At the time mobile phones were introduced to the world Motorola was a leader of cell phone business world. It was an American company founded on September 25, 1928. In 1998, it became a leading designer and manufacturer of cellular phones and many other communications products and systems. The company was the second largest Mobile phone manufacturer at that time.
They introduced one of their famous mobile phone series called ‘Razr’ in year 2004. It marketed as an exclusive fashion phone and it was highly successful product of Motorola while creating powerful market for Motorola products. Then Motorola was focusing on shaping physical appearance of phones rather than enhancing customer experience. They did not move to smartphone concepts, they missed the movement to 3G, they stopped innovating new products as well as they did not focus on user friendliness of the phones. Motorola keep on enhancing physical features of Razr phones while other competitors such as Nokia, iPhone, Samsung was entering to the market innovating new mobile phone providing high user experience.
- Motorola’s market shares fell more than 90% from $107 to $13 from October 2006 to March 2009.
- Motorola lost the demand for their products
In your view, identify the low-prioritized or overlooked "cardinal decision issues" that acted as significant contributors to the negative outcomes?
- Need Issue
Need issue is about deciding whether a decision should be made. There are two ways that making a decision can go wrong regarding need issue. First one is everyone in the company fails to decide when there should have been a decision and second one is somebody in the company makes a decision when there is no requirement for decision effort. According to our scenario Motorola has failed to make right decision at the right time. Motorola failed to exploit their opportunity. Motorola did not get the decisions such as being innovative, movement with current technologies and enhance user experience at the right time. So Motorola failed at the first point of the decision making framework.
- Options Issue
Option issue is about different actions that can take to deal when problems are occurred.
At that time,
- The demand for Razr phones were increasing
- Their biggest customer was requesting not to move to 3G
- The industry was moving towards the 3G technology
So the Motorola had options with regard to above three points. But according to the inclusion criteria
[Concern the demand for Razr phones, Respond to the demand of their customer]
They had not included the upcoming trends in the industry to their inclusion criteria. So the superior alternative has been missed by them.
But in the waste criteria
[Concerning the external appearance of Razr phones]
However they had many options
- Continuing physical appearance concern of Razr phones
- Respond /not respond to the demand of their biggest customer
- Adapt /not adapt to the current industry trends(3G)
According to the waste criteria, Motoralla wasted their time on enhancing physical features of Razr phones. On the other hand they did not consider the ideal alternative or at least ones close to it. According to above scenario motorolla would have to take so many other options at the right time. Instead of that they took the ineffective solutions by improving physical features of Razr.
Possibility is about identifying positive and negative outcomes of different options that came across Need issue. Motorola had not clearly identified the possibilities of the options they had. If they had they should have been recognized that calamity before they met it.
Continuing physical appearance concern of Razr phones
- They demand for Razr phones may increase further
- Will increase profits
- May strong the base of customers
- May miss the internal software developments
Respond /not respond to the demand of their biggest customer
- Secure with their biggest customer
- Lose other newborn customers
Adapt /not adapt to the current industry trends (3G)
- Increase/ decrease profits with new technologies
- May move with the industry
- May add/lose customers
- May isolate /prominent in the industry
- Judgement Issue
Judgement issue is about which of the possibilities that they care about actually would happen if we pursue that option. Decisions are taken considering the predictions, opinions and projections. So that evaluate their accuracy is very important. Before taking a decision we can have several options. Those options should be evaluated before making the decision. According to the above scenario, if Motorola had several options they could have selected a good decision and taken it. Since they had not proper judgement over available options they failed to make the right decision.
What changes in company practices would greatly reduce the chances of similar failures in the future?
Motorola should establish the decision making practices inside the company to overcome similar failures in the future. First they need to practice to identify a need for a decision. Being oblivious is not enough for a company like Motorola survive in the market because there are number of competitors in the market. They need to follow approaches like vigilance to exploit their opportunities and avert the calamities.
Since decisions are shaped up by predictions, opinions and there is need of proper judgement to evaluate the accuracy of a particular decision. Motorola should establish decision practices to evaluate the accuracy of their decisions. Motorola can get help of consultants to judge the correctness of decisions. Accuracy is also depending on the number of consultants participating in the process since they are providing different viewpoints.