Founded in 1899, Harrison Keyes has been a leader in publishing business, scientific and technical information. Due to recent changes in the industry, and an attempt to revamp its former successes, the company is in the process of redefining itself in the market. One major change is transforming the sales market from a printed version of books to an e-book platform. (University of Phoenix, 2007) Primary focus is on developing a full service site.
This paper will identify companies that have faced specific issues related to those identified in the Harrison Keyes scenario (University of Phoenix, 2007) and related to the concepts of enter concepts. For each company the paper will: discuss the following the issue identified in the scenario that is also facing the company, how the company responded to the issue, and outcomes of the company’s response to the issue. Additionally, the paper will provide an analysis that synthesizes the key findings. The analysis will identify the key course concepts and compare and contrast the practices of each company related to those concepts
NASA, being a government agency that utilizes the expertise of private firms for many of its projects, has developed a very articulate request for proposal (RFP). Requirements and features must be in enough detail that contractors have a clear description of the final deliverable that will meet the customer’s needs. In most cases the RFP also specifies an expected format for the contractor’s bid proposal so the responses of different contractors can be fairly evaluated. (Gray & Larson, 2005, p 52) This is to avoid ambiguity and provide an even ground to start from.
When comparing the utilization of a RFP with NASA and Friar Tuck (FT), one may note that if FT had implemented a RFP, many of the issues the organization is facing could have been alleviated. With FT, a RFP delivered to all vendors involved would have provided the starting blocks of the project. Each company would have an opportunity to bid on a project that best suites their needs and expertise. This way, when the selected project is under way, the involved parties have an active, vested interest in the success and outcome of the project.
Hong Kong International Airport was built with the expectation that there would be a large volume of travelers and goods going in and out on a daily basis. As demands increased, the airport authorities had the competence to create a work breakdown structure (WBS). The early stages of developing the outline serve to ensure that all tasks are identified and that participants of the project have an understanding of what is to be done. Once the outline and its detail are defined, an integrated information system can be developed to schedule work and allocate budgets. This baseline information is later used for control. (Gray & Larson, 2005, p.99)
If Friar Tuck had implemented a WBS, there would have been a clearer understanding of the deliverables, the costs associated with each deliverable, when each deliverable was due and who was responsible for ensuring that his or her assigned work was completed within the allotted timeframe. Because budget and tasks appeared to be important, FT found itself with the goal but lacking details of how to execute. Because HKIA realized that their greatest assets are the passengers and cargo, the organization took great lengths to ensure that the daily business transactions were not disrupted and that the airport was able to meet the demands placed upon it by its customers, which include passengers and cargo.
Project planning at Harrison-Keyes has progressed to develop a WBS which is being worked within their existing functional organizational structure. A status check on Harrison-Keyes’s tact to project management demonstrates difficulties with task completion and employee behaviors. Organizations that choose to manage projects within their current functional structure face uphill battles between the functional silos.
Project management within existing functional organizational structures has known advantages and disadvantages. Advantages are no changes, flexibility, in-depth expertise and easy post-project transition. Disadvantages to managing projects in this manner are lack of focus, poor integration, slow, and lack of ownership (Gray & Larson, 2006, p. 58). Harrison-Keyes has alternatives to consider provided the pros and cons of managing projects within their existing functional structure and the United States Department of Defense provides a benchmark for consideration.
Conflict with the authors at H-K has to be addressed for a successful transition to an e-publishing company. As a benchmark examination for H-K, the DOD is commonly faced with large and complex project implementations which are riddled with differences of opinion between the functional branches of the service, the Army, Navy, and Air Force. Three types of conflict were identified by the DOD case along with effective measures to counteract the friction.
The DOD recognized three types of conflicts which hindered project implementation in a functional organization, which are 1) interpersonal-based conflict, 2) task-based conflict and 3) process-based conflict (Sutterfield, et al, 2006). In response to identifying three broad-based conflict classifications the DOD case study created effective strategies to address them while managing projects.
Interpersonal-based conflicts within projects at the DOD are addressed with a strategy to compromise and build collaborative relationship to create win-win discussions between functional areas (Sutterfield, et al, 2006). Task-based conflict resolution relies on an effective project manager navigating aspects of stakeholder’s position, power or influence. As a project manager evaluates these factors a determination can be made to deploy a competing, collaborating, or compromise strategy to effectively manage the project (Sutterfield, et al, 2006). Process-based conflict resolution is more clear-cut due to the sequential requirements of projects.
