The Twin Paradoxical: Acme and Omega Electronics Study Case
The Paradoxical Twins: Acme and Omega Electronics E-mail : rinomichael@yahoo. co. id Introduction: In this case, two similar electronic companies named Acme and Omega, Which situated closely one to another. Both of them are originally formed from the same company, but they grew into completely different companies. Below listed their company details and unique points, right after company’s establishment: Acme: Company size: 550 employees, with annual sales $10 million The president: John Tyler
Retaining the original management and upgrading general manager to president Has a relatively more effective management and bigger net profits Management culture: bureaucracy/ hierarchy culture, it is stated by John Tyler “he retained the basic structure” and company has a well structured organization chart. Management get used to routine and predicted activity, stated in “Tyler was confident that has the demand had not been so great…. ”, and “we have been able to beat Omega regularly.. ” Omega: ? ? ? ? ? ? Company size: 480 employees, with annual sales $8 million
The president: Jim Rawls Hired a new president who is a former director of a large electronics research laboratory, and upgrading several of the existing personnel within the plant. Relaying on face to face communication which leads to ineffective time management. Management culture: adhocracy/ entrepreneurial culture, stated in “Jim Rawls did not believe in organization charts…”, “.. people from mechanical, electrical, production and industrial engineering got together.. ”, and “Jim Rawls called a meeting on Friday, July 8, that included all departments head.. ”
Team oriented and project based organization are used, based on Jim Rawls’ background as a researcher and his capacity as the president. Case Summary: In July 1996, on of major photocopy manufacturer was looking for a subcontractor to assemble the memory unit, whereas this project worth $5-7 million. This project required 100 prototypes, and speed is a critical factor indeed. Both Acme and Omega had at most 2 weeks to get this project done. Acme Timeline: Monday (July 11th): Blueprint arrived and purchasing decision has been made by purchasing department.
Tuesday (July 12th): mechanical engineering received manufacturing prints and evaluated their capabilities in completing this project. Wednesday (July 13th): Purchasing found that a particular component could not be purchased due to summer vacation in manufacturer region. Tyler decided to continue on producing with the missing component, and add the missing on the last stage. Friday (July 15th): Mechanical engineering informed an additional assembly time might be occurred because of the missing component. Monday (July 18th): Tyler got information from shipping department if most of the component has arrived.
Foreman ignored the normal procedure of contacting method engineers due to time limit. As a matter effect, the method engineers were very upset because they have no chance in designing proper layout. They had spent an entire weekend in analyzing the motion needed and his process was very inefficient and imbalanced. The foreman refuses to stop working, due to short time limit. Tyler got himself complained by the method engineers, but no one of them could change his decision and he wants to get all the prototypes ready as soon as possible. They just said each other if the units must be almost completely tear down in installing the missing unit.
Friday (July 22nd): They have their last unit produced Tuesday (July 27th): Missing parts have delivered Wednesday (July 28th): Foreman found that they have to tear the units to install the missing units. Thursday (July 28th): Tyler decides to tear down all units. Friday (July 29th): 50 units of prototypes have been completed, and shipped without final inspection. Tuesday (August 2nd): The rest 50 units were shipped Omega ? ? ? Friday (July 8th): Jim Rawls called all department heads, and soon after he had received the blueprints. Monday (July 11th): Blueprint arrived and all department heads met to discuss this project.
Wednesday (July 13th): They found that one component would not be ready in the next two weeks. Substitution of component must be made to keep the assembly time by using Ja pan material. Friday (July 15th): on process, industrial engineering department reported that the missing component would increase the assembly time. Relaying on this, the head of electrical engineering tested and ensured that the Japan component will definitely work. Monday (July 18th): All engineering gathered in finishing the units needed. Friday (July 22nd): all units were completely inspected and shipped.
As a result, ten of Acme’s units were defective, while all Omega’s units passed the test. The client was disappointed with Acme’s delivery delay and incurred further delays in repairing the defective Acme units. However, rather than giving the entire contract to one firm, the final contract was split between Acme and Omega, with two added directives: maintained zero defects and reduced final cost. Analysis: 1. The importance of organization chart On the writer’s point of view, well structured organization chart is critical to illustrate distribution of management structure.
