Management Approaches of Philips toward One Project

Ilyas Muhammad
Principle of Management
MAN-111-02
Management Approach
About the Article:
This article is about Philips which is dealing in electronics all over the over the world. In the article the writer has taken the “Toward One Philips” event as a case study. In 1990 the company was passing through bad situation and financial crisis because of the business declining in all over Europe and even America too. These circumstances led to a major change in the company executive management and Gerard Kleisterlee take over as a new President of the company. The New president as take over the company and started to take some bold decisions for the sake of the company business and improvement. He directly started routines the restructuring steps like non-core businesses, outsourcing unprofitable production and centralizing major functions like Human Resources and payroll were completed. Still he was not sure that this would be the long term solution for the company. He restructured the products from fourteen products to only five products which was indeed a major decision. The new president strengthen the communication and coordination between all of the six departments which improved the activities of the office and the business was also improved. All these decisions helped him in restoring the original position of the Philips and at the end of 2003 he called shareholders meeting and announced that the company has saving of EUR 500 Million as a part of the “Toward One Philips”.
The Management Approach:
Before this new president take over, there was a major problem of decentralization and growth in the company which led to major deficits in the business areas and made it difficult to create interactions across the organization and capture the innovation as the business components was very sovereign.
From the event mentioned in the article, I think the company