A Brief history
1892
1899
1900
1912
1919

Founded in Holland
Products exported to Japan, Canada, Brazil, Russia, Australia
The 3rd largest light-bulb producer in Europe
Built sales organizations in US, Canada, France
An agreement with GE
-- from highly "centralized" to "decentralized"
-- autonomous marketing companies

A Brief history
1930's The Great Depression, trade barriers & high tariffs
-- built local production facilities
World War 2
-- top management to US, research labs to England (R&D)
-- 14 product divisions in Eindhoven, Holland (PDs)
-- built national organizations (NOs)

Reorganisation of Philips

1970s

Competitors’ centralised production facilities
Avoid duplication and increase efficiency

Decentralised
PHILIPS Destruct structure •

Decisions made by subsidiaries

•

Different individual product line

•

Autonomy in national organisation

High cost

Reorganisation of Philips

1990s
Boonstra

A plate of spaghetti

A neat row of asparagus

7 Global Business
Divisions
21
Divisions

=

Responsible for
- Global product development - Production
- Marketing

+

Digital Revolution
＆
Low­cost areas

Reorganisation of Philips

2008

2015

3 Global Divisions
1.
2.
3.

2 Global Divisions

Health Care
Lighting
Consumer Lifestyle

1.
2.

Healthcare &
Consumer Electronics
Lighting

CEO
Heads of Divisions

National Organisations

Local sales + Market efforts

Philips
Organisation structure

Current organisation structure (2014)
CEO of Royal Philips
• chief strategy innovation manager
• Legal officer
• Human Resource officer
• CEO of consumer lifestyle
• CEO of lighting
• Chief Financial officer
• CEO of china
• Chief market leader

Philips structure of lighting product division in Australia & New
Zealand

Stages model
This model focuses on
Foreign Product Diversity
Foreign sales as a percentage of total sales

Philips company with regards to the stages model
Philips is currently using worldwide product division structure
High foreign product diversity
High percentage of foreign sales
Aims to move to global matrix structure

Stage model analysis
High
Philips
Strategy

Foreign
Product
Diversity

Low
Low

Foreign sales as a percentage of Total Sales

High

Integration-Responsiveness-learning
Framework
• 1980's Philips used to be a multidomestic decentralized federation.
• Responded quickly to local needs and over dependent on the local supply.
• Presently, Philips moved towards transnational completeness by gaining greater control over manufacturing and R&D with central product divisions.

Further Integration by Subsidiaries learning from each other.
• High inter unit learning by encouraging the senior managers to work at different locations and in different product divisions

IRL Framework

Pressures of