This opinion supported by Colquitt which said organizational chart helps organization members and outsiders understand and comprehend how work is structured within the company (Colquitt et al, 2011). Based on Harvard Business Review, there would be several disadvantages occurred within a management with not organizational chart, which listed below: a. The “unworkable” job: an unworkable job means the absence of organizational chart, brings an unclear distribution or task and responsibility. One man has to do several tasks within the same time and reports to several bosses.
As a matter effect, some tasks won’t be completed and reported when the time needed. b. Politics: An uncertain organization hierarchy often influences members to reach the highest level of organization hierarchy. Even more, inappropriate behavior might occur to get a higher authority and power. c. Over-regulation: The absence of organizational chart leads to uncertainty for job approval. One project must be approved some of majority member of organization before comes to realization. d. Cultural clashes: Unavailability of organizational chart often leads to unidentified organizational culture.
Each member claims their own culture and also bring their previous company culture. 2. Distribution of authority in both company Based on Colquit (2011), elements of organizational structure divided into: a. Work Specialization ? Acme: individual specialization is used in Acme, where well structured of work flow has been divided into several steps of flow which given to different specific department. ? Omega: team work is used to bring the best performance, since the tendency is to get everyone involved in finishing one project. Everyone has almost similar knowledge and skills since everyone does all things together. . Chain of Command ? Acme: Well structured chain of command in Acme, creates a clear reporting order from subordinates to the manager. ? Omega: Group approval is needed since almost everyone has an obligation to do everything together. Moreover decision can only be produced after team discussion. c. Span of Control ? Acme: Tall organization chart symbolized this p of control which in Acme it is shown by the organizational chart. ? Omega: Relatively flat organization chart, even though there is no organization chart. In Omega, everyone has almost the same responsibility and authority. d.
Centralization ? Acme: Centralized decision maker where Tyler as the decision maker or Tyler’s approval is the key point on organization activities. ? Omega: Decentralized decision maker, where everyone was involved by Rawls. e. Formalization ? Acme: Standardized procedure with specific rule set to maintain working behavior in Acme, such as using memo as communication tool (Mechanistic Organization). ? Omega: Flexible procedure and direct communication were highly encouraged to avoid misunderstanding in Omega. The Organizational dimensions displayed as below: Source: Colquitt, Jason A et all (2011)
3. The influence of company strategy to company distribution of authority Colquitt (2011) mentioned that company strategy has an influence on organizational structure, which described as below: Mechanistic Organization Acme has a mechanistic organization where the efficiency strategy, and work specialization are the unique mark of this organization. Organic Organization Omega has an organic organization where lateral communication, decentralized knowledge, and low degree of work specialization to maximize organization performance.
4. Cost efficiency failure in Omega In writer’s opinion, there are several inefficiency recourses in Omega which ead to higher cost, which described below: ? People Management Rawls encourages everyone to get involved in certain project even though they not directly related with such project. Moreover, direct contact and discussion are recommended to eliminate misunderstanding. Time Management Inefficiency of people management causes inefficient time management which several jobs can’t be completed in the same time, whereas everyone involved in one job. ? Resource Management Omega has a tendency in wasting resources for a fast solution. In this case, Omega uses substitute product to replace the missing component. Even it’s perfectly fit with the requirement; this solution increases cost of production.
5. Personal recommendation to Omega Washington University highly recommends the organization restructured in Omega for a better management role. Well structured organization will give a clear view of everyone role, responsibility and authority. This recommendation can be broken down into several actions which are: ? Restructuring Organization Restructuring organization includes creating clear job description, organizational chart, adding and eliminating position. Omega should define each member’s position, task, responsibility and authority. Forming Labor Relation Labor relation is important in manufacturing company, since large numbers of labor are employed. This organization utilized as the communication medium between labor and company management. ? Change Management Change management is needed in restructuring organization, since many things must be socialize to different. This team prioritizes the change order and methods. References Books: Colquitt, Jason A et all. (2011). Organizational Behavior “Improving Performance and Commitment in The Workplace”. McGraw-Hill Internet Corkindale, Gill. Harvard Business Review. org washington. edu
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