. (p. 21) another(prenominal) learning disability Blockbuster whitethorn have fallen eat to is the fabrication of the boiled frog. Senge (2006) explains that Maladaptation to gradually building threats to survival is so pervasive in systems studies of corporate failure that it has given rise to the parable (p. 22).Blockbuster also seemed to pay attention to events and little focus on learning new things and look beyond the horizon. Plus, it remained complacent as the leader of video rental company until Netflix and RedBox sur ged ahead to the extent that Blockbuster had to file away for bankruptcy. Levy (2010) also blames Blockbuster for not being proactive in learning and consumeing the desired changes. He believes Change guidance is not just a tool to deflect distracting whitethornbe-we-shoulds, but its also a way to handle legitimate we-need-tos that were missed at the start or that are responses to a ever-changing business purlieu (para. 7). So, instead of take charge in a ready changing rental business, Blockbuster refused to budge from its brick-and-mortar edge.Gradually, that edge fell apart like house of cards because the leadership failed to set in motion certain processes that should have allowed Blockbuster to remain the leader of the video rental retail industry. Moreover, the companys leadership had their eyes set on something else, too. Is at that place any reason to believe that Blockbuster once tried to bribe go City in 2008? According to Farfan (2010) it did happen but Circuit Ci ty rejected the offer and later on Blockbuster withdrew its offer. provided two years later, Circuit City is out of business, and Blockbuster is struggle to stay out of bankruptcy court itself. The combination of the two companies seems approximately symbiotic today, in a sad like-attracts-like kind of way (Farfan, 2010, para. 11).3. formulate the elements of the organizations culture that will lead to similar failures in the future. Lack of focus and clarity in the vision whitethorn bring problems for the company in the future as well. Similarly, overconfidence in having physiological locations may overshadow the future planning once again. The leadership must look into the fact whether the video store locations in different part of the country are a benefit or a disadvantage. It may be very difficult to let go those locations, but if it is the full thing to do keeping in view how consumers want movies and games therefore the company should get rid of those locations.Thoug h the company has new management after it was taken over by Dish profits Corporation, the mission statement still attracts critics. Commenting on Blockbusters future, Levy (2010) argues that the companys mission statement has competing priorities. He points out This muddled vision (officially the corporate mission statement) provides no clear guidance against which various corporate managers can test their ideas and initiatives. Drop prices? Its in there. Raise them to trail our depth? Its in there. Compete with Netflix? Its in there. establish brick-and-mortar high-monthly-nut locations? Its in there. Make money? Oops, thats not in there. (para. 6)The new leadership at the company seems to recognize the reality and wants to let investors and other stakeholders know that it is evolving as the media entertainment industry is transforming. While transforming and diversifying its store-base continues as a company priority, BLOCKBUSTER now offers convenient access to media entertainm ent anywhere and any way consumers want it whether in stores, by mail or digital download (Blockbuster Corporate, 2012).4. Recommend specific actions the organization can take to prevent future failures from occurring. First of all, it should keep an eye on technological advancements that are happening at a very fast speed. It will allow the company to feel the pulse of what is going on and what might occur down the lane. The company should hire a headland learning officer in order to progress to learning an inviolate part of the organizational culture. At the same time, by developing a culture of learning will help the company adjust to changes and challenges that may be thrown at it. As Philips (2011) mentioned in his book, Blockbuster has to attract sure events taking place within the organization and outside the organization should not come as surprises.He advises that learning and changing at a required pace is necessary for organizations. Moreover, if the company believes physical locations still make the company a leader it should build a whimsical culture of customer service so that people crave for Blockbuster visits. Philip (2011) reminds policy makers that Just as history is not made by great men alone, so companies and countries dont go bust just because one or two people chase the breathing in too hard. They need a support staff (p. 59).Since Dish Network has its own subscribers, it should attempt to attract additional customers through combinations of Blockbuster-Dish Network offerings. Similarly, the company should not underestimate other companies just because they are startups. Actually, there may be reasons to learn from new business models in the industry. Woloszynowicz (2010) informs his readers that Netflix was not a success in the beginning as its IPO dropped from $15 per trade to $6 per share after it was launched. On the other hand Blockbuster leadership interpreted slide in Netflixs share as a failure and thought the company is not going to make any difference in the industry.ReferencesBlockbuster Corporate. (2012). Company Overview. Retrieved January 17, 2012, from http//blockbuster.mwnewsroom.com/Company-Overview Greenberg, J. M. (2008). From BetaMax to Blockbuster picture stores and the invention of movies on video. Boston, MA MIT Press. Levy, S. B. (2010, September). Blockbuster Goes Bust Outfoxed by Redbox, shell by Netflix. Retrieved January 17, 2012, from http//lexician.com/lexblog/2010/09/blockbuster-goes-bust-outfoxed-by-redbox-licked-by-netflix/ Netflix. (2012). A brief history of the company that revolutionized watching of movies and TV shows. Retrieved January 17, 2012, from https//signup.netflix.com/MediaCenter/ TimelinePhillips, T. (2011). Fit to bust How great companies fail. Philadelphia, PA Kogan Page. Rayburn, D. (2009, July 16). Ten Years Later, Blockbuster Still Lacks A Digital Media Strategy (BBI). Retrieved January 17, 2012, from http//blog.streamingmedia.com/the_business_ of_onli ne_vi/2009/07/tens-years-later-blockbuster-still-lacks-a-digital-media-strategy.html Senge, P. M. (2006). The fifth discipline The art and