Philips History And Development Key Milestone Management Essay

The Philips Company was invented in 1891 by Gerard Philips. By the industrial revolution in Europe, Philips first research laboratory started introducing its first innovations in x-ray and radio technology. Over the years, the list of inventions growing to include many breakthroughs that have continue to enrich people’s everyday lives. Later he started the production of carbon-filament lamps and other electro-technical products in 1892.In 1895,after the certain difficulties, the Philipses brought in Anton, who is his younger brother. Though he had earned a degree in engineering, he first started work as sales representatives soon he began to contribute many business ideas. Subsequent to Anton arrival, the business began to expand rapidly. On the beginning of twentieth century, Philips became one of the largest carbon- filament lamp producers in Europe.

Important developments include the period from

1914-Philips establish research laboratory to study chemical and physical phenomena and stimulate product innovation

1920-the company started to manufacture other products like Vaccum Tubes.

1939-they introduce the Electric Razors namely Phili shaves. In the same year he also develop their positions like radio to short wave radio station by initially they put on Dutch to Dutch East indies, later it extends up to Indonesia. At the mean time PCJJ transmit in Spanish, English & Germany to world remaining places.

1946-two short wave radio stations were normalized and then renamed as Radio Netherland to worldwide. Its first development was at Australia in the year of 1927

1963-introduce compact audio cassette

1965- produced its first integrated circuits

1985- Beijing Philips Co. Ltd was established

B. Key milestones includes:

Philips launched the radio receivers in 1929 and marketing light bulbs in 1930. In the year of 1934, Philips Canada was founded. Its Headquarters was in Markham Ontorio. Philips Hongkong initially opened in 1948.This place is a world Head Quarters of audio business. It has ability in the year 2007 as a sales produce around 200 million lights per year. At the time of second world war Philips trade also bicycles, refrigerator. In 1996 Philips china Head Quarters relocated from Hong kong to Shanghai. In 1999 Philips Investment.Co., ltd. Established. In 2000, the Philips research East Asia established. In 2009- Philips announced the establishment of Imaging system Industrial campus in Suzhou, Jiangsu. In 2010- Philips Acquired apex, a leading medical company, and NCW, a leading professional lighting solution company in china. In 2011- Announced to set up Philips Head Quarters and to build a Lighting Solution Industrial Campus in Chengdu, Sichuan.



Philips is a multi-industry organization. The Major industries includes Philips HealthCare, Philips Lighting, Philips consumer lifestyle & Philips dictation system. Poland is the major place for producing Philips product. This includes financial & accounting center, Philips lighting & Philips domestic appliance. By the same way UK & USA also major places for Philips products trading & production processes. Philips go through definite merger agreement with North America in 2007 which results in leading position .

Philip produces lights , controls & product with associated lighting. It has the company called VISICU Baltimore to produce ICU ward medicine & it used as a concept of Telemedicine .However most of the profits come from just three industries. Consumer products, Healthcare and Lighting.

Healthcare products includes clinical Informatics like Xcelera for cardiology, Intellispace PACS, Xiris for enterprise imaging & various imaging systems includes cardio vascular X-rays, computer Tomography and so on. In Health care, Philips focusing on the people in the care cycle patients and care providers. By combining human insights and clinical expertise, Philips aim to improve patient outcomes while lowering the burden in the health care system. Philips help the patients more comfortable while medical examinations like MRT and CT scans.

Consumer products includes refrigerator, microwave oven, Television, computer, water heater , air conditioner and so on.

Philips lighting is a leading provider of light solution and applications for both professional and consumer markets. whether at home, on the road, in the shopping malls or at schools, we are creating lights that transforms environment. Philips lighting employs approximately 53,000 people world wide. Lighting classified into three types include task lighting, accent lighting and general lighting. Task lighting major concentrated on reading or inspection of material. Accent lighting mainly concentrated on decorative, highlighting pictures and landscaping. Finally general lighting for filling in between two and intend for general illumination of area. And in Indoor lighting like lamb on table or floor, or a fixture on ceiling. In outdoor lighting for parking a lot may be as low as 10-20 lux which need for motorist used to control the dark light while pedestrian crossing.

