Organizational Structure and Strategic Design Lens free essay sample

The Dyna Corporation, is a major global information systems and communications company. It was originated as an office equipment company and moved in the 1960s and 1970s into high-technology applications. In the 1980s the company became an industry leader by being the first to provide innovative and high quality products. The demand for products was so high that customers were willing to wait for months just to have them delivered. Growth and earnings slowed in the 1990s as the company’s costs increased, value-added services and solutions were not offered, new products were slow to market, and the products were not meeting marketplace demands. Solutions packages that were offered by information technology and communications (ITC) consulting firms were winning high-margin client business from Dynacorp who did not have a competitive concept. The gap that Dynacorp had created in the technical product market was shrinking due to gains by technology manufacturers. Dynacorp was not changing fast enough to keep pace with competitors. We will write a custom essay sample on Organizational Structure and Strategic Design Lens or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Problem The goal to remain an industry leader in technological innovation and comprehensive packaged solutions is being pursued by Dynacorp through the following objectives * Produce and offer new technologies within project plan timelines to obtain the technical leadership advantage in the market * Within two years: * Drive product offerings by identifying changes in the marketplace * Reduce product costs to remain competitive Rebuild market share by increasing relevance and profitability The Chief Executive Officer (CEO) charged an internal task for with the duty of exploring the major challenges that Dynacorp was facing. These included the high costs, slow pace of providing the market with new products, and the need to increase value for customers. A consulting firm that was experienced in the ITC industry was brought in to work with the task force. The end result was that a recommendation was posed to restructure Dynacorp into a Front/Back organization. This was accepted and man dated by the CEO. The new structure was designed to maintain the company’s founding tenets of strong customer relationships and deep knowledge of market characteristics while simultaneously improving upon to the integration of technology development and production. Two years after the restructure the company is still facing low gross margins and struggles to meet both revenue and profit targets. Foreign and domestic competition continues to erode Dynacorp’s market share. This erosion is hastened by the company’s inability to effectively lower product cost and get new products to market in a timely fashion. Packaged solutions are still not available through Dynacorp. The impact of this continued decline is poor investor relations and lost market value. There is also a lack of organizational congruence and misalignment of supporting systems and processes which have been created during the new reorganization period. Many skills and attitudes at all levels of management have been mismatched and do not integrate with the current needs. There are no clearly defined job descriptions or standard operating procedures in place to guide employees. Managers of branches and product lines are compensated on performance against revenue and margin goals rather than addressing customer needs. These issues persist within the new organizational structure and continue to have a negative effect on the company’s overall daily operation. The engineering group appears to being using its considerable political power in such a manner as to hinder the accomplishment of the strategic plan, and this carries the problems of the old culture through to the new. Continued misalignment of personnel and operational inefficiency diminish the company’s ability to compete in the market. The lack of efficiency effects the day-to-day operations of the organization and the morale of employees; it also has a great effect on the company’s year-end numbers and ability for future growth. Analysis of Alternatives Strategic Design Lens As Dynacorp outgrew its functional structure it began to experience common disadvantages of such organizational types. These disadvantages include unresponsiveness to changes in the market and to customers. Restructuring to Front/Back revealed a structural disadvantage that is identical to the functional structure: poor integration between market needs and technology development. An additional disadvantage incurred due to the restructure was inadequate integration and synergy between the front and back ends. Alternative structures such as grouping by output/product or grouping by market are not options as they would result in â€Å"duplication of activities and resources, the erosion of deep technical expertise, missed opportunities for synergies and learning† (Ancona, Kochan, Scully, Van Maanen, amp; Westney, 2009, p. M2-19). The matrix structure provided a potential positive aspect in that it would provide a needed cross-functional linking mechanism by mixing the functional structure with grouping by output/product, but the complexity, cost, dual systems, and dual roles resulting from the matrix structure historically resulted in either the functional or the output/product system becoming more powerful than the other. Political Lens The political system within Dynacorp appears to be one with a history of operating in separate silos. The old Dynacorp showed engineering to be the strongest and most prestigious division and most top management came from this area. When most of the leadership assignments of the new Business Units (BU) came from the old engineering division it was revealed that engineering still held the power. One indicator of the political strength was the difficulty Dynacorp experienced in moving new product designs between engineering and manufacturing. The new Dynacorp combined engineering and manufacturing into BUs, and due to the political history between these old divisions it becomes imperative that they must learn to work together. The new structure must get buy-in from all employees, find allies, and build coalitions and networks that are in sync with company goals. Key players in the BUs must work to bridge structural gaps. Cultural Lens Because of the restructure, employees are in new roles and are interacting with different groups. Within the new structure a culture must be fostered among the employees that will allow them to