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Alcatel-Lucent and MP3 Technology February 27, 2007

Posted by Lady in innovation, Organizational Culture, Organizational Environment, Technology.

I recently read an article from the Washington Post entitled, MP3 Patent Verdict Harmless To Music Fans — For Now”. Basically this article dealt with the issue of the company Alcatel-Lucent suing Microsoft for infringing on audio patents that they owned. The lawsuit resulted in the jury deciding that Microsoft owes Alcatel-Lucent $1.52 billion in damages. Microsoft is seeking to appeal this ruling because they do not that they infringed on Alcatel-Lucent’s patent. The innovation of using MP3 technology to provide online music has been extremely beneficial to the consumers who use it and very much profitable for the companies who provide it. This use of information technology to increase the value of an organization’s effectiveness is good. This main reason I wanted to mention this article was because of the affect that the verdict (if ruled in favor of Alcatel-Lucent) could have on other companies, small and large that depend on this technology to enhance their organization. Microsoft is not the only company that depends on such technology—MP3 technology is now heavily used in cell phones, car systems, and video games. The article stated that some companies dependent on the use of this technology could be affected if the verdict results in a significant increase in licensing fees.  

In chapter 9, we discussed how technology can affect the structure and effectiveness of an organization. The term “technological imperative” was used to describe the idea that technology determines an organization’s structure. So I was thinking: would this be the case in such companies like Microsoft and other large companies? After thinking about it, I figured it might not be the case because technology is not the only thing that determines an organization’s structure—organizational size and other factors play a role in determining it also. The article mentioned that large companies such as Apple and Aol might be able to withstand these licensing fees and it might not affect the technology that they need to use.


But what about the smaller companies that manufacture MP3 players? The article stated that these regulations on the technology that they use could be detrimental to their organization and could even put them out of business. But a solution to this problem could lead to these companies making some changes in their organization in order to still compete. Might they have to change the technology that they use to lower costs, which might affect the quality of the music that they are selling? As their environment changes and their strategy changes, might this lead to some restructuring of their organization’s structure and culture? If this ends up being the case, then it would show how much technology could possibly affect their organizational structure and culture. Ok, I know, my blog was really long-winded. Tell me what you think!


How powerful do you think the threat of litigation can be at forcing organizations to change the technology that they use? How significant of an impact can these changes in technology have on an organization’s structure and culture?



1. Abby - February 27, 2007

I have, found some problems in balancing my mp3 and mp4 (iTunes only) files. If I want to put music on CD, or share it with my brother who has an mp3 player, it doesn’t all transfer correctly.

In regards to technology: with living in China, I’ve seen all kinds of variations on today’s models and technology. There are all kinds of fake models that look similar to apple products, or various mp3 players. Its definitely possible to have everything available, but its a matter of channeling the markets.

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