Case 4-6 Grand Jeans
* 11:1 ratio set to provide leadership efficiency has resulted in understaffing and allows managers little autonomy in staffing capacity decisions. Due to this issue GJ can’t get timely and accurate reports from plants. * Question: How must this organisational structure evolve or be managed, in order to obtain goal congruence between the production operations and the overall objective of GJ? * Insert the diagram of the organisation structure (page 182 text book) Analysis:
* At corporate level, GJ is a single industry firm focusing their core competencies to pursue growth in the Jean Industry * GJ organisational structure is functional and vertical in nature. There is an interrelationship between the production operation (who reports directly to the president), with the distribution department, traffic department and twenty five plants of GJ * Centralised management style- more in functional-layers of org management (min freedom, max constraints). This appears to be the case in GJ. * Information asymmetry is apparent with managers reaching their production target goal and withholding any additional jeans over these amounts until quieter periods or when their target levels are increased. There is no communication directly between the finance, marketing, corporate planning or production operations. This could be placing pressure on the President of GJ, who makes all the decisions and delegates accordingly and may not being receiving a “true” view of what is actually occurring in each department from the individual managers * Financial measures with autonomy allow the manager to manipulate accounting data (relation to meeting benchmarks-hiding stock and distortion of communication such as fudging budgets). What can GJ do to change this and realign objectives and goals? * Myopic behaviour- (short term behaviour). There is a lack of ownership/decision making and motivations. Why is it so easy to leave? What is...
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