Dynacorp Case Analysis
THE CASE OF DYNACORP
The Dyna Corporation (Dynacorp) operates global information and communication systems. Dynacorp became the industry leader in 1960’s and 1970’s by producing the technological innovations. Dynacorp was known as a company whose products were innovative and high-quality. That’s why, Dynacorp grew rapidly and spreaded to international markets in that period. In 1990’s, the industry and market changed, Dynacorp couldn’t recognize the changes in the market and handle the high-costs. Dynacorp’s competitors closed the technology gap, even they were faster and more innovative than Dynacorp about new markets and products. Dynacorp lost the leadership of the industry.
The CEO and some executives believed that the main problem was Dynacorp’s organizational structure. Dynacorp was designed as a functional organization since it was founded. There were three line divisions: engineering (organized by technical area), manufacturing (organized by location) and marketing (organized by geography). The CEO assigned an small internal task force. The task force determined a lot of problems in Dynacorp and looked for what was causing them and on how to fix them. The task force interviewed all divisions. The all divisions were aware of the problems but they was blaming continuously each other. The task force focused on eventually the alternative organizational structures. The task force introduced five organizational models to The CEO: product division structure, customer division structure, functional/product matrix, front/back and functional structure with stronger linking mechanism.
Even if it has some weakness, comparing with the other alternatives, the product division structure is the best model for Dynacorp. Dynacorp has three problems; high cost, slow pace of getting new products to market and the need to generate value-added services for customers made the company vulnerable.
Because the product division structure creates the transparency of
The Dyna Corporation (Dynacorp) operates global information and communication systems. Dynacorp became the industry leader in 1960’s and 1970’s by producing the technological innovations. Dynacorp was known as a company whose products were innovative and high-quality. That’s why, Dynacorp grew rapidly and spreaded to international markets in that period. In 1990’s, the industry and market changed, Dynacorp couldn’t recognize the changes in the market and handle the high-costs. Dynacorp’s competitors closed the technology gap, even they were faster and more innovative than Dynacorp about new markets and products. Dynacorp lost the leadership of the industry.
The CEO and some executives believed that the main problem was Dynacorp’s organizational structure. Dynacorp was designed as a functional organization since it was founded. There were three line divisions: engineering (organized by technical area), manufacturing (organized by location) and marketing (organized by geography). The CEO assigned an small internal task force. The task force determined a lot of problems in Dynacorp and looked for what was causing them and on how to fix them. The task force interviewed all divisions. The all divisions were aware of the problems but they was blaming continuously each other. The task force focused on eventually the alternative organizational structures. The task force introduced five organizational models to The CEO: product division structure, customer division structure, functional/product matrix, front/back and functional structure with stronger linking mechanism.
Even if it has some weakness, comparing with the other alternatives, the product division structure is the best model for Dynacorp. Dynacorp has three problems; high cost, slow pace of getting new products to market and the need to generate value-added services for customers made the company vulnerable.
Because the product division structure creates the transparency of