A heavier-handed approach towards stakeholders is required as less flexibility can be allowed in order to move the project forward. If flexibility is allowable within the project step a more collaborative approach can be considered (Sutterfield, et al, 2006). A second case study of Honeywell, Inc. provides H-K the possibility of determining is a process breakdown structure (PBS) is better suited than the currently developed work breakdown structure (WBS). First let us look at 10 lessons learned by Honeywell in the use of PBS and contrast the potential into Harrison-Keyes’s situation. It is important to note that both Honeywell and H-K are faced with a dramatic shift in their business strategy.
Honeywell’s experience yielded 10 lessons when attempting to make radical change in an organization. The 10 lessons learned were (Paper, et al, 2001):
People are the key enablers of change
People need a systemic methodology to map processes
Create team ownership and a culture of dissatisfaction
Management attitude and behavior can squash projects
Bottom-up or empowered implementation
Redesign must be business-driven and continuous
IT is a necessary, but not sufficient, enabler
Set stretch goals
Execution is the real difference between success and failure
Similar to Harrison-Keyes’s competitive requirements to change from print publishing to e-publishing, Honeywell faced competitive pressures to reduce defects by 1000% and production cycle-time by 500%. Honeywell dramatically changed its method at project implementation within the organization to accomplish successful results.
Honeywell eliminated project management by tasks and details (WBS) in favor of managing them by process-orientation (PBS). Honeywell learned two key lessons in project implementation of radical change. The first lesson learned through Honeywell’s project execution through PBS was execution separates high performers from less successful PBS projects. The second lesson learned by Honeywell involved the identification of the difficulty of change not being sufficient enough. A critical step was to change the vision of the organization to reflect the radical change (Paper, et al, 2001). In addition to these two lessons, Honeywell experiences the behavioral aspect of project management as H-K.
Honeywell found that successful execution is dependent upon behavioral change. Behavioral change was found to be extremely difficult and required time to be successful. The need for time is often in conflict with the need for quick profits (Paper, et al, 2001). Middle management was found to be the most resistant to change because of their dedicated knowledge skill-set versus process skill-set. Strong training programs coupled with pay for performance plans to provide financial incentives helped Honeywell overcome this hurdle.
PayPal and YouTube are two of the biggest success stories since the dotcom bubble burst sometime after the year 2000. For all of the companies’ success there has been a well publicized and scrutinized series of shortcomings and fallbacks that could have been avoided. Risk management practices would have prepared these companies for growth and expansion while building their brand and could have possibly eliminated the issues they face today.
PayPal burst onto the ecommerce scene in 1999. The public was just beginning to embrace the idea of shopping for everyday goods and services online but were weary about giving personal information to strangers or having to repeatedly enter credit card information online. PayPal was able to offer consumers a simple web interface and piece of mind by storing that sensitive data and allowing buyers and sellers to seamlessly complete online transactions. The thought that the website would explode and be the defacto payment solution on the Internet did not cross the designers mind and the risk was not properly assessed. PayPal has lost many customers and has had to fight many lawsuits due to poor planning. Even now PayPal is struggling to catch up while meeting the demand for their service. This same lack of a contingency plan could doom H-K as they search for a firm to perform the digital formatting.
YouTube has become one of the most visited websites on the Internet in just a few short years. While the designer can be proud for creating a forum for all things video, he too can be blamed for not creating a risk management plan. Allowing users to upload their own videos has opened the door to copy righted material being available on the website.
The networks and studios are slow to embrace the sight as a way to increase brand awareness and have instead blamed YouTube for declining revenues and ratings. Entire movies have been made available on the website the same day they were released in theaters providing some credence to the argument against the site. Had YouTube made alliances with the studios and networks prior to allowing users to upload videos they could have avoided the problem altogether. This is another case of a business that did not properly mitigate and assess the risk and now face the threat of lawsuits.
