The parado paradoxical xical twin: Acme and Omega Electronics “Case Study Analysis”
Submitted By: Diala Alkhawaldeh Reg. ID: 8090018 Course: Organizational Theory, Design, and Change
Supervised By: Dr. Samer Dheyat Table of Contents Introduction.................................................................3 Management Styles in Omega and Acme........................4 Effect of Management Style on Coordination at both Companies...................................................................5 The Final Decision.........................................................6 Recommended Changes for better Competition..............7 The Pros and Cons of Acme and Omega Merger..............8
Introduction In this case study analysis report, the case of Omega and Acme electronics plants will be analyzed. Both plants used to be divisions in the same organization Technological Products of Erie-, but currently are individual and competing entities after they have been sold out to external investors. The case we will be focusing on is an incident where both plants were competing to become a subcontractor for a photocopy manufacturer. Management styles and the process for meeting the specifications and the deadline of the subcontract will be analyzed. Suggestions for better competition will be presented, and merger between both plants will be evaluated
Management Styles in Omega and Acme Although both plants were divisions under the same company before, management styles differed when they became separate entities. In brief, Table 1 below compares those styles with reference to attributes in the first column, that serve as attributes for determining whether an organization is more like a mechanistic or an organic structure.
Structure Acme Argument
Omega
Specializa At Acme, the At Omega, the tion president retained president was had the original structure more tendency Type the plant had before towards getting the it became a separate job done rather that entity. The defining a structure organizational for the organization. structure was well People worked jointly defined, with high to coordinate their degree of division of activities and labor. Each accomplish their department goals. Hence, type of performed its task specialization here separately. Hence, is : Joint type of specialization here is : Individual
Integratin g Mechanis m
Due to the well defined, tall hierarchy of the organization, the basic integrating mechanism in Acme is: Authority. Who does what and who reports to whom were dictated clearly in the organization’s chart
As inspired by the president, high level of communication was fostered, where members simply met face to face or dropped by to discuss to talk things over. Hence, integrating mechanism used was: Direct Contact
Distributi on of Authority
Most decisions were issued from top of the organization down to its lower levels. Distribution of Authority was mostly centralized .
Authority was distributed as seen suitable. Important decisions were made by the management team, and others were left for specialists. This approach is more of a decentralized rather than centralized distribution of authority
Standardi zation of Rules
Most work was being done in an already defined way, were
Written memos were not allowed, verbal communication was
orders to start activities were issued between managers of departments, which tell us that Rules were standardized in a formal fashion.
highly encouraged but didn’t follow any workflow. Mutual adjustment was adopted rather than following written rules and instructions
Effect of Management Style on Coordination at both Companies Based on the previous section, structure arguments per plant had an effect on the coordination style as follows:
At Acme: The high formality of coordination, and the tall hierarchy of the organizational chart, has affected the way activities were being done. The most important effects can be summarized as follows: Little information was communicated with the organization as a whole and between different departments. 2- Lack of motivation, as some manager’s voiced. 3- Some inertia against trying new methods of work existed. 4- Coordination between divisions was not high enough that some important decisions were wrongly taken. 1-
At Omega: Due to the highly informal fashion work was being done in, employees had an ambiguous view of their own roles. 2- Information sharing was high among all levels, with sometimes caused a waste of time. 3- Innovative thinking was encouraged. 4- The work was highly collaborative. 1-
The Final Decision Acme has shipped the 100 prototypes on 2 shifts, and 20% of these units were found defective. While Omega has shipped the 100 units on time, and no defective items were detected. Despite of these facts, and although, as seen in the previous section, Omega was more effective than Acme, the photocopier manufacturer decided to split the final contract between Acme and Omega, under the conditions of maintaining zero defects and lowering the final cost Justifications of this decision could be: 1- Acme retained the original structure of Technological Products of Erie, and has been able to bean Omega in profitable contracts in the past. This has formed a good reputation for Acme that might have contributed in giving them a chance to have a portion of this contract. 2- Acmes price was slightly lower than Omega’s, and since the photocopier manufacturer have conditioned high quality, it might have been more profitable to choose Acme as well as Omega. 3- Omega was not rejected because that would be unethical and maybe illegal since they met the deadline and provided high quality inputs to photocopier manufacturer 4- It could also be possible that photocopier manufacturer protect itself from opportunistic acts by having link with more than one supplier.
Recommended Changes for better Competition Some changes can be made at both plants that would increase efficiency of work and hence enhance their competitive advantage against each other.
At Acme: I would be of great benefit of cross functional teams were introduced into the structure to handle jobs such as the one in this case study (assembling a new product). It would also be a great motivator and booster of quality of work if managers as well as specialists were given some open space to share their view collectively rather than the unidirectional channels that are adopted at Acme. This will also need a higher level of coordination between departments. Innovation should also be highly encouraged, due to the high pace of change and introduction of new products in Acme’s industry.
At Omega: The informal nature of the structure seems to be working fine, except that it needs a bit of formalization and clarification of people’s roles. This structure was a point of strength for Omega in this bid; however, it won’t work for other tasks that need faster accomplishments of activities. For example, instead of exchanging opinions and suggestions most of the time, this can be organized using information sharing systems that centralized al data that everyone in the organization needs.
The Pros and Cons of Acme and Omega Merger In the case of Acme and Omega, the high level of competition seems to be the main motivator for both plants to strive excellence, once they merge, this motivator will vanish. Another problem that might arise is a cross cultural conflict between members of the two plants. At Acme, every role is clearly defined, and the specialization level is high, while at Omega, roles are spread among members and specialization is not that high, conciliating such differences will be a hectic job. If those two issues were overcome, combining the well defined structure that Acme holds and the skills of its workers, with flexibility and the innovative nature of work that Omega provides, An Acme Omega merger would be a successful one and a great competitor to other plants in their industry.
