Chat with us, powered by LiveChat Which schools of management thought are illustrated in the case? What caused Norton to decline in the very market it dominated for so long? Using this case and 3M's - EssayAbode

Which schools of management thought are illustrated in the case? What caused Norton to decline in the very market it dominated for so long? Using this case and 3M’s

  • Which schools of management thought are illustrated in the case?
  • What caused Norton to decline in the very market it dominated for so long?
  • Using this case and 3M's history, what do you think explains 3M's success over its rival, Norton?

The Norton Company Versus 3M    While its young, small competitor, 3M (originally Minnesota Mining and Manufacturing  Company), was struggling for survival in the early 1900s. The Norton Company, a manufacturer  of industrial abrasives, was prospering nearly ten times larger. By the late 1940s, however, the  two companies were approximately equal in size. By 1990, 3M dominated several industries  and had revenues more than ten times greater than Norton's. A large French company,  Compagnie de Saint‐Gobain, acquired Norton that year.     Born during the classical school of management thought, Norton had built a tall bureaucratic  structure to house its product divisions and its many staff managers who churned out detailed  reports to aid the company's in‐depth controlling and planning efforts. Its upper‐level and  middle managers built "increasingly sophisticated systems as the lifelines that linked them to  their distant…..operations…." Decisions were made at the top (requests for spending of $1000  or more required the board of directors' approval and the company became increasingly self‐ satisfied and inflexible. It had ceased, for all practical purposes, to actively sense the need for or  to initiate change.     Beginning in the 1940s and into the 1960s, the quantitative and systems school of management  thought were warmly embraced by a number of large and small U.S. firms. Norton among  them. "No company participated in the (quantitative) managerial revolution more  enthusiastically than the Norton Company….." The company adopted a variety of quantitative  methods, including computer modeling to focus on the best ways to expand its existing product  lines. It decided to acquire several existing companies in its industry and to continue profit  maximization efforts for its several original product divisions. It did little, however, to enter new  markets or to develop new product lines.     As the abrasives market began to mature in the 1950s, Norton's response to lagging sales and  profits was to focus on reducing costs and becoming more efficient. "During the late 1950s,  Norton made a few feeble attempts to branch away from the maturing abrasives market, but  most of these were thwarted by lack of resources and institutional encouragement". Unlike 3M,  its attempts to diversify were concentrated on acquiring companies ‐‐ to buy its way into new  directions. Throughout the 1970s and 1980s, 3M continued to evolve into new…arenas by  encouraging individual initiative. Norton, in contrast, relied primarily on studies and planning  models handed down from its consultants. If Norton was (a definitive example) of a systems‐ driven company, 3M (was a definitive example of) a people centered entrepreneurial model.  That model is essential to competing in today's postindustrial (information‐centered), global  markets.   

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