General Electric and Siemens have successfully dealt with the issues of a corporate culture that negatively affected their ongoing project structure as well as a culture that fostered individuality among the various departments. HK faces similar problems in that its culture is one of individualism and lack of accountability that has led to a lack of consensus among its leadership as to project management structures, organizational culture, and creating and communicating that culture throughout the organization.
GE has created a corporate culture that is not individualized by department like HKs, but instead involves all members of the GE community, its management, its employees, and its customers. GE has also created a corporate culture that dismisses politics as a means to an end. Through the changes to culture and GE’s team approach they were able to organize projects as dedicated teams within functional organizations. Culture has a considerable affect on the success rate at HK as well. Their organization’s culture has affected their projects. HK has hired a new CEO, Meg McGill, to move them into the strategic direction of “all things digital.” However, nowhere in her emails and correspondence among HK’s leadership did she address the change in culture in order to affect her strategic business objectives.
Meg needs to implement a change in corporate culture like that of the CEO of Siemens Klaus Klenfeld, who changed the corporate culture to one where “Everyone, including the boss, is accountable. We commit to something, and we deliver” (Ewing, Jack, 2007). In order to affect this, Klenfeld has had to deploy hard tactics. By implementing a changed culture that emphasizes accountability, project management structures will become more thorough and thought out. Organizational culture and structure influence project management more than HK realizes. Addressing the culture of HK to one of accountability will go a long way in formalizing project management structures such as organizing those projects through dedicated teams; organize projects within the functional organizations of HK; organizing projects within a matrix; or organizing projects within their network organizations.
GE organized their projects through dedicated teams, Siemens’ organized by deploying hard tactics within their functional organizations, and both implemented these project structures by changing their corporate culture. HK must take similar steps in order to realize their business objectives.
When University of Phoenix decided to implement e-books into the on-line learning system, the management knew that they needed a corporate strategy and high quality project management. The lack of the above mentioned items meant costly lawsuits because a great deal of authors opposed the idea of e-books due to possible fraud and copyright violations. The company was not able to avoid lawsuits, but it was able to protect itself from future legal issue and establish ground for strong digital contend on the learning websites. It was made possible by clearly defined corporate strategy and project management:
In the lawsuit, filed in U.S. District Court in Atlanta, Patrick G. McKeown, alleges that the Thomson Corporation and two of its subsidiaries sold a customized electronic version of his book Information Technology and the Networked Economy, to the _UNIVERSITY_ of _PHOENIX_ , which in turn has sold more than 23,000 copies to its students. (Mr. McKeown says an updated royalty statement he recently received shows that the actual number of copies sold by _PHOENIX_ is now about 45,000.) Thomson did not return telephone calls seeking comment. In a written statement, _PHOENIX_ said that it it honors intellectual-property rights of others, adding, “the _UNIVERSITY_ licensed its rights to use the textbook from a reputable, well-known publisher, that represented it had the appropriate rights to the book. (Chronicle of Higher Education, 2007).
OnStar represent an example of Risk Response Development. OnStar provides wireless access to emergency and security services from General Motors vehicles. A great number of opponents were claiming that OnStar collect personal information and might use it for marketing and other purposes. The company did not try to refute the statement since the information is indeed collected: “You start [collecting] individual pieces of information that seem benign,” he says. “But when you begin to combine bits of information it becomes less and less so.” White says OnStar, in storing data only in aggregate, is walking a fine line. “It is disingenuous to talk about aggregate data when you have the ability to differentiate it,” he says. There may not be a business case for creating individual profiles today, White adds, but there may be someday, and that’s when potential privacy violations will become a concern,” (CIO, 2006).
The response of General Motors to the risk of having the idea of OnStar shot down due to the information collection, provoked the company to issue the results of the survey which indicated regardless of the above fact, a great number of drivers still choose OnStar: “It’s clear from the survey responses that women are looking for ways to enhance their peace of mind when driving — whether it’s a long-distance solo car trip, the daily commute to work, or simply ferrying kids to and from after school activities,” notes Chet Huber, OnStar President. “Ninety four percent of female subscribers say that OnStar provides peace of mind when they’re traveling alone; 87 percent of female subscribers say that OnStar provides that peace of mind when loved ones are traveling. And more than 70 percent of OnStar’s female subscribers tell us they prefer or will only purchase an OnStar equipped vehicle,” (OnStar, 2006).
