How did the information systems and the organization design changes implemented by
Knudstorp align with the changes in business strategy?
Lego toys were outdated in the present entertainment world with the arrival of modern entertainment devices such as PlayStation etc. In 2004, Jorgen Vig Knudstorp was appointed as the new CEO to overcome the company's failure. He devised strategies in changing organization design and information systems which helped the company see profits within a span of five years. He encouraged architects to reuse components in new products which helped in sparing huge costs to the company. They created product strategy for adults and designed a line of Lego's aimed at girls thus attracting new customer segments. With a strategy to broaden their products they created products based on movies and also created animated Lego characters based on Hollywood movies. They engaged with online communities and blogs featuring Lego creations and embraced the communities who believed Lego as a way to create art, rather than simply building a toy( (keri E Pearlson)).
With the competition very rapid in the market and to obtain profits, the culture within the organization changed a lot. Previously, the organization focused more on innovation and creativity but that changed when knudstorp made clear that results i:e profits was all that mattered. There had been a drastic change in the organizational structure too. Lego switched its employee pay structure and incentives were offered for appropriate product innovation and sales. Development time of components dropped by 50 percent and some of the manufacturing and distribution functions are shifted to lesser costly locations to cut the costs. However, the focus on the quality remained the same.
As the business is growing, It puts strains on Information Systems. Information Systems allows companies to