Closing Case 7: Strategy Implementation at Dell Computer
1. Why has Dell moved to different kinds of organizational structures over time? Answer: Dell needs to move to different kinds of organizational structures over time in order to change and adjust the business itself to fit with a change in environment. In 1984, Dell did the business alone but the demand was coming a lot. To serve the huge demand, Dell needed to hire more employees and assign a tons of work to each person. When the business is bigger and bigger, Dell alone cannot do every thing in the company, so the functional structure can help Dell to work in different areas such as marketing or manufacturing. Moreover, the market is more fragmented and the company has a wide range of product, so Dell needs to create more many sub-divisions in order to better respond and serve the specific customer need. It would be seen that when the business moves to a direction to make competitive advantage, the organizational structures needs to be changed to support for achieving the company’s success. 2. Has Dell’s performance been improved?
Answer: Yes, Dell’s performance has been improved from a change in organizational structure. Firstly, creating the functional structure and giving authority to manager can help Dell to develop a lean organizational culture to squeeze the cost. Secondly, fragmenting the sub-division for specific customers could allow Dell to better respond the customer need; consequently, it could increase the customer satisfaction. Moreover, grouping the division as the customer group can help employees to obtain more in-dept knowledge and specialize in their tasks to serve the specific customers. Of course, this kind of organization can increase the profitability of the company. Besides, Dell’s performance is improved substantially from making use of the corporate intranet to standardize activities across divisions and integrate its activities to reduce cost. In...