Researched Company Synopses
Since its inception in 1958, NASA has accomplished many great scientific and technological feats in air and space. (NASA, 2007) With its continued research and development programs, the agency has provided a renewed interest in space, the planet and the environment in general.
NASA, in its quest to improve manned space exploration, began the Ares project. The project was initially created to develop a rocket that would enable astronauts to travel to the moon and eventually to the planet Mars. The organization needed assistance from private firms in the creation of the
avionics unit that crew members would use to control navigation, guidance and other hardware (NASA, 2007). The organization needed to implement a process that would ensure that the winning contract go to the most qualified company.
_Response to the Issue_
In order to ensure that the organization brings in a highly qualified private firm that knows exactly what NASA is looking for, the project team created a request for proposal. The issues covered included, but not limited to:
1. Synopsis of requirements and request for action
2. Statement of work (SOW) detailing the scope and major deliverables
3. Deliverable specifications/requirements, features, and tasks
4. Responsibilities–vendor and customer
5. Project timetable
6. Costs and payment schedule
7. Type of contract
8. Experience and staffing
9. Evaluation criteria
(Gray & Larson, 2005, p. 52)
The organization, after interviewing and investigating several well qualified firms, hired the Boeing Company to provide support for both design and production. Crew transportation to the International Space Station is planned to begin no later than 2014. The first lunar excursion is scheduled for the 2020 timeframe. (NASA, 2007)
In 1998, the Hong Kong International Airport was opened. The construction took 6 years and cost upwards of $20 Billion USD. Although constructed under British Colonial rule, the airport began operations under Chinese law. As the world’s fifth busiest international passenger airport and most active worldwide air cargo operation, HKIA sees nearly 800 aircraft take off and land every day. (Hong Cong Airport, 2002)
As business increased at the airport, the ramp-handling operations began to experience delays. Aircraft ramp handling refers to services on the ramp for an aircraft. It includes loading and unloading of baggage, air cargo and air mail onto the aircraft, and transportation between the aircraft and the passenger terminal, air cargo terminals and the air mail centre. In addition, ramp handling services cover preparation for delivery onto aircraft of bulk baggage and baggage containers, aircraft loading bridge operation, and passenger stairs operation. (Hong Kong Airport, 2002) The airport needed a solution that would not impact the daily operations of the facilities.
_Response to the Issue_
The HKIA leadership team decided to implement a wireless-enabled ramp management solution, which would enables control room staff to monitor the entire airport using computer terminals, links to airport-specific databases and existing IT infrastructure, as well as covers finance and accounting. (Hewlett Packard, 2003) In order to roll out the project, a work breakdown structure needed to be implemented. This allowed the team to align itself with the scope, define deliverables, create work packages, and assign specific duties to all involved.
The wireless-enabled ramp management solution integration was completed without incident, as far as daily airport activities were concerned. The ability to apply the technology into the existing wired network infrastructure meant that employees had options in accessing data, and performing their duties. Ramp workers are able to receive current operational information, more efficient utilization of employees throughout the facility, increase security through more accurate recording, and the ramp-handling operations has been able to keep up ith demands. (Hewlett Packard, 2003)
_Identified Issue: Defining the elements of a project – Process Breakdown Structure (PBS)_
When an organization faces projects to produce tangible outcomes, such as design and building, WBS is an ideal way to attack them. When radical change in an organization is needed through a series of steps or phases, PBS is best suited to complete the project (Gray & Larson, 2006). Harrison-Keyes is striving for a radical change in transitioning the operation from print publishing to e-publishing. Honeywell, Incorporated serves as an example for Harrison-Keyes to benchmark as a similar radical change faced Honeywell in 1989. Harrison-Keyes should note that to drive transformational change as Honeywell accomplished then a PBS approach over a WBS should be considered.
Honeywell began to experience lagging performance results in its industrial automation and control (IAC) business unit. Global competition was requiring manufacturing firms to operate more efficiently than ever before while maintaining high levels of quality. Customers from around the world ranging from refineries, chemical plants and paper mills purchased Honeywell’s TDC 3000X system to achieve world-class process control capability. Defects, production cycle-time and materials management had to be improved to remain competitive (D. Paper, J. Rodger & P. Pendarker, 2001).
