Case Analysis of 3m Optical Systems

In deciding how to handle the authorization for expenditure, Wong should fund it within his own unit by outsourcing. Restructuring the project so it can be done within the unit, without seeking approval through either formal or information systems, is the best option. There is somewhat of an idea and plan here, and much time and money has already been spent to have the proposal be completely rejected. Postponing the project is not an option as competitors will most likely have the market saturated in a few years anyway. And taking the proposal to a senior-level mentor is going too far and would probably jeopardize Wong’s position in the company. Wong was concerned that if OS moved back to only generating a profit with its ongoing auto components sales, it would eventually go out of business. But if the new project worked, along with future ideas for other major projects, the unit would not fold … 3M wouldn’t let it.

The OS unit needs to immediately accomplish several things:

1. Stop occupying so much of Guehler’s time. He has four other business units, all of which are larger than OS.

2. Start making money. OS had been losing money since 1979. Gains were continually offset by a declining sales volume.

3. Improve internal morale. Because results had never matched the high potential of their technology, the unit had become defensive and isolated. OS needed to communicate to get more support within the division.

4. OS was unable to demonstrate their economic viability, and was hurting its own creditability within the company. OS needs to start paying its way by making money on its existing business rather than continuing to invest in stale ones.

5. OS needed to develop major new applications and to concentrate on the promising, new, unrelated project that was projected to develop into a $200 million business, and would need $5 million in money. This was Wong’s Aiming Device.

OS’s credibility within SSSD and 3M was low. Two other business units