Organization Design & Change

Assignment 4: The Paradoxical Twins

(A) Why did Omega discover the design problem, but not Acme?

After taking up the contract, Omega’s President Jim Rawls discussed the company’s
go to strategy by including department heads of each department associated with
the project. Instead of telling them what to be done and how, he gave them the
power to decide and plan how to do the work. Due to organisation’s flat structure,
there was consistent communication between different departments and they also
proposed ideas to help each other. Along with this daily meetings between
department heads and key personnel ensure that each department was aware of
developments in other departments. All these factors, created a healthy and
collaborative working environment due to which there was a higher chance of early
detection and proper rectification of a problem.

On the other hand Acme’s structure was mechanistic in nature, which led to
President John Tyler being the sole person planning and taking decisions regarding
the strategy to be taken up for completion of contract. Due to this no department
knew the importance and criticality of the contract and thus had less motivation or
were far behind schedules. Additionally, inter departmental communication was
absent due to which the different department’s schedule were not properly aligned
and were not aware of the updates in the other departments. Also, as they were
already running behind schedule and had had number of re-runs, their only focus
was on finishing the task.

(B) Why Acme was offered the final order even though Omega helped to rectify the
design?

The reasons for Acme being given the final order in spite of the fact that Omega
rectified the design are:

i. Acme’s President John Tyler was in constant touch with the clients, updating
them regularly about the manufacturing progress. This led to him having
good relations with the designer head of the photocopier manufacturer. In
contrast, Jim Rawls of Omega hardly stayed in touch with the clients and
communicated only when they found an error in the design of the connector
cable. Due to good relations build over time by John Tyler, he may be able to
exert pressure and influence the company to get the final contract.

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 ii. One of the directives given by photocopier manufacturer was to reduce final
cost. As Acme was able to reduce its unit cost by 20 percent, the profit
margin for the company would be more if they choose Acme given that their
defect rate were minimized.

(C) How do you compare the organizing logic of Omega and Acme?

i. The organizing logic of Acme and Omega were totally different form each
other even though they were formed from the same company and were
catering to the same industry.
ii. Acme chose to retain its original management which was mechanistic in
nature. The internal functioning was formal in nature – detailed organization
charts and job descriptions. The different departments worked in silos and
there was no inter department communication. The structure was seen as
efficient for high volume manufacturing. Also, most of the planning and
decision was done by the president rather basing than on discussion with
department heads.
iii. On the other hand, Omega as an organization was informal in nature with
lesser number of employees. The employees were not held back by any kind
of organization chart or specific job description. The rule of not allowing
written memo allowed better inter departmental communication and
everyone knew what was happening in the whole organization, irrespective
of which department they work in. According to mechanical dept. head much
time is sometimes wasted in making everyone understand about their
workings and taking suggestions.

(D) What is your key learning from this case?

i. Before starting any new project, all the departments (or stakeholders) should
be involved in the decision making process. Regular meetings should also be
done between these stakeholders to give updates.
ii. Error detection and correction should be incorporated from the beginning of
the project. As the project progress forward, the cost of error detection and
correction increases manifold.
iii. Keeping consistent communication with your client (external party) is also as
important as communication internally. The point of contact should regularly
update them so that they are also a part of the communication loop and
know the progress. Good relationship is also an important factor for
discovering more business opportunities for your organization.

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iv. The ideology and outlook of top leadership firm greatly shapes and influences
the organization’s way of working, attitude and culture.