_Response to the Issue_
As a result of lagging performance a world-class -manufacturing (WCM) program was undertaken over a three-year period. Radical improvement measures were established to reduce defects by 1000% and production cycle-time by 500% (Paper, et al, 2001). To accomplish these revolutionary results Honeywell focused on processes and not detailed tasks. Multi-skilled workers in charge of building entire products or modules were favored over individual workers in a functional department. Resources were assigned to processes over individual tasks and factories were shut down for an intensive 6-hour training session with the need for radical change emphasized (Paper, et al, 2001). Employee motivation was instituted through pay for performance plans which were tied to salaried workers performance reviews. Through Honeywell’s PBS experience 10 key lessons of success were identified but two of them were identified as most critical to the outcome.
The two most critical lessons learned the Honeywell’s adaptation of radical change through PBS were 1) execution separates high performers from less successful PBS projects and 2) identification of the difficulty of change is not sufficient enough. The vision of the organization must change to reflect radical change (Paper, et al, 2001).
The Honeywell PBS experience found that execution that is dependent upon behavioral change is extremely difficult and requires time to be successful. This is often in direct conflict with an organization’s requirements for quick profits and impatience (Paper, et al, 2001). Honeywell found the largest obstacle to successfully implementing via a PBS method was middle management resistance. Employees in middle management positions were notorious for being experts in their specific areas and the transition to a process expert over a specific functional area proved difficult to accomplish. With strong training programs and incentives, Honeywell overcame this hurdle and was eventually successfully in transforming the organization.
_Identified Issue – Project Management Structure within a Functional Organization_
Organizations often approach project management through their existing functional hierarchy and Harrison-Keyes is no different as it proceeds towards its adaptation to e-publishing. When organizations choose to adapt project management within their existing hierarchical structure they accept the disadvantages of this choice, which are lack of focus, poor integration, slowness, and lack of ownership (Gray & Larson, 2006).
Similar to Harrison-Keyes, the Department of Defense (DOD) operates project management within a functional hierarchy with a dedicated project manager coordinating traffic. In a case study of the DOD project, Light Amphibian Heavy-Lift (LAMP-H), the disadvantages parallel Harrison-Keyes’s situation. The DOD’s experience serves as a benchmark for failure of project management within a functional organization and proposes a model to offset the issues that are encountered.
_Response to the Issue_
Managing projects in the DOD has been described as the most complex process and the most difficult to manage under the best circumstances (J. Sutterfield, S. Friday-Stroud & S. Shivers-Blackwell, 2006). The Navy, Army, and Air Force compromise a formidable functional structure to navigate when coordinating projects. In the case of the LAMP-H project, three types of conflicts were identified in hindering the project, 1) interpersonal-based conflict, 2) task-based conflict and 3) process-based conflict (Sutterfield, et al, 2006). In response to identifying three broad-based conflict classifications the DOD case study created effective strategies to address them while managing projects.
Interpersonal-based conflict within the LAMP-H project was addressed with a strategy to compromise and build collaborative relationships. When the Army, Navy, and Air Force created win-win discussions all details of the LAMP-H project were agreed upon which resulted in a successful outcome of the project (Sutterfield, et al, 2006). Task-based conflict resolution strategy is dependent upon the project manager and stakeholder’s position, power or influence. As a project manager evaluates these factors a determination can be made to deploy a competing, collaborating, or compromise strategy to effectively manage the project (Sutterfield, et al, 2006).
Process-based conflict resolution cannot be influenced by a project manager because of the sequential requirements of a project. In other words, a step has to occur in its proper order for the project to proceed. This affords a heavier-handed approach towards stakeholders as less flexibility can be allowed in order to move the project forward. Because of this constraint, a competitive strategy to resolve conflict can be deployed. If flexibility is allowable within the project step a more collaborative approach can be considered (Sutterfield, et al, 2006).
Successful conflict management within a project managed within a functional structure increases the likelihood of a project meeting with success. The Project-Conflict Management Framework developed from the DOD LAMP-H project provides Harrison-Keyes a methodology to resolve the current e-publishing project issues.
