Organizational Environment
Uncertainty
Acme is made up of five key departments, they include: purchasing, drafting, productions, industrial engineering and mechanical engineering. Omega, on the other hand, is made up of four key departments: mechanical engineering, electrical engineering, industrial engineering and drafting. Both are similar.
These departments play an instrumental role in the success of both companies. It is evident that Acme operates under a mechanistic structure whereas Omega operates under a more decentralized organic structure. It can be stated that in regards of complexity, both organizations have a moderate number of sectors and operate at a low level of environment complexity.
In order to fully understand the organization environment of the firms we must also define the levels of stability. In this particular case it is evident that both firms operate in an unstable environment. The electronic market is unpredictable at best and little planning can be done to predict the changes in the market. In the case, the demand for the memory units was unexpected by both firms. In this particular case, the demand for memory chips by the photocopier firm was an unpredictable event. This created an unstable environment for both firms.
It can be concluded that Omega, being simple and unstable, is operating at high-moderate levels of uncertainty. Acme, on the other-hand, is more complex but is also unstable. They are operating at low-moderate levels of uncertainty.
Resource Dependence
?The environment is the source of scarce and valued resources essential to organizational survival.? Both Acme and Omega rely heavily upon environmental resources. They are extremely resource dependant as they acquire their essential materials from external sources (external environment). The success of the firms is directly related to how quickly and easily they can obtain their resources. In this case, both Acme and Omega had to delay their shipment of prototypes memory chips to the photocopier firm due to the delay of the external materials needed to produce the chips. This clearly indicates the resource dependence of both firms.
Strategy
Both Acme and Omega manufacture similar products. In this case it is the printed circuit board. Also, both firms are in direct competition with one and other seeing as they are in the same geographical region and they presumably acquire their resources from the same supplier(s). With this in mind, both firms realize the importance of competitive emphasis within their corporate culture.
Seeing as the characteristics of strategic planning are directly related by the dynamics of the external environment, both firms are trying to gain an ?edge? on one and other. In this particular case, Acme decides to run a ?tight ship? (mechanistic structure) in order to increase productivity and efficiency, and to decrease costs. The advantage of this strategy is that they can undersell their competition (Omega) by selling at a lower cost. Omega, on the other hand, is nearly to opposite. They run a more organic structure, which relies heavily upon communication, delegation and teamwork. This strategy allows Omega to effectively compete with Acme by stressing reliability and by placing emphasis on quality.
Organization Structure
John Tyler, President of Acme Electronics, credited his firm’s greater effectiveness to his managers’ abilities to run a ?tight ship.? He retained the original functional structural form developed by Technological Products in which detailed organizational charts and narrowly defined job descriptions would produce efficient performance and high company profits. These characteristics describe Acme as a very mechanistic company with high standardization and formulation. Vertical communication is method of information flow from John Tyler to the department heads and then each department’s workers. Only departmental managers have contact with Tyler who makes any major decision for Acme and thus maintains a high span of control. Acme’s President John Tyler believes that through an intense level of control and specialization the company’s efficiency can be maintained and thereby achieving Acme’s continued success. Yet Acme’s organizational design promotes structural differentiation and Tyler limits the development of many managers. According to Woodword’s classification of the technological structures, Acme should use a mass production method. Since Acme is already highly centralized and formalized along with low degrees of communication, there is no problem. But there was clearly a problem with the work flow interdependence among departments with regards to Thompson’s classification. Acme is a mixture of pooled and sequential interdependence in which there is low communication and there are strict procedures. This work flow process needs to be addressed by the management.
On the other hand Omega Electronics Incorporated is a much more organic company. Even though Omega and Acme have similar departments, Omega’s President Jim Rawls operates with a low span of control with a belief that the implementation of organizational charts put an artificial barrier between departments and individual employees. Rawls stresses the necessity of a cross-functional work place in which teamwork with vertical and horizontal communication is the most prominent characteristic. By utilizing an environment of open communication, the decision making process is decentralized. Rawls’ concern with the need for employee participation in the organization and employee satisfaction results in moderate standardization and formulation at Omega. There is also a medium level of specialization as described by a new member of the industrial engineering department, ?When I first got here, I wasn’t sure what I was supposed to do. One day I worked with some mechanical engineers and the next day I helped the shipping department design with some packing cartons.? As an organic organization, Omega emphasizes cooperation between departments and individual specialists thus allowing latitude and development in the work force. However with this type of structure there will be a low degree of consistencies with a low span of control. The possibilities of confusion and contradictory procedures in various departments could result in numerous administrative conflicts. With regards to Omega’s technological structure in Woodward’s classification, the characteristics are the modest levels of standardization and centralization with high verbal communication and skilled workers. This classifies Omega as a unit/small batch production organizational type whereas it is currently producing in large batch/mass production method. This problem should be corrected as soon as possible to achieve better levels of success. Omega maintains a reciprocal interdependence according to Thompson, where there is high communication with teamwork and adjustments.
