1. At the end of Part I, how would you describe the organization design of both Omega and Acme? What factors led you to this conclusion?
By the end of Part I, it is clear that Acme is a more mechanistic organization focusing on efficiency and profits, while Omega aligns itself with an organic organization structure focusing on cooperation, collaboration, and integration.
Acme is mechanistic with a clear vertical structure; this conclusion is reached when looking at various factors. Factors include the degree of specialization, formalization, and centralization. Mechanistic structures are highly specialized, highly formalized, and centralized similar to Acme. Specialization can be seen through narrow job descriptions with clear responsibilities, while high formalization can be seen through the well-defined organizational charts and “tight ship” management style. The high level of both specialization and formalization indicate a centralized environment, which is verified in Part I by the fact that managers wish they had greater decision-making influence (“more latitude”). Furthermore, the structure at Acme has an end goal of efficiency and cost control, similar to most mechanistic organizations.
Omega, on the other hand, has an organic structural design with an emphasis on collaboration, cooperation, and employee satisfaction across and among departments. This emphasis shows Omega’s focus on effectiveness, especially in the internal process, which combined with management’s team-based emphasis on making everyone feel as if they are part of the team and taking the time to listen to suggestions (a little too much time occasionally) furthers the conclusion that the company is organic. Furthermore, CEO Rawls does not believe in organization charts or written memos indicating low formalization and a decentralized decision-making process (without organization charts, authority is less defined). Low specialization can be
seen through one workers initial experience at Omega where he or she worked in two different departments within the first two days. Both facts (low specialization and formalization) are indicative of a horizontal structure that aligns with the conclusion that omega is more organic.
2. At the end of Part III, how can you explain the differences between what happened at Acme and at Omega? (Link the background facts with the behavior and problems and then to the outcomes observed, and then explain the relationships between these three elements.)
At Acme, Tyler led the authority and assigned tasks to each department once the project came in, but cross-department communication was lacking. The rigid organizational structure with set rules and procedures did not allow for the departments to collaborate. Instead, departments were functional and focused only on the task for their section. Furthermore, Tyler was not being informed of the errors occurring in each department perhaps because in a large, hierarchical system it takes longer for information to reach its end destination (whether that be the top or bottom). His “hit the roof” mentality took a blame approach, which is not productive for employee morale.
The photocopier manufacturer mentioned that in this phase, speed was critical. Mechanistic structures work better in stable, known, simple environments where situations are routine and the goal is control and efficiency. This prototype production process involved greater uncertainty considering the prototype had to be produced before final designs were approved. Furthermore, the routine for this process was still being developed. Due to the unknown, changing, and non-routine nature of this project, an organic structure such as Omega was bound to due better because it is more flexible and adaptable.
At Omega, Rawls immediately set up an initial meeting where all the departments heads could discuss the project together and collaborate. Though the start up time took longer this way, problems were solved up front so time was saved later, quality was improved, and bottlenecks reduced. Cross
communication and collaboration is key with a non-routine process and greater interdependence level was required. The level of interdependence required proved to be a negative aspect for Acme due to the lack of cross-department communication, but worked in Omega’s favor.
It is important that structure align with strategy, and in this initial case Omega’s organic, team-based structure aligned with the speed strategy that the photocopier had required. When information is shared in a quick manner, without vertical impediments, the whole process moves along much more quickly and collaboration enables efficiency.
Through coordination and the team-based mentality at Omega, the company was able to take a problem-solving approach and address issues of design errors up front whereas Acme did not even realize the design flaw because of the organizations focus on high specialization. Each department focused only on what they specialize in so errors were nearly impossible to catch. Acme’s inflexible structure required the company to go back to the beginning when the new design was approved, setting the company further back. Omega, on the other hand, adjusted easily to the new design because of its adapting nature.
Tyler, as a leader, made the mistake of assuming the team would work as efficiently as they have in the past considering this project was a rush priority with a different required strategy and different end goals. Tyler made it a point to communicate new developments to the photocopier company, but he did not communicate any of the issues/developments that were arising. Rawls, on the other hand, communicated instantly with the photocopier company once the flaw was discovered.
Essentially, the problem was the same for both companies—certain parts could not be received on time and engineering the assembly was difficult. However, how each organization approached the problem, as led by the type of structure in place, is what led Omega to succeed and meet the speed deadline determined by the photocopier company. Omega’s organic, adaptable, collaborative structure was more efficient for problem-solving scenarios,
which this project was and allowed Omega to meet the deadline 10 days before Acme and with greater reliability. Acme’s vertical structure with rigid procedures would take longer to communicate problems from the bottom to the top. It took longer time to take action with Acme’s formal, hierarchical structure. These factors combined with its inflexible nature led Acme to be outdone by Omega.
