De La Salle University, Manila Ramon V. Del Rosario College of Business Term 2, AY 2014-2015
Report on Malard Manufacturing Case Study 6
In partial fulfillment for Management Principles and Dynamics BUS500M
Submitted by: Group I Animoza, Wabel Fernandez, Androlito Medina, Clarice Sandejas, Benedict Yu, Edilyn Ruth
November 8, 2014
I.
Synopsis
Malard Manufacturing Company, a producer of electronic control valves, is having problems meeting the deadline for the launch of its latest product, the CV305. The company’s Executive Vice-President, Ms. Crandell, received a memo stating that the CV305 must be launched in the market within 30 days to compete with the products of their competitors. However, due to the company’s corporate culture wherein they are only focused on their respective roles and lack of unity exist among departments, this might produce some setbacks in the development process of the product. Thus, Departments heads believe that the future work for this product should be done simultaneously with the help of other departments. II.
Statement of the Problem
What measures should Ms. Crandell undertake in order to ensure that the CV305 product will be launched in the market in 30 days? III.
Point of View
In this paper, we will be taking the point of view of Ms. Crandell, the Executive Vice President of Malard Manufacturing. IV.
Objectives
1. 2.
To launch the CV305 successfully within 30 days. To come up with an effective strategy/ structure for all the departments concerned in the development and production of the CV305 within the next 30 days. To implement these structural changes that will promote efficiency and cohesiveness among each department and in Malard Manufacturing as a whole, which can be applied in future rollouts.
3.
V.
Areas of Consi deration
1.
Product Rollout Process and Timeline
Currently, the Product Rollout Process in Malard Manufacturing takes 1-2 years for the introduction of a new product. This process has worked effectively in making Malard a price-competitive Control Valve manufacturer; however, the new CV305 must be rolled out in 30 days for Malard to keep itself competitive in the market. Strengths •
•
The existing rollout process is able to keep the company competitive in its market Employees are familiar with the current process and can follow it easily
Weaknesses •
•
Existing