Essay on An Organizational Failure - Case Study of Blockbuster

1932 Words Jan 21st, 2013 8 Pages
An Organizational Failure: Blockbuster
Rana Fawad
1. Describe and discuss how the organization’s culture facilitated the failure. Philips (2011) believes that success or failure of any great company depends on “Events, internal and external” (p. 3). Blockbuster also appears to be a victim of certain events at internal as well as external level. Based in McKinney, Texas, Blockbuster and founded in 1985 (Blockbuster Corporate, 2012) and it ushered in a new era as far as video rental retail industry was concerned. The company gave birth to video rental places that had significant amount of movies under one roof (the first store had 8,000 movies) and were not associated with bad movies or bad neighborhoods (Greenberg, 2008).
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(Blockbuster’s Mission Statement) The timeline of the company’s existence shows the culture of inaction at the top level delayed changes for a very long time. The company introduced Blockbuster Total Access program aimed at online as well as in store renting as late as November 2006 (Blockbuster Corporate, 2012). On the other hand, Netflix started its journey in 1996 and introduced its subscription service in 1999 and by 2010 it had 20 million subscribers (Netflix, 2012).

2. Apply the appropriate learning disabilities and laws that describe this situation. Like other organizations that hit stumbling blocks, Blockbuster had its hurdles in the shape of certain learning disabilities. One such disability is what Professor Senge (2006) calls ‘the fixation on events’. He writes: Conversations in organizations are dominated by concern with events: last month’s sales, the new budget cuts, last quarter’s earnings, who just got promoted or fired, the new product our competitor just announced, the delay that just was announced in our new product, and so on. The media reinforces an emphasis on short-term events – after all, if it’s more than two days old it’s no longer “news.” (p. 21) Another learning disability Blockbuster may have fallen prey to is ‘the parable of the boiled frog’. Senge (2006)