3. At the end of Part IV, how can this turnabout be explained?
Ultimately, the goal for phase two, once the prototype was developed was to cut costs and ensure quality control. Given that the production process had already been created, this second phase project had a greater degree of certainty and routine. Once each company figured out how to engineer the assembly, the process became routine, which is better suited for a mechanistic structure. If your end goal is to cut costs, specialized and rigid structures are better and more efficient as Porter’s low cost strategy shows.
The degree of routine allowed each functional team (department) at Acme to focus on their specialization, which eliminated the problem of quality control. There was no guessing this time of how to best assemble the product. More time could be spent on figuring out ways to cut costs. When control and efficiency are the end goal, a mechanistic structure works better than an organic, adaptable, and problem solving structure. Organic structures are contingency-based, which was not as helpful in this case because of the greater degree of certainty.
Omega should have been seeking ways to reduce costs, but instead focused too much on collaboration this time and on the management philosophy of maintaining employee satisfaction. Once again we see that when strategy (low cost) does not align with structure (organic), the end result is not achieved. Omega’s lack of detailed organization charts and specific job responsibilities most likely created internal confusion as well.
At Acme tasks became standardized and job roles were well defined. At Omega,
job roles were not clearly defined, and it is possible that, as mentioned earlier, too much time was spent on “listening to suggestions and making sure everyone understood what was going on.” While Acme was focusing on doing things right, Omega was focusing on doing the right thing. Also, considering the high volume that needed to be produced, it makes sense that Acme received the contract in the end since the company specialized in low cost, high volume projects.
4. If you were to consult with the Presidents of Acme and Omega, what advice would you give (to each one) concerning future survival and success of their firms? Explain your reasoning.
What each company should learn from this example is that it is never ideal to be too mechanistic (rigid and structured) or too organic (loose and flexible). Each has its benefits depending on the type of project and what the end goals are, but as this case demonstrates each company failed at least once and succeeded once. Acme’s president should try to integrate some organic components into their structure, and Omega should integrate mechanistic components into their structure. A hybrid system would be ideal to get the best of both structures. A matrix, in essence, would prove to be a more efficient and effective structure. Well defined authority structures are needed so that workers are not confused about what their roles and tasks are, and collaborative environments should be encouraged as well in case there are times where problem solving needs to be done.
To be more specific, at Acme, instead of acting as functional teams, the teams should be cross-functional which allows for collaboration, and the managers should be given a greater level of decision-making power (increased lateral). Something needs to be done so that it does not take so long for information to travel. Tyler should consider investing in an HR department if one does not already exist and on the internal environment because satisfied workers are generally more efficient. If a worker feels like they are a part of the team, he or she will want the company to succeed and work better towards that goal. Tyler should have department heads be on the same horizontal level and ensure cross communication occurs. So that he doesn’t
have to do this himself, the idea of a project manager can be introduced. Someone from the outside can be brought in to coordinate between the departments and ensure deadlines are being met and that solutions are being worked on when a problem arises.
At Omega, job responsibilities should be narrowed and clearer and greater measures should be taken to maintain control. There should be some sense of an authoritative figure or two. There seems to be a lack of line authority and without unity of command, there is room for confusion. Rawls should not spend so much time listening to suggestions and can instead hire someone to do that for him. As head of the company, he should be focusing on bringing in business and not trying to micro-manage everyone. In this company, there is too great a degree of lateral structure. Instead of everyone meeting together all the time, only department heads should be meeting regularly. The heads can have greater discussion with their own team and then report back to one another. A structured flow of ideas will save time. Greater specialization and formalization is needed because if workers are unsure of what their roles are how can they be expected to perform. Broader categories can be established such as marketing, operations, engineering, etc. Rawls should also look into written communication to ensure the company is well organized. Meetings take up a greater amount of time, and with writing there may not always be a need to physically meet.
It is important to remember that structure and strategy alignment will lead to success. Therefore, the structure must be somewhat flexible to adapt to strategy, but rigid enough to address end objectives such as cutting costs and maintaining efficiency. The matrix structure is the ideal balance, combining the best of both mechanistic and organic to achieve business objectives. The best part is that it can be tailored to each organization so Acme can retain it’s vertical nature for the most part and Omega can still focus on collaboration, but elements of the opposing type are introduced to achieve greater balance.
“This is my own work. I have not discussed this case with anyone, nor have I used someone else’s write-up of the case, either current or past students or
from the Internet.”