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Building Innovative Capabilities: The Case of 3M Company (Case Study Sample)


It is a case study of how the 3M company invests in research and development (R&D) and its innovative capabilities


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Building Innovative Capabilities: The Case of 3M Company
The 3M company was founded by five businessmen with Minnesota Mining and Manufacturing company as the original name, with an initial aim of mining in two harbors in Minnesota. They made their first sale on 13th June 1902. The company was formed to mine corundum for making sandpaper and grinding wheels. Corundum as their primary raw material was later discovered as a poor-quality mineral, bringing an end to its mining. On 8th April 2002, the company was renamed to '3M Company' on its 100th anniversary. 
The company is owned by shareholders both from the public and companies. The biggest shareholder of the 3M company is the general public, who owns 32.37%, which gives the retail investors collective powers in deciding major policy decisions in the company. Other significant owners of the company include The Vanguard Group, Inc., Which owns 7.34% of the company, SSgA Funds Management, Inc. With 5.19%, and BlackRock Fund Advisors 4.87%. 3M company has its headquarters in Maplewood, Minnesota, in the U.S. it has three major subsidiaries in the world; 3M India, 3M Japan, and 3M Canada.
3M produces an approximate number of 60,000 products within four business groups which focus on electronics, transportation, healthcare, safety, and consumer products. The company has a hierarchical organizational structure at the corporate level. The company's large nature requires the top leaders to have a strong command and control of the business. Under the hierarchical structure, there's a departmental organizational structure that ensures that the different businesses owned by the company are well managed. A matrix organizational structure is used in R&D to support innovation through employee contributions. Teamwork is one of the major qualities that has made 3M Company successful. The company works with people in different time zones and with various cultural differences. The company's Talent Acquisition Manager Gabriela Domagala, who is based in Poland, has to plan meetings and consider all these differences. Teamwork enables him and the company to keep things and business in order.
  Michael Roman currently serves as the chairman and the chief executive officer of the 3M company. He was named the CEO in July 2018. when Michael took charge, the company focused on four priorities to help drive its performance and growth. Portfolio, innovation, transformation, people, and culture. These priorities have enabled the company to deliver for all the stakeholders. Research and development is the most important strategy that the company uses because it leads to developing new products, improving existing products, and enhancing the production process (Hitt, M., R.Hoskisson, and H. Kim 1997 ). Also, the company has the principle 'FIDO' 'first in defeats others,' which means that to gain an advantage over other companies, a company must be the first to be in the market in order to learn about it and learn the best way to do business in it.
Research and development (R&D) refers to the process in which a company works to obtain new knowledge that it can use to create new products and services, new technology, and systems to use or sell. A firm that develops a product or a service for the first time protects it legally by obtaining manufacturing rights, patents, and copyrights (Johnston, M.R., 1989). This benefits the company by giving it monopoly powers over the market. For instance, 3M company made the first-ever waterproof sandpaper on earth. The company enjoyed the market, which brought in a lot of profit, being the only manufacturer. However, bringing in a new product has a disadvantage. Most small firms wait for big firms to finish developing a product to copy the successful process and create their own. This brings in a lot of new competition for the product.
To the society, R&D helps in various ways. Firstly, it creates employment for the unemployed in the community. Work translates to reduced poverty levels and a reduction in dependency levels. For example, the 3M company has employed more than 90,000 people all over the world. However, R&D can also cause pollution of the environment (Zhao, M 2006). These companies have waste materials that are a result of the production process. When these waste materials are released into the atmosphere, they destroy air, water, and the surroundings. 3M helps to reduce pollution of the air by recycling the waste products. In the early 1990s, the 3M company reduced the company's total pollutant generation globally by fifty percent and saved more than $500 by eliminating products that required subsequent recycling. 
3M has a firm belief in the value of innovation. The company invested more than U.S.$ 1 Billion in Research and Development. This enormous investment in innovation has since helped the company to develop new products, including the family of Scotch-Brite cleaning products, masking tape, and magnetic sound recording tape. Apart from investment, the company had a president known as William McKnight, who served between 1949 to 1966. William developed a corporate culture that encouraged employee innovation (Zhao, M 2006). This culture was consistent with the idea that people should not be afraid of the possibility of failing. He believed that as a business grows, it is important to encourage employees to exercise their initiative. When these employees are delegated with authority and responsibility, they end up wanting to do things in their way. Even if they make mistakes, Williams believed that if that person is correct, their mistakes are not greater than the mistakes the management can make if it tells those in authority what to do. According to Williams, dangerously critical management when mistakes are made kills innovation. This type of culture has made 3M have a very successful innovation spirit.
   The company allows employees to spend a good fraction of their time on their time without explaining to their managers. This helps them to pursue their ideas. The company created a company, 3M Innovative Properties Company (3M IPC), to protect the inventions of its scientists worldwide from imitation. The company also provides legal counsel services and has a strategic intellectual asset management group that establishes new ways to utilize and create value from underutilized inventions globally, which leads to unique products and new technological combinations (Johnston, M.R., 1989). To give monetary support to their employees, the company has established a Patient money program that supports teams who have projects that have a promising future. This support helps to motivate the scientists and also creates an excellent entrepreneurial ecosystem. Also, the company offers grants to projects that do not get funded by its business units through the Genesis Grants program.
3 M rewards employees who get a breakthrough with their projects and profitable products to motivate them and their innovative skills. The Golden Steps Awards is an example of an awa

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