Corning Glass Works Essay Example

fluctuations in short-term lifecycle products for end users, this company has maintained a stable market and market share, giving them a competitive advantage for an extended period of time. Their customers are primarily OEMs and distributors in the component market, who require a range of high-quality products at low prices with efficient service, including fast delivery. However, EPD's capacities do not align with customer demands, due to changes in the external environment.

EPD's customers in 1950 were mainly from government projects related to space programs and missile defenses. These customers demanded highly reliable components, and EPD was able to meet those specific needs due to their R;D and manufacturing capabilities. Over time, the military market decreased, leading to a shift in EPD's customer base. By the 1960s, EPD had gained new customers in the commercial market, specifically in consumer electronics (TV), data processing, and telecommunications (telephone market).

The new market demands low prices, a diverse product line, quality, and efficient service, including quick delivery. Additionally, the passive component market differs from military needs since it is less volatile and unstable. These products have shorter life cycles than other CGW products, and end user requirements frequently change.

Technology advances quickly, making it challenging to stay ahead in the market. EPD lacks key KSFs such as cost-competitiveness and fast product introductions. To remain competitive, EPD must address maintaining market share and developing new products. The emergence of integrated circuit technology poses a threat to the component market, causing it to decline as this technology grows.

EPD has implemented proactive measures to safeguard its market share against rivals and upcoming participants. As a result, in the current market scenario, EPD requires

to focus on cost-cutting endeavors and transform its business model into low-margin but high-volume business. This entails modifying its evaluation system, where the plant must retain a minimum of 40% of gross margin. Moreover, introducing new products in the market is imperative to acquire a fresh revenue source. However, EPD has not yet devised clear strategies that can be shared with its employees.

Regarding EPD's structure and HRM system, various problems exist. In the past, EPD had a divisional structure, with only two divisions located outside of Corning, NY. Once Don Rogers became division manager, he relocated many sections to Corning, resulting in communication issues between departments.

The lack of suitable marketing talent is an issue for both EPD and CGW, which are product-focused companies. Within EPD and CGW, marketing and sales are not valued as highly as R;D and manufacturing, and many of the company's top executives were promoted from manufacturing. Additionally, the evaluation system poses a challenge as different sections are evaluated based on varying criteria. For example, plant performance is measured by profit margins.

The plant's target gross margin is 40%, while for Sales, sales volume is crucial. Despite EPD having a distinct market situation, it shares the same objectives as CGW, with an expected annual growth rate of 10%. However, EPD has failed to establish appropriate goals and strategies for building a KSF (Key Success Factor) in the market, including cost-competitiveness and new product development. Even though cost advantages and new product development are essential objectives, they have not been defined as strategic goals.

An inappropriate structure and HRM system has caused conflict among EPD's functional departments. Each department is pursuing its own

mission, leading to a lack of cohesion. Additionally, EPD lacks effective leadership. Despite seeking out new business and generating excitement, the entrepreneur Joe Benetto is not skilled in empowering or coaching employees, particularly middle managers. While he is interested in the behavioral sciences, he falls short in utilizing this knowledge to maximize employee potential.

In contrast to those who lead, Don Rogers is considered to be a sociable, intelligent, and informative person who enjoys engaging in discussions and sharing his views. However, he does not provide direction and motivation to guide others towards a specific objective, making him seem more like an observer than a leader. In such unstable circumstances, a "Directive Leadership" approach based on the Path Goal Theory is necessary to provide leadership. This means that the leader should establish clear goals and enable people to accomplish their tasks.