Motorola

Motorola’s

CEO Edward J. Zander

August 20, 2007

What are the trade-offs that must be considered in making the decision to re-structure in order to best implement strategy as opposed to taking the organization as a given, and developing a strategy keeping structure fixed?

There are many organizations currently operating on business models and strategies that were developed several to many years ago. These models and strategies may work but can they be better? Over the past decade information technology has advanced, e-business models have exploded, the Internet has been on fire, and CEO’s have changed so fast it can make you dizzy.

Should a new CEO of an organization consider a restructuring in order to best implement a strategy for today’s changing business practices or just continue with the organization as given? Before deciding a CEO must clearly consider if this will “improve profitability, improve returns on company assets, lower the organizations break even point, reduce financial and operational risks, and increase shareholder value” (www. solvency.com). To use a health care analogy the CEO must decide if the company is in need of life support (needs a restructuring) or does it just have a simple cold (may just need some business practice changes).

There are several benefits to an organizational restructuring. As a more competitive global economy emerges CEO’s of American organizations must consider implementing aggressive plans to restructure and downsize. They must focus on “cost-cutting efforts, the adoption of new technology and renewed efforts on core products and market strategies” (www. solvency.com).

There are also benefits in maintaining an organizations current structure and just providing some better business practices to improve the organizations operations. The cost in of doing this is remarkable less then a full restructuring, the staff remains comfortable without the fear of drastic change and the business continues without much interruption or interference of a full restructuring.

The CEO must carefully decide on whether to restructure or maintain the current structure of an organization. Overall the decision must lead to reduced expenses, increased profits, improved cash flow, and productivity, increased shareholder value, decreased organizational beaurocracy, increased market share, decision-making, sales, and customer satisfaction.

Which is Zander doing?

In 2004 Ed Zander was elected as Motorola’s new CEO and brought a wealth of experience to Motorola. He had over 25 years of experience in the technology area and was previously the CEO of Sun Micro Systems.

It did not take the Motorola staff long to recognize that Ed Zander was different from their previous CEO. He was known as a “Brash Brooklynite” (Crockett). He was everything the previous CEO was not. He was demanding, expected results, and would hold individuals accountable. His immediate focus was on improving innovation and operational efficiency.

As the new CEO of Motorola Ed Zander needed to decide whether he wanted to accept the company’s structure as is or to implement is own restructuring plan. Ed Zander immediately seen that the company was plagued by employee, quality, and communication issues, financial confusion, and delayed launch dates for new products.

Motorola had many challenges and opportunities. It was “plagued by a slow-moving culture that did not recognize the looming opportunity in converged mobile devices” (Krazit). Zander made the quick decision that Motorola needed immediate and drastic change and was set to restructure the company.

Zander’s vision for Motorola was for “seamless motility.” “Seamless mobility," is a “world where someone can be connected to the Internet in the home, in the office, in his or her automobile, or just walking down the