find new allies, create new networks and mix up the previous subcultures. Position descriptions and training will have to be provided in order for the employees to become fully functioning. The new political structure must be the driver that aligns cultural and political areas of Dynacorp. Individual rewards rather than team rewards must be reviewed. Recommended Solutions Strategic Design Lens Based on the analysis of the alternatives, the best strategic design for Dynacorp is the Front/Back with strengthened linking mechanisms to facilitate growth of information sharing, product delivery, and creation of solution packages. Because skills are mismatched within the workforce management must review where and how employees work, establish HR policies and rules governing job duties, deploy employees across multiple teams (cross-training), provide training, implement standard operating procedures, and implement performance evaluations. Management must also eliminate the incentive and control system that has carried over from the functional structure and replace it with a more balanced incentive plan. HR executives need to take the lead in developing the social networks that are vital to the capture and transfer of knowledge. Team tasks are to be structured to define function, communication strategy, and define the final decision-maker. Management must review the existing liaison positions and modify if necessary. New cross-functional teams to monitor customer feedback and new technology innovations are required to include updated reporting structures that specify data input requirements Political Lens Managers must use network analysis to determine the informal networks (advice, trust, communication) within the organization. Network mapping will also identify network holes along with other communication patterns that may need to be implemented or dissolved. Other important data gathered may be analyzed to indicate the level of power possessed by engineering and show where that power may be impeding progress toward accomplishment of the strategic plan. This may reveal a need to modify roles of assignment in order to assist in altering the old culture that appears to have carried over. Cultural Lens In the footsteps of IBM, Dynacorp needs to change from an â€Å"inward-looking culture to an outward-looking culture focused on serving customers and beating the competition† (Ancona, Kochan, Scully, Van Maanen, amp; Westney, 2009, p. M8-8). By becoming an outward-looking culture, employees will be able to attract customers that were previously alienated and re-establish Dynacorp as the major global information systems and communications company. Position descriptions and training must be provided in order for employees to excel in their new roles, become fully functional, and operate efficiently. Individual BU employees will be rewarded and acknowledged upon BU performance rather than rewarded on individual employee performance. Cultural diversity training will be needed to enhance the working relationships and overall operations with the Indonesia plant. Implementation Strategic Design Lens From a strategic design perspective, Dynacorp must clearly define and distribute their mission, vision, values, goals, and standard operating procedures to the entire organization; these will be the guidelines for all political and cultural actions. Management will hire a new transition manager from outside the company to lead the effort of helping to align current employees in the new structure. The transition manager must assign special purpose groups (e. g. task forces, pilot projects, and training courses), develop processes (such as problem identification), and governance roles to enforce and track progress of immediate needs (phase one modifications) for all levels of employees while continuing to document issues and data to address additional issues in phase two modifications. This will include a review of skill mismatches, training needs, expectations of job duties, implementing a new incentive system, and implementing performance evaluations for all levels of employees. Management will perform a network analysis to analyze informal networks and identify network holes, mark detrimental networks for dissolution, and adopt effective networks. It is highly recommended that training be implemented on Six Sigma quality principles to facilitate the â€Å"understanding of customer needs, and striving for continuous improvement† (Snell amp; Bohlander, 2013, p. ). Two linking mechanisms will be implemented to connect people and groups. The first is to identify planning groups (build coalitions) to identify the major challenges and develop SMART goals that will address these challenges. The second will create temporary cross-unit groups to kick off the problem solving and plan for ongoing permanent cross-unit groups. Political Lens From the political perspec tive, required employee alignment changes may be a result of efforts by the new transition manager. Because of the current misalignment of power held by the engineering group, these alignment changes may face challenges. Enforcement of required job duties will be mandatory. The dissolving of existing networks, both formal and informal, will cause a political shakeup and may be challenged. Cultural Lens From the cultural perspective, an increase in corporate communication will be required to keep all employees informed and motivated toward organizational goals, future endeavors, customer needs and expectations that will grow the outward-looking culture. All employees must be provided their position description so they are aware of their job duties. Employees with insufficient training for their position must be provided training. All employees must be presented the new reward system. Results Organizations are characterized by inertia. The drive is from the top, and when implemented the strategic changes will train employees for their new roles and align the roles properly, which will result in fully functional employees. Linking mechanisms will be developed that will facilitate communication both inside and outside the organization. Changes made at the structural design level will flow down to the political level and benefit Dynacorp by balancing the power and empowering all. Cross-functional teams will work together to achieve the strategic vision of the organization. Structural changes will flow down to modify the cultural level. There will now be employees who can do their job better, address customer needs more fully, and understand the needs of the market. Information will flow freely up and down to increase innovation.