It has two methods includes up lighting and down lighting. Down lighting is most common, which is used in both office and homes and easier to design. .Although there is some problems like glare and excess energy consumption due to large number of fitting. Up lighting is less common, rarely used to bounce indirect light off the ceiling. It mainly used in lighting application that require minimal glaring and uniform general information level. It gives more uniform light in operation, while indirect lighting get diffused and shadow free light effect it can be regarded as Uneconomical lighting principle. Front lighting also quite common, but tend to make a subject look flat as its cast almost no visible shadows.

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Philips culture is considered one of the most important factors in its development. The culture has had a major impact on both leadership and management. That is demonstrated by organizational behavior. On the beginning of 1960s, Philips of Netherlands undertaken many pioneer job redesigning efforts. In that, three phases can be identified.

First phase was an attempt to improve job satisfaction among employees.

In the second phase, thousands of workers involved in industrial plants. An interesting development was abolition of foreman, and then high level supervisor directly involved in enlarged span of control.

The third phase taking place in last ten years, saw the formation of large number of small, autonomous group throughout the company.

The result achieved under the new system included a 10 percent drop in production costs, decreasing in employee waiting time and improvement in overall quality product. Although the workers initially faced some problems such as adjustment and management to bear the cost of changeover, the improvement in production and intrinsic employees job satisfaction.



1. Leadership:

Frans Van Houten is the chairman and CEO of Philips. He has spent his entire career with the company, joining after graduating from Erasmus University, Rotterdam in Economics. He was born in 26th April 1960 in Netherlands. He held several position in the company, becoming co-head of consumer electronic division in 2002.

In November 2004, he became CEO of Philips Semiconductor, where he led spin-off division, resulting formation of NXP Semiconductor on October 1, 2006. Van Houten left his position as chief Executive Officer, NXP on December 31, 2008.Finally he was appointed CEO in 2010 after the successor of Gerard Kleisterlee.

We can identify main leadership characteristics and traits of key leaders based on leadership attributes such as personality, motives, attitudes, behaviors, values, skills, type and style.


Frans van Houten primary leadership was inspirational

Values and attitudes

Frans van Houten is very hard working combined with defensive attitude or lack of combination to be the best. Houten values such as freedom of information and belief in responsibility of keeping employee suggestion.


Frans van Houten is a typical A type personality

d. Style and Behavioral characteristics

For Houten, leadership style was wake up in the morning thinking about how would like a promotion or a raise in pay or “How I want to change my world in some way”. His best behavior was he see a job as a coach and bring out the best in the people, not necessarily to fix, solve, or change them. Another best behavior is they provide a feedback that helps people to recognize and be able to call this forth in many situation

e. key skills

His main skills are technological, have a degree in Economics.

f .Major reason for success

Several books and many articles have been written defining houten successful career as a manager and leader. From that major reason for the success is, he is mingle with all the staff and identify the strength and weakness. Accordingly he allotted the works for staffs and subordinates and make the work very effective and efficient manner.

g. Motives

Frans van Houten’s Key motives is Mastering the Innovation and Shaping the Future. “Mastering the innovation” initiates that the semiconductor industry in Europe has a chance to take control over its destiny once more and that its competitiveness has not been lost to globalization.

“Shaping the Future” means understanding the structuring importance of this industry in the economy, in intellectual capital creation and for excellence of the academic research.

2. Describe and analyze the organization and management using following attributes

a. Vision, mission and values


For Philips, we strive to make the world healthier and more sustainable through innovation.


We improve the quality of people’s lives through the timely introduction of meaningful technological innovations.


Delight Customers, Develop peoples, Depend on each others, Deliver on commitments.

b.goals,objective and overall strategy:


Our goal is to improve the lives of 3 billion people a year by 2025

We will be the best place to work for people who share your passion.

We will deliver superior value for our customers and shareholders.


In Objectives, the key objectives are Work Objectives, Writing Objectives, Employee Objectives, Career Objectives.

Work Objectives:

The objective of the Organization is “to conduct research and generate action to prevent and end grave abuses of human rights and to demand justice for those rights have been violated.

