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Creativity in the Printing Industry: The Context of Organizational Change
Area: Processes, Productivity, and ProfitabilityDocument # PICRM-2008-02
The printing industry is undergoing numerous changes. The advancement of digital technologies has profoundly impacted the ways in which information is conveyed to consumers and has given people the ability to produce documents on their own, thereby limiting reliance on traditional print companies. As an example of this phenomenon, Freeman and Rothenberg report on decreasing demand for traditional print products, citing statistics from the Newspaper Association of America that mark a decrease in newsprint consumption of 14%.
As a result of these changes, printer device manufacturers are developing new technology that would make printing more efficient and cost-effective. Similarly, in response to these changing market trends, print suppliers are attempting to reposition themselves as a communications or marketing partner/service provider as opposed to solely a print or commodity supplier. Becoming a marketing partner or communications company involves going beyond taking print jobs to offering a wide range of print products and marketing solutions to consumers. Thus, printing companies-manufacturers and suppliers alike-are striving to grow and sustain creativity and innovation to keep their competitive advantage in an industry faced with many challenges. The chairman of the board of one of the companies studied described the environment in this way:
It becomes a challenge as you define your role as something more than providing a product or service where a decision has already been made for it. Our industry, the printing industry, the graphic communication industry-you almost can't read an article anymore that doesn't state how important it is that you become a strategic partner with your customer. You need to be available to properly represent your product or service--and modify it to meet the needs of the customer.
Organizations routinely use mergers and acquisitions to both grow and enhance innovation. Not surprisingly, merger and acquisition activities within the printing industry have increased dramatically in recent years. In the first half of 2004 alone, there were 275 mergers and acquisitions within the industry. A number of the high-profile merger and acquisitions were aimed at providing service or product innovations. Thus, one of the ways printer device manufacturers can develop new printing technology is through merging with or acquiring companies that have a desired printing technology or the knowledge base to develop one. An example of this is Xerox's acquisition of XMPie. XMPie is a software company, and the acquisition allows Xerox to deliver to customers software that addresses even the smallest niche without ever having to develop software itself. Another example is Hewlett Packard's 2005 acquisition of Scitex, which was conducted (at least in part) to gain a propriety ink jet delivery technology.
Similarly, print suppliers also rely on mergers and acquisitions to acquire the ability to provide wide range of print solutions, related products, and other marketing solutions across various printing mediums. For example, RR Donnelly purchased Moore Wallace, a Canadian-U.S. printer, in 2003, creating the largest printing company in the world. Donnelly's portfolio is enhanced by Moore Wallace's business documentation, forms, and direct mail offerings, and will help provide the company with the opportunity to offer the world's leading companies a comprehensive suite of print and related products and solutions.
In summary, changes in market demands within the printing industry have made mergers and acquisitions an attractive option for top-line growth by spawning innovation and creativity. However, there is little research that helps us understand how mergers and acquisitions influence creative processes within the firm after the merger or acquisition occurs. To address this lack of research, this study looks at the effects of mergers and acquisitions on creative engagement within two printing companies.
Download the full monograph.Tags: organizational change creativity US printing industry
Author
Shalini Khazanchi, Ph.D.Assistant Professor, E. Philip Saunders College of Business
Rochester Institute of Technology
