They are simply being outcompeted by other individuals in other organizations. The Nadler-Tushman Congruence Model implies that when there is a high level of congruence between the activities at the individual, group and organizational levels, the company should succeed. Palm is an interesting case study because it counters the Nadler-Tushman model somewhat. The members of the firm are working with a high level of congruence, but they are simply not successful in their endeavors. Consider the distribution question. If the company wants to dominate the industry, it should have a national carrier. It does. But the choice of national carrier was suspect, and the types of distribution deals with Verizon and at&T left something to be desired. Likewise, Palm advertising connotes a high quality product. They are sending the right message to the market, but they are not doing it in a way that resonates with the market.

There is an element of execution that is failing at Palm, rather than a lack of congruence, but all told the result is that Palm has not been successful. Nadler-Tushman explains this more in terms of congruence between the inputs, outputs and the external environment than between...

Thus, the output level is insufficient to explain the failure of Palm; the full Nadler-Tushman model however does explain why what Palm is doing simply is not working for the company. It also may shed light on what HP needs to do in order to turn Palm around, should it want to.
Works Cited:

Gonsalves, a. (2010). Palm sales lower than expected. Information Week. Retrieved March 1, 2011 from http://www.informationweek.com/news/hardware/handheld/showArticle.jhtml?articleID=223100743

Hewlett-Packard 2010 Annual Report. Retrieved March 1, 2011 from http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NzkyMjF8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

MindTools. (2011). Congruence model. MindTools.org. Retrieved March 1, 2011 from http://www.mindtools.com/pages/article/newSTR_95.htm

Palm 2009 Form 10-K. Retrieved March 1, 2011 from http://apps.shareholder.com/sec/viewerContent.aspx?companyid=PALM&docid=6710915

Virzi, a. (2011). Smartphone market share: Android bypasses Apple. ClickZ. Retrieved March 1, 2011 from http://www.clickz.com/clickz/stats/1935425/smartphone-market-share-android-bypasses-apple