Analysis of Dynacorp Case
The strategic design lens assumes organizations are deliberate, goal-achieving entities (Ancona, Kochan, Scully, Van Maanen, & Westney, 2005: M-2, 10). In this view, managers can achieve organizational goals by understanding the fundamentals of design and fitting design to strategy, as well as to the larger organizational environment (Ancona et al., 2005: M-2, 12). In this paper, I discuss the five major elements of strategy – environmental fit, strategic intent, strategic grouping, strategic linking, and alignment – and identify two specific elements as causes of the problems Dynacorp is experiencing with its redesign. These elements are strategic linking and alignment.
Fit with the Environment
In the 1980s, Dynacorp was an excellent fit with the environment; it produced high-quality, innovation products. As result, its customers were happy to wait months or even a year for the company to bring out a new product and to “do some of their own applications work and figure out how to integrate Dynacorp’s products with the rest of their operations” (Dynacorp Case, 2005: M-2, 97).
In the 1990s, however, the company lost the technological advantage it had maintained over the competition. According to Carl Greystone, executive vice president of the U.S. Cus-tomer Operations Group, “Both foreign and domestic competitors have been cutting into our market share, and our gross margins are way down,” (Dynacorp Case, 2005: M-2, 97-8, 100). Indeed, Dynacorp was finding that many of its customers needed more than hardware, but want-ed ‘complete solutions’ to problems. Customers were “looking for systems solutions, more cus-tomized software, and more value-added services” (Dynacorp Case, 2005: M-2, 97-8, 100).
Dynacorp’s senior managers recognized that the firm’s existing functional structure was seriously inhibiting the organization from creating effective cross-functional responses to its external environment.
References: Ancona, D., Kochan, T., Scully, M., Van Maanen, J. & Westney, D.E. 2005. Managing for the future: Organizational behavior and processes (3rd ed.). Cincinnati: South-Western College Publishing. Dynacorp Case. 2005. In D. Ancona et al. Managing for the future: M-2, 97-102. Cincinnati: South-Western College Publishing.