YouTube is a popular website that allows people to post, watch, and share video clips at no charge. While the site was initially created so the designer could share home movies with family members in other states, the website quickly caught on with the public and was soon a household name. In October, “2006 web juggernaut Google purchased YouTube for 1.65 Billion dollars in stock. Some analysts considered this a risky investment despite the 100 million plus page views YouTube receives daily” (Wood, 2006). In an article written by Daniel Wood of the Christian Science Monitor “many users cannot get enough of the idea and love the service because it is entertaining, informative, and a community of sharing things; but some concepts are too good to be true” (Wood, 2006). At any given time there are thousands of copyrighted videos illegally being shown on YouTube. “YouTube completely missed the boat by not immediately identifying the risk with allowing users to upload videos and making deals with television and movie studios prior to launching their service” (Wood, 2006).
As news of lawsuits and boycotts spread YouTube has taken the stance that they have done everything in their power to remove copy written material from their site and are also quick to remove any videos that receive a complaint from a studio. Some users have received “cease and desist” letters from attorneys and are facing the threat of a lawsuit if copyrighted material is not taken down immediately (Wood, 2006). Recently Viacom announced a one billion dollar lawsuit against YouTube while accusing the company of “massive intentional copyright infringement” (Cashmore, 2007).
Although consumers seem to enjoy the unlimited access to copyrighted work, other stakeholders are not dealing with the risks as well. “YouTube board members are becoming increasingly skeptical and worry that impending lawsuits and copyright issues will eventually do them in since they are not making a large profit” (Cashmore, 2007). In their defense the creator of YouTube obviously did not recognize the scope of this type of service in when it was created but Google knew exactly what it was getting into when they purchased the upstart company.
Prior to Google purchasing YouTube members of the media predicted that the lack of a business model and persistent problems with copyright would eventually bankrupt the company (Murray, 2006). Analysts were comparing YouTube to Napster and imagined the company would soon suffer the same fate as the former king of peer to peer file sharing.
Google undoubtedly recognized the risk involved with their purchase of YouTube but due to their deep pockets they can afford to take that risk while working on a solution that can appease copyright holders. “What Google ultimately wants to do is work with the companies that have their material posted by others on YouTube and give them a share of the profit from the add revenue” (Taylor, 2006).
In order to do this, Google will have to create a suitable formula for projecting profit amounts and will then have to negotiate with outside companies for agreements to avoid future legal issues. The explosion of YouTube has excited consumers and led some to predict the end of television reign, but has caused issues for almost everyone else involved. There was no legal and/or contractual consideration involved during the design or implementation stage and a strategy was never identified along with the project details.
eBay Incorporated is an online auction site that provides buyers and sellers a place to trade goods and services for a fee. The site has made billions of dollars as the world’s largest online marketplace without the use of warehouse space, inventory or salespeople. “Pierre Omidyar initially launched Auction Web during the infancy on the Internet in 1995 as a market to sale collectible and rare items. Auction Web incorporated and changed its name to eBay in 1996 as the site was becoming more popular with everyday users” (Marketline, 2006).
“PayPal was launched in 1999 under the name Confinity. The idealistic vision of the company was one of a borderless currency free from governmental controls. However, PayPal’s success quickly drew the attention of hackers, scam artists and organized crime groups, who used the service for frauds and money laundering” (Grabianowski, 2007).
The payment system also caught on with the online auction community who found it was a safe and easy way to make and receive payments for goods without having to exchange sensitive information. “The site grew far too quickly for PayPal to handle and as a result the customers suffered” (Marketline, 2006). PayPal was able to work out some of the issues associated with their system but for the most part were always one step behind the criminals and scammers that were a threat to their system. When dealing with money it is essential that the risk is evaluated prior to taking the first transaction.
In July of 2002 eBay announced they were purchasing PayPal for 1.5 billion dollars and phasing out their own fledgling payment section. While some
buyers and sellers assumed PayPal is a bank, PayPal is actually an “account based system that services approximately 96 million total accounts which are available to users in 55 markets. The 96 million total PayPal accounts include approximately 19 million business and 77 million personal accounts” (Marketline, 2006).