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Employee Objectives

The employee objectives of the organization are sharing of Knowledge, Recognition and Intrinsic motivation, collaboration and inspiration

Career objectives

The career objective of the organization is to contribute high-level assurance


We will increase profitability through re-allocation of capital towards opportunities offering high returns and our core competencies in Health care, lifestyle and technology to grow in selected categories

Geographies build partnerships with key customer, both in the business-business and business-consumer areas.

They continue to invest in maintaining world class R&D and leverage our strong intellectual property

Portfolio strengthen our leadership competencies drive productivity through business transformation and operational excellence

Philips products can be taken to foreign without change but on other side most foreign product breakdown have come from short of product adaption.

It has straight expansion which mean to introduce a standardized consumer with same sponsorship strategy all over the global market.

Their slogan is Sense and Simplicity.

In Philips, Based on strategy they are four types. They are Product strategy, Pricing strategy, Distribution strategy.

Product strategy:

The product is branded as wake-up light. The name differentiates from ‘sunrise alarm clock’ and ‘progressive alarm clock’. The strategy aims to position Philips as the first segment in Wake-up lights, although sunrise alarm clocks perform similar or the same function .

The Wake-up light already available in France and Germany. Now expected in other European countries. The devices offered as two models. They are basic-HF and premium model with more natural sounds and with digital FM radio. Wake-up sounds are available such as friendly wake-up beep, 3 natural sounds such as morning birds, seashore and pond. The user can also mute the sound immediately. The devices has proven healthy benefits, certified by Medical Device Directive(MDD).

Pricing Strategy

The strategy follow the practice of ‘price skimming’ in French and German markets. It involves charging a relative high price for short time where this innovative and much improved product from other lamps in already available countries such as US and Canada.

As a result, the company will skim off customers who are willing to pay more for product sooner; prices are expected to be lower when demands from early adopters falls. Retail price in France and Germany offering additional features. This will enable Philips to meet company expectation to achieve 10-12% margin of lighting products

Distribution Strategy

The strategy was hyper market growing fast in Italy was expected to increase in market share in smaller electrical appliance sector. They distributing the wakeup lamp giving the opportunity to customer on daily basis.

Competitive Strategy and Advantages

Philips has competitor in each and every sectors. In male dry shaving its main competitor is P&G BARUN. In Power Toothpaste its major competitor is P&B Oral-B. For Mother and Childcare its important competitor is Energiser Playtex. For DVD player its major competitor is LG and DVD portable its key competitors is Sony and Food preparation its major competitors is Denloghi, KENWOOD. In light bulbs Philips major competitors are Sylvania and General Electricals.

Major Competitors of the Philips company are General Electricals, Citigroup, Siemens. In these they are some indirect competitors like Barun, automotive industry. In Future they are some competitors like Babylisis, Carol, Chinese Brand. Their Competitive advantages are mainly based on two type of advantage. They are Cost advantages & differentiation advantages. Apart from that, Philips unique Competitive advantage is the combination of our powerful global brand, our insightful understanding of people, Our extraordinary competence in technology and design, and the many synergies with the channels, partners and supply chain.



Philips is a market-driven company with an organizational structure that reflects the need of our customers. The needs operate in three main sectors. They are Healthcare, lighting and Consumer lifestyle. A fourth sector, Innovation and Emerging Businesses, contain Philips Research, Philips Design and all supporting departments


Philips establish autocratic management style, with a tradition of taking care of their workers from cradle to grave.


The main systems that run the organization are financial and HR system. other systems that include communication and document storage.


The Philips organization believe their staffs opportunities and his own opportunities. They consider the better staff can develop their own talent, the more both they and we will grow. So they constantly encourages their employees to make more of themselves and to find ways in which you can excel.

The Organization need to fill their staffs in dynamic Healthcare environments with latest clinical procedures and technologies. Staffs comprehensive education program is designed to support clinical excellence, maximize use of advanced system features and capabilities.

