Allentown (Epd) Case Analysis

Topics: Organizational structure, Management, Strategic management Pages: 23 (7172 words) Published: December 12, 2012
Executive summary

This report is to discuss the problems that Electronic Products Division (EPD) had incurred, and to present our finding along with the recommendation to address the issues. At the organizational level, the new product development process is slow which adversely affects the division’s growth. In addition, the business is becoming fiercely competitive and customers become more price-sensitive which has resulted in sales declines and price erosion. The major problem at EPD is that the current functional organization structure is suboptimal to respond effectively to the dynamics of the industry it operates within. Another observation is that the leadership skills and styles are mismatched with the needs of individual functional department. We conducted our analysis at the individual, division, and corporate levels. Evidence shows that a more organic and flexible organization structure is needed for EPD, which would improve team work and support the quick decision making capacity required to keep pace with the ever-changing market. After examining the leadership style and skills, we find that including Rogers, managers at EPD are lacking strategic leadership skills which lead to “throw it over the wall” attitude within the division. Coupled with the current ineffective performance evaluation system, the dysfunctional conflicts among the group members are inevitable. Peacemaker leadership style and limited teamwork among the different functional groups prevent them from reaching their full potential. EPD is actively participating in an organizational culture transition process to align its subculture to the corporate dominate culture – conflict avoidance and low risk taking. Unfortunately, these cultures do not support the strategic shift from military markets to commercial markets, and are impeding the division’s ability to grow. Based on our analysis, we recommend the following:

Restructure the organization from a functional to a matrix structure Re-start Organizational Behaviour Program and complete Phase III (Improvement of Inter-Functional Coordination) Provide stronger leadership through implementation of an Office of Strategy Management (OSM), a Balanced Scorecard approach, enrolment of Don Rogers in an executive education program and engagement of an external consultant to develop the management team’s change and conflict resolution skills Implementation of these recommendations will improve communication and coordination between functional groups and enhance new product development. The recommendation pertains to the leadership development will benefit the company in long run as the tacit knowledge is one of the most valuable assets and a key competitive advantage of one organisation. We also suggest EPD to act on the recommended short term action plans immediately to remove the conflicts between each functional group. The plans aim to improve the overall division performance within 12 months. Looking forward, the long term action plan will help the company redefine its long term strategy and empower the divisions.

Case analysis

Problem Identification
Key Facts:
EPD is facing fierce competition and reduction in sales; competition was based on price, quality, and service and short delivery lead times were becoming a stronger consideration Don Rogers met with Director of Org Effectives to discuss rationale for EPD's declining sales and operating margins for 1991 & 1992 & instructed him to assess the level of inter-department conflict AMC's growth was based on strong technological capability in the invention and manufacture of glass products Marketing specialists were generally inexperienced, were overwhelmed by challenges of forecasting, planning, & strategizing in a dynamic market There is a lot of conflict between groups, morale is low, and there is lack of mutual confidence and trust Sales & new product decisions are historically made at a high level due to the required investment...
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