With the deep pockets of eBay behind the company, analysts assumed the security issues that were prevalent in the early days of PayPal would be quickly shored up. In fact fraud was occurring on the PayPal system in record amounts and the payment system soon caught the eye of government regulators who were forced to step in and investigate. “Regulators and attorney generals in several states, including New York and California, fined PayPal for violations and investigated the company’s business practices. Some states, such as Louisiana, banned PayPal from operating in their states altogether” (Grabianowski, 2007). PayPal has since received licenses to operate in those places but lost millions of dollars in revenues while playing catch up.
Security issues were not the only problem that PayPal faced. In October of 2004, PayPal experienced five days of power outages. The Sudbury Star reported “continued intermittent service outages despite furious attempts to repair the ailing online payment service” (2004). There was a possibility that due to the system setup and lack of redundancy across the network that many accounts could be lost forever or profoundly affected by the power losses. PayPal had been playing catch up since 1999 and it looked like time was catching up to them (Grabianowski, 2007). The power outage allowed some but not all users to complete online transactions which resulted in a very frustrating situation for PayPal users and caused some long time account holders to close their PayPal account altogether.
General Electric Co. – Robert Reimer
_Similar Issue Facing GE/Harrison-Keyes Publications, Inc._
Harrison-Keyes is faced with a corporate culture that is different for every department. Corporate politics has become the norm for any decision that needs to be made. The corporate culture that fosters a self-centered approach to results, coupled with their lack of project structure, has led them to failure to implement a successful plan. General Electric (GE) has faced similar issues in its long and illustrious history and has dealt with them in such a way as to build GE into a recognized global business leader. Specifically, GE has the following issues that they have confronted and that currently face Harrison-Keyes: 1. Aligning organizational culture with project structure to achieve their corporate strategies, 2. Create a corporate culture that does not tolerate corporate politics and in fact breeds a cooperative environment between management, employee, and the customer/authors, and 3. Identifying managers that are talented and that will perform.
_GE’s Response to the Issues_
The former CEO of GE, Jack Welch, the recognized business leader of the twentieth century, has stated that “If you ran a baseball team, who would you want to hang out with? The head of player personnel or the chief accountant?” (ABA Banking Journal, 2006) Mr. Welch’s point is that in business, as in sports, “the whole game is about talent-whoever fields the best team wins. Nothing you do is more important as building talent. Spend at least half your time developing people” (ABA Banking Journal, 2006). GE has developed managers by encouraging their input and to take chances and by allowing them to take on leadership roles at young ages. GE has relied on performance based initiatives and rewards risk takers. As Mr. Welch has stated, “give people chances to try new things and run things when they’re 30, not 50. If you’re spending all your time developing good people…they can’t wait for you to grow.
If you want new things, take care of the people who try things. When they make mistakes, praise them, or they’ll become afraid to make mistakes” (ABA Banking Journal, 2006). GE has also created a corporate culture that dismisses politics as a means to and end and encourages a culture that involves all members of the GE community, its senior management, its employees, and its customers. GE’s success has developed based on defining a corporate culture that is not individualized by department but practiced as an organization. GE’s success is based on the acronym LATIN. Leadership in that they make sure they have the right leaders for the job and at the right time; Adaptability by developing flexible strategies; Talent by investing in high potential people; Influence by being a company that is proactive instead of reactive, and ; Networks wherein expectations are met by maintaining discipline and consistency (PR Newswire, 2007). This creates a corporate culture that advances the overall goals of GE, involves the entire company, and results in not only the creation, but the communication of this culture that results in projects that are structured for success.
_Outcomes of GE’s Response_
The result of these corporate strategies and the resulting project structure has been that GE increased production and has empowered its employees by adopting a program called Work-Out (D’O’Brian, Joseph, 1994). This program was created following a “town meeting” format wherein employees at all levels are asked to gather and solve problems, ultimately coming up with solutions to specific problems. When they are done they pass these along to senior management. This program has changed the relationship between management-employee in several ways, the most significant being that it has “horizontalized the company to some degree: Individual accountability for specific products and functions is maintained, but it is easier for any employees to take a hand in improving the making or doing of any specific thing” (D’O’Brian, Joseph, 1994). As to identifying managers that are talented and will perform, Jack Welch, former CEO of GE advocates the policy of firing the worst performing staff on a yearly basis. Although controversial, this tactic has not harmed GE’s performance (MacAskill, John, 2007).