Staffing Patterns
In recognizing the benefits of employees within an organization, the organization must work to minimize requirements of qualifications and maximize qualities of the individual. Many companies, as in the example of Acme Electronics, focus on qualifications when hiring and developing an integrated workforce. However, as this case had proven, cultural diversity through teamwork and individual personality can be a greater asset in the long run. The very culture of the organization is built by qualities of individuals, not by their qualifications. These qualities work to create the framework for efficiency and productivity among the organization and its employees.
Quoting an unknown source, ?put round pegs in round holes? is not always the solution. A mechanical engineer may be able to assemble a printer board efficiently, however, he/she may not be able to integrate solutions among other employees and offer support to other departments and tasks within their own organizational niche. In this way Omega has produced a capable organization. They have put round pegs in round holes and connected these pegs to square pegs in square holes. Their success is measurable by their internal employee satisfaction and the overall quality and reputation for their products.
Again, the organizational hierarchy of Acme has produced departments of skilled workers but has failed to implement the diverse, united workforce into their strategic plans for the future.
Again, the difference in staffing patterns is related to the success in production of a no-defect product. Because Acme was able to slash costs to win the project, does not mean that their organization is in a situation of control or efficiency within the industry.
Organization Control Systems
Information is that which alters or reinforces understanding. It is a tool and asset that is essential for every organization and their operational systems. To successfully manage uncertainty (the absence of information), and the subsequent efficiency of the organization, certain control systems must be in place.
Strategic control being the overall evaluation of strategic plans, organizational activities, and results that provide information for future action, differs much between Acme and Omega. Acme is a company of distinct hierarchical structures that focus on an information flow design through many controlled sequences. It has departments focusing on specific set tasks that are to produce benefits for the overall efficiency of the organization. Much information flows in the way of memos and instructions, and it is a more formal process.
Departments may not see one another to know of the possibilities of overlap in product stages. The goal of such a strategic control system is one to produce a quality product with minimal interruption between tasks. However, as tasks are being completed the organization is divided in a series of teams on different sides, rather than a complete organizational efficient team.
Omega is an organization of efficiency through informal control systems. Its strategic vision is similar to that of Acme, however, it believes that efficiency and quality come through an organization of informality and various task job descriptions. An employee may work in more than one department on a variety of tasks. In this way every employee is aware of the possible flaws and task overlapping is decreased. This control system is an example of why Omega was the organization to recognize the design flaw within the photocopier plans, and also why their team was on time with a quality no-defect product.
The goal of Acme was simply an on-time, quality, no-defect product. For Omega the goal was to produce an on-time, quality, no-defect product as well however with teamwork being the measurement of quality rather than individual department tasks as in the case of Acme.
It is clearly shown how such management control systems vary across organizations and all have their possible advantages and disadvantages. The formalized routines, reports and procedures in this case provided success for Omega and its engineering unity, however, it also shows the ability of a hierarchical task specific organization in cost-cutting procedures and such subsequent industry success as is experienced by Acme Electronics.
Managerial Actions For Future Success
The world of hierarchical structures in organizations is quickly changing as organizations face unique competition in their respective industries. The ?blue suit? IBM organization of the 1980’s has changed to reposition them among the modern day approaches to efficiency and success. Organizations and successful management teams have realized the importance of implementing a team approach in the workplace. The end result is proven success. Working together is a solution for efficiency and cost minimization as in any part of life.
Acme Electronics has positioned itself among industry leaders with their hard-nosed business tactics, however, this approach is representative only of sacrifices made to compete within their niche. They have shown in this example that their organizational control systems are lacking in productivity and efficiency. There is no control system for tasks as they are all specific.
Omega Electronics Inc. has positioned itself as a model company for the future of many industries. There control systems are in place, however, somewhat informal. This has shown to produce a team-oriented environment with highly effective personnel of employees. In this example they picked up on design flaws and produced the final product in time in good standing. There is less form of miscommunication because departments are less specific and tasks are done in variety. In this way Omega has shown to be in a position for future success.
The future of many industries lies with cultural diversity through a team oriented work environment. As the world integrates into a global village, firms must focus on their qualities and become not just good managers but influential leaders. In this way Omega has created change, and change is the key to effective leadership. If Acme remains without change, it will strive to compete with business tactics rather than quality and efficiency, something that in the long run is somewhat unreasonable and unprofitable. Reputation is the game. It is like the old saying, ?an author is only as good as their last book?. The future is full of change and implementation of change, only the willing will survive.
Bibliography
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