Corning Glass Works: Electrical Products Division

CORNING GLASS WORKS: THE ELECTRONIC PRODUCTS DIVISION (A)

Nowadays, the changes in the organizational structure has become a commonly wide practice across companies. Fast-tracked industry trends, escalating rivalry among competitive companies, growing market, company expansion and the like, has shaped companies to align its objective to survive this kind of shakeout in industry. Change is inevitable and is felt across the company. The need for change is essential to overcome challenges that the external and internal environment is pushing unto them. These factors triggers the desire of companies to change. A fierce competition for example, can make an impact on companies to produce unique offerings – lowering prices, innovative development, etc. - to be able to sustain its share in the market. Continuous rivalry can affect profitability and stability of company in the market. With this, the pressure from market demand simultaneously upsurges the pressure on the employees to come up with innovative product to sell in the market. Cases like this could hurt corporate culture. Leaders of the company sees the need to realign the objective of the company in response to market demand. Reliance on people’s adaptability to change is also a key for the success of restructure. Overcoming barriers and challenges is indeed a tough phase for the company leaders. Similarly, the case of Corning deals with the challenges on organizational restructure.

Corning Glass Works is a global leader in manufacturing of specialty glass. Its technical knowledge and capability has put Corning ahead of the competition through unique and innovative glass products. Electronic Product Division is one of the eight line division in Corning. It is concentrated on manufacturing components serving several markets that contributes to Corning’s success. Its research and development team also has backed in creating platform for major business in manufacturing of specialty glass items to wide variety of industries. Patents, and technological know-how in manufacturing and the requirement of substantial capital investment increased the barriers for entry into the market. With this, Corning holds a strong financial and profit position for years.

Market trends (External). Corning is successful in producing large-volume of electronic components in the market with its advanced technological knowledge. During early 1950s to late 1960s, the environment surrounding EPD undergone different shift of market needs. First, the growth of space program and increase in reliance on missiles for defense has created demand for highly reliable components. The government’s support to pay premium price for components that meet the strict specifications set, created growth in the market. However, the military market contracted after a decade. From the decline of military market, emerges a new commercial market for color television in electronic products industry. The color sets require more components with more stringent specifications needed than for black and white sets. The growth of data processing industry further provided market for production of high-volume components. In the race of bringing specified product to the changing market, EPD was able to produce unique specified components that meet the demand. It heavily relied its research to innovative tools and well backed expert technical understanding and support. Corning then easily became the industry leader. Its vast stock knowledge on technology enabled them to innovate to keep up with the competition. It promises the progress in developing products that create breakthrough in industry. Accordingly, the several market shifts has molded EPD to several characteristics such as, innovative, large-volume producer and quick. To keep pace with the industry trends, EPD was able to respond to different market needs, from missile nose cones to electronic components in large volumes. The technological advantage extend beyond the products EPD has produced.

A major challenge on late 1960s is the increased demand from OEMs producing numerous end-use products for its growing market and the saturation of the competing firms in the industry. A fierce competition among competitive firms put pressure on price and cost. Instead of producing product with highly specified qualifications with little bargaining power from buyers, the current market has increased number of rival firms. This has caused the tension of price war. In addition, the emergence on integrated circuit poses threat on production of electronic components leading to escalating rivalry for market share in pursuit of survival. The foreseen decline on demand invoked by integrated circuits, hinged further war for price, quality and service for manufacturers. The threat on this changing market poses in EPD to develop extension of existing product lines without compromising the price and cost. In this situation, EPD was caught in the middle of intense competitive pressures within a declining economy. The new market is far different from what EPD has been catering years back. High quality specification were easily achieved because of high reliance on research and development. Conversely, the current market has shift to a commodity-like business with greater demands from customers contained in a fierce competition. The entry of competitive companies already caught up EPD’s success. In addition, pressure on costs were passed on manufacturers from OEMs intensifying the burden on providing an effective surface of innovation with less costs incurred.

Organizational Structure (Internal). Under the supervision of Joe Bennett, the organization culture is focused on growth and expansion of business opportunities. People working under him has become political and manipulative due to his autocratic leadership. Bennett’s and the top level control over mostly the decision and little input from the group. Under this circumstance, it greatly impact members of the team as they too inherent the style of Bennett. Some leaders make their own choices based on their own ideas and rarely accept the ideas of other members. On the good side of it, high expectations of performance and commitment is set. Team leaders become proficient and able to deliver results. However, the flip side when setting high standards in achieving goals, it also increases pressure on teams to give results. This has affected the organization to look only on short-term and react geared toward results. It limits the members to have a vision in creating a strategy in the long run. Further, this aggravate unhealthy competition rather than acting together as a team. Members became competitive and driven in achieving their own personal goals. In addition, authoritarian leadership restricts team members to make complex decisions. There are only minimal chances that the team can contribute their own ideas. Moreover, there are limited cases wherein they can actually create solutions to problems.

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