3M's Organizational Culture

            
 
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Case Details:

Case Code : HROB022
Case Length : 14 Pages
Period : 2001 - 2002
Pub Date : 2003
Teaching Note : Available
Organization : 3M
Industry : Mining and Manufacturing
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Excerpts Contd...

Rewarding Innovation

In addition to recruiting innovative people, creating a challenging environment for employees, and encouraging a culture of knowledge sharing, 3M also focused on rewarding employees.

To encourage the spirit of innovation among employees 3M realized it was necessary to reward them appropriately. The dual ladder career path adopted by 3M, created two career ladders - technical and management.

This approach allowed even a technical person to get promoted to the vice-president level without taking on managerial and administrative responsibilities...

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

Culture Overhaul

By the late 1990s, 3M's growth rate started slowing down. According to reports, the stock price of 3M dropped from $83.00 in 1996 to $71.13 in 1998 and the price-earning ratio (P/E ratio) of the company also declined considerably (Refer Table III).

It was reported that during 1995-2000, earnings per share grew at an average of only 8.8% and shareholder returns fell far behind Dow and the S&P 500. Analysts felt that 3M was unable to respond to market conditions. Commenting on 3M's performance during the decade, Bob Burgstahler (Burgstahler), chief of Business development, said, "We have not produced elite results that correspond to the view that this is an elite organization." In December 2000, 3M announced the appointment of James McNerney Jr. (McNerney) of General Electric as its CEO. For the first time, an outsider was appointed as CEO of 3M. The stock markets responded positively to the appointment of McNerney and 3M's stock price closed at $120.50, the highest in the decade...

Exhibits

Exhibit I: Breakthrough Innovations at 3M
Exhibit II: Income Statements of 3M
Exhibit III: Mechanisms Stimulating Innovation at 3M
Exhibit IV: Rewards & Recognitions at 3M
Exhibit V: Initiatives Launched by Mcnerney


 

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