Technotronics, Inc.

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Technotronics, Inc.

Written Analysis and Communication

Technotronics, Inc.
Memorandum

PERSONAL & CONFIDENTIAL

To: Vice President, Specialty Appliance Department, Technotronics, Inc. Date: 3rd September 1979

Subject: Report on the decision concerning commercial operation of ‘X-27’.

Dear Sir,

In response to the interdepartmental dispute between the Audio Product Section and the Magnetic Material Section, this report offers administrative relief to both the managers keeping in view the interpersonal relations. This report from the Audio Products Section presents the decision concerning the commercial operation of ‘X-27’.

Your consideration on the report is greatly appreciated.

Sincerely,

Ilene Carter,
Manager,
Audio Products Section,
Specialty Appliance Department,
Technotronics, Inc.
Executive Summary
There is a difference of opinion regarding the production and selling operation of the new magnetic material ‘X-27’ between the Audio Products Section and the Magnetic Material Section of Technotronics. This report deals with the interdepartmental relations between the two departments and also deals with the interpersonal relations between the managers of both the sections, Audio Products Section and the Magnetic Material Section. It reflects the individual behavior towards the organization keeping in mind the vertical integration.

It is recommended that the production and selling should remain with Audio Products Section for a period of 18 months as it will help the section to recover its development cost and also support the spirit of innovation in Technotronics.

Table of Content
Sr. No.| Particulars| Page No.|
1| Situation Analysis| 5|
2| Problem Statement| 6|
3| Options Available| 6|
4| Criteria for Evaluation| 6|
5| Evaluation of Options| 7|
6| Recommendation| 9|
7| Action Plan| 9|

Situation Analysis

The Audio Products Section has after 5 years discovered the new magnetic material, the ‘X-27’ after incurring $1.2 million as research and development expenses. The opportunity to research on this material concept was accepted by the Audio Products Section, after it was declined by the Magnetic Material Section, in the same year when the decentralization policy was adopted by the company. ‘X-27’ is a stronger, smaller and cheaper magnetic material with the potential to replace almost all other magnetic materials presently used by Technotronics. Magnetic Material Section is awaiting Audio Products Section to hand over the techniques and procedures for manufacturing ‘X-27’ as it states itself as the best and the most logical section of the company to commercially exploit ‘X-27’ to its optimum level. These present magnetic products in production could be produced at 1/3rd of the current costs and the new material used to manufacture these could eventually replace all other magnetic materials used by Technotronics. To make optimum use of ‘X-27’, all the products where magnet is a component part have to be redesigned. The company has section wise carters which limit every section within specific responsibilities. The new decentralized policy has been adopted with an expectation of profitably selling products within the different sections of the company. The policy has encouraged the managers to resolve the inter-departmental conflicts at section levels without getting their VPs into the act. There are more of long term benefits as compared to the short term benefits of the decentralized policy. The employees of Technotronics are finding the new policy different and haven’t been able to anticipate the actual benefits it will reap in future. This policy gave each of the sections the right to decide whether or not to go ahead with any pending decisions relating to their section.

Problem Statement

To decide the most logical section for manufacturing and selling ‘X-27’ keeping in view the interests of the Audio Products Section and the...
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