Case Study of Lego Term Paper

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Stability means life. People, businesses, and organizations usually attribute change to a type of death where the old way is gone and the new way takes over. Although some may view change as good, change is inevitable. Change is unplanned or planned and is often a response to forces and pressure. Many types of change exist within organizations from transitional to developmental and even transformational change. In order to implement change within an organization, those willing to undertake such tasks must be visionary, implementing sound strategies. Such strategies enable growth and change even when employees may struggle to accept change or resist it.

Often one sees forces for change from several key areas such as customer focus, technology, and/or globalization. If there is a demand for change or a recent trend, this may supply the seeds to alter things within an organization. A good example of this is the Lego Group. The Lego Group had to undergo changes because of the decreasing demand for traditional toys. Electronic games demand grew while traditional toy sales dwindled. In fact, the retail sector began consolidating into major stores leading to outsourcing to Asia. This then created downward pressure on pricing. Adding to this, Lego's patents started expiring.

The toy company then took action and through several sophisticated steps, altered its innovation system leading to more effective turnout. Some key differences were selling off company assets, reducing headcount, and outsourcing production. These steps reduced cost for Lego as well as limited the amount of people and resources in the company. Sometimes downsizing enables growth or sustainability within an organization. Some may say these steps were innovative.

CEO's often view innovation as a means of leading into corporate success. However, what is business innovation? Business innovation refers to the formation of substantial new worth for consumers and the business by creatively altering one or more scopes of a business system. To consider business innovation, one must imagine new value, not new things. Furthermore, innovation comes in many forms and is systemic.

There are twelve dimensions of business innovation. The first is platforms or areas to promote and implement change. The second is offerings. The third is solutions as organizations often promote innovation because of a problem needing to be solved.

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The fourth is customers and the fifth, customer service. Since innovation is about increasing value, the sixth is value capture.

Number seven is organization and eight are the processes involved in the organization. These processes are normally altered in some way to incorporate an organizations much needed change. The ninth aspect is supply chain followed by presence and networking. Much as Lego began outsourcing, this led to a different source for supply chain. The last and twelfth is brand. Organizations leverage a brand into new areas.

Companies, organizations, they must adapt to change because things and markets often become unstable. Such powerful forces make organizations and companies alter strategy like new economics or even more intense, disruptive change. Disruptive change like lawsuits and changes in laws may force a company or organization to change drastically their business model or product quickly. However, certain things always remain constant such as the social responsibility of a business. Any successful business puts customers first.

In conclusion, change is inevitable however, what changes is it depends on the environment and society in general. Things like terrorism will not destroy what makes a global civilization. Society will destroy itself. Biophysical system remain what social systems are dependent on and technology can never fix social dilemmas. If a global civilization is unsustainable, it cannot be made viable.

Jorgen Vig Knudstorp, a Danish economist and the man who saved Lego explained early on in 2003 how Lego would get of the hole it dug itself. Lego got itself into a pickle beginning in 2000 when the company experience a loss of DKK 831m and had little to no growth the subsequent year. Essentially Lego lost $100 million based off revenues of $1.2 billion. Along with losing revenue, Lego lost focus. The company took on wasteful initiatives like wristwatches among other lifestyle products while not improving the quality of its core business.

When Knudstorp took over, he decided changed needed to happen sooner rather than later. "Knudstorp felt the company had lost its way and had no clear idea of who it was nor what products it should offer. It was clear to everyone that changes were needed" (Jick & Peiperl, 2003, p. 4).….....

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