KodakEastman Kodak1 Since George Eastman first started the company at the turn of the last century, Eastman Kodak has been one of the most important corporate citizens in the Rochester, New York, community. Over the 1900s, Kodak developed a reputation as one of the leading proponents of welfare capitalism. In fact, the company maintained its reputation for paying high wages and providing lifetime job security into the 1980s. However, during the 1980s, the company embarked on a diversification and acquisition strategy by purchasing Sterling Drug Company and expanding into a wider range of products, such as office copying machinery. Increased competition in its film and camera markets and the subsequent loss of market share led to the replacement of CEO Kay Whitmore with the former CEO of Motorola, George Fisher. Kodak’s case study tells the story of a long-standing company with a reputation for social responsibility earned through its community activities, its implied commitment to lifetime employment, and its high-wage and comprehensive fringe benefit policies. A highly integrated firm, it also performed all of its own R&D, manufacturing, and sales functions. A business press article in 1998 echoed the investment community’s criticism of the company for maintaining this integrated model too long: Many of Kodak’s problems stem from the company’s remarkable success in the century following its founding in 1892. Unfortunately, as the world changed rapidly over the past 20 years, Kodak remained stuck in its illustrious past. Other world-class companies were adapting to the new realities of business by forming corporate partnerships, joint ventures and close relationships with suppliers. Yet Kodak always took its founder’s slogan, ‘You press the button and we do the rest’ much too far. The company insisted on preserving its self-reliance to the point of making its own