The Organization instill physician confidence in quality of exams, optimized workflow and staff productivity, and foster professional growth and teamwork. Ultimately to deliver their best health care experiences for their people. For their patients-they help to provide their best possible patient environment. For their people-they help them to develop more motivated and skill personnel. For their equipment-they help them to maximize their performance their equipment throughout every stages of their life.

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The Philips Organization well organized with strong project management skills and ability to prioritize their own ideas.

Other Issues:

a. Describe the organizations international strategy. Describe how they manage cross cultural issues.

The Philips Organization’s international strategy is based on global demographic and environmental trends, such as aging populations and rise of chronic diseases like congestive heart failure, breast and other cancers, respiratory and other coronary artery disease will require a fundamental shift in the way health care is provided.

Another strategy is Overburdened hospitals with limited resources and challenging financial circumstance will be difficult to care effectively for increasing long term patients with chronic ailments such as sleep disorders and heart diseases. New solution should be found.

Consumers are looking for solution that them to maintain and improve their health and well-being and for their families. By combining global consumer centric technology and local business creation capabilities we are able to harness our global innovation power that will deliver meaningful innovation that meet local consumer needs.

More than 50% sales of Philips Sonicare toothbrushes can be attributed to endorsement by dental proffesionals.

The professional lighting strategy changing fast driven by energy efficiency, the LED light innovation and focused on application based lighting solutions.

Describe how power is used in the organization and how it is shared. describe the internal politics. how are conflicts are resolved?

Power is highly centralized by Corporate headquarters.

Describe the main communication processes.

Like most large, international companies, Philips use a wide range of communication process. The style of communication determined by the CEO, Frans Van Houten. They are formal communication, which are used to communicate upcoming strategy to divisional managers. communication must be very formal defining all business processes. In this company, the communication approach is top down approach. That is information flow from high level managers to lower subordinates.

What is the importance of being a learning organization? How is this demonstrated?

Describe their policy in handling ethical issues. Give at least one example of resolving a major ethical issue

The company has very ethical guidelines. The company brought the Comprehensive guidelines modeled on EEU for ethical behavior. According to EEU laws and regulations, the European Court of Justice(ECJ) has decided that HMRC’s attempt to stop Philips UK claiming group tax relief on losses transferred from domestic permanent establishment(PE) infringed EU law.

Today’s court judgment was Philips Electronics UK is entitled to include in its taxable basis losses suffered by UK branch of LG Philips display in Netherlands.

Philips Electronics UK wanted to use 64 million Euros of losses sustainable by UK resident branch to reduce its own corporate tax base for years from 2001-2004.

LG NL, the parent of Philips UK branch company is considered to be a PE under the UK Netherlands tax treaty.

Though the Philips Electronics losses arose in the UK, HMRC argued that they could not be transferred to Philips UK because of the possibility the group also attempt to use the losses in Netherlands.

C. what are the major strength and weakness of company leadership, management and OB

Philips management major strength was in research and innovation of new optical storage technologies, key components like optical pickup units and IC chipsets. Philips has capabilities to set standard together with industrial partners. To strengthen a position in dynamic optical storage PC markets, Philips formed last year with BenQ, a join venture called PBDS (Philips BenQ Digital Storage) to accelerate product development and high volume manufacturing in Asia.

Philips management major weakness was operates in fields where competitiveness is very concentrated. However it has strong customers base, it should not underestimate the emerging customers, it should keep up with new trends and updating the existing products , actively listen new proposal from customers.

Another weakness is that Philips employs a huge number of people which work in variety of different countries. Therefore the organization experience some problems in sharing information between employees and controlling operation of different business. These are the weakness of company management.

Make significant recommendation for improvement

I suggest some recommendation to Philips to adopt successful operation

Drive consistent and cost effective learning standards across Philips lighting. Make recommendations for improvement to learning process, design and implementation. Prepare and launch a communication plan to involve and excite learning practitioners, business and HR leaders.

Consider culture and behavior changes required among learning practitioners, leaders and learners to achieve learning strategies.

Apply latest Lighting development trends and learning expertise to design effective learning and development activities to achieve business outcomes.

A Philips launch a beautiful lamp that shines in all colors of rainbow. Create the mood in your house you want.

Develop effective learning and development strategies to achieve business goals.

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