An Organizational Failure - Case Study of Blockbuster

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An Organizational Failure: Blockbuster
Rana Fawad
1. Describe and discuss how the organization’s culture facilitated the failure. Philips (2011) believes that success or failure of any great company depends on “Events, internal and external” (p. 3). Blockbuster also appears to be a victim of certain events at internal as well as external level. Based in McKinney, Texas, Blockbuster and founded in 1985 (Blockbuster Corporate, 2012) and it ushered in a new era as far as video rental retail industry was concerned. The company gave birth to video rental places that had significant amount of movies under one roof (the first store had 8,000 movies) and were not associated with bad movies or bad neighborhoods (Greenberg, 2008). …show more content…

22). Blockbuster also seemed to pay attention to events and little focus on learning new things and look beyond the horizon. Plus, it remained complacent as the leader of video rental company until Netflix and RedBox surged ahead to the extent that Blockbuster had to file for bankruptcy. Levy (2010) also blames Blockbuster for not being proactive in learning and bringing the desired changes. He believes “Change management is not just a tool to deflect distracting maybe-we-should’s, but it’s also a way to handle legitimate we-need-to’s that were missed at the start or that are responses to a changing business environment” (para. 7). So, instead of take charge in a fast changing rental business, Blockbuster refused to budge from its brick-and-mortar edge. Gradually, that edge fell apart like house of cards because the leadership failed to set in motion certain processes that should have allowed Blockbuster to remain the leader of the video rental retail industry. Moreover, the company’s leadership had their eyes set on something else, too. Is there any reason to believe that Blockbuster once tried to purchase Circuit City in 2008? According to Farfan (2010) it did happen but Circuit City rejected the offer and later on Blockbuster withdrew its offer. “Just two years later, Circuit City is out of business, and Blockbuster is struggling to stay out of bankruptcy court itself. The

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