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q1. What is your analysis of the situation at Rondell Data corporation?
Rondell Data Corporation is suffering from an extreme case of an innovative company that has let the technical aspect of its business processes overwhelm everything else. As a result, although continual innovation is essential for the company to remain competitive, the culture this has fostered has increasingly hindered its ability to make the products customers are demanding. This, combined an increasingly blame driven culture, is causing serious problems and hindering Rondell’s ability to ship on time. Forbus, having recently joined the company as manager of ESD Division (ESD), finds himself at the center of these problems dealing with the conflicting demands of sales, engineering and production. Most recently, the 802 wide-band modulator, which was supposed to ship on October 2, slipped by 2 months due to 4 iterations of changes to iron out bugs between design, production and ESD.
Rondell’s business is developing and manufacturing leading edge broadcast and data transmission equipment. Rondell competes by delivering products to unique specifications to its primarily OEM customer base. Being relatively small, Rondell’s competitive advantage is its ability to innovate and deliver what the customer wants. However, customers have been increasing their demands for unique products, worsening the strain on Rondell’s development cycle. This has lead to delays and decreased customer satisfaction. Furthermore, it is unclear whether all of the business which Rondell is doing for customers is profitable —some of its business is probably generating more cost & pain than is justified. Indeed, net profits have been declining over time.
Overall Organizational Culture & Tensions
The organization houses units of many different cultures with production relatively isolated and design really dominating the overall organizational culture. Growth has put significant strain on the formally informal relationships between the departments, however personal contact is still the key to getting around the organization. There are now significant strains between the key departments, ESD, Production and Sales. Turnover — although low across the organization — has increased dramatically in ESD as this department has taken the full brunt of the conflicts that are now arising around product development. The design department, run by Reeves, is motivated by developing ‘clever designs’, but these are generally not production ready and have little understanding of manufacturing issues. In addition, design often misses deadlines. However the President, Hunt, is design focused and doesn’t appreciate the difficulties of turning these innovations into products. The Production department, run by Schwab, is described as “self contained”. There is significant tension between Production and ESD, particularly over quality control. Having been burnt in the past, production is hyper-sensitive to design-problems and doesn’t work collaboratively to help resolve them. This lack of respect for ESD, results from problems under its previous heads. The Sales department, run by Porter, has become increasing agitated as the problems have worsened. They dealing with more complaints from customers and now little trust the development process. Furthermore heavily backed by Hunt, sales frequently makes what other departments view as “absurd” promises about product features and schedules.
Analysis of Forbus’ Position
Forbus inherited ESD after its three previous heads left each after only a short period of time. Importantly, the pervious head, Kilman, was seen as a heavy charger, trying to get things done by brute force and subsequently creating significant frictions resulting in his firing. Thus has the task resolving these difficult pre-production issues, as well as sorting out the bad...