This essay has a total of 2065 words and 10 pages.
Banking on Diversity
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.
“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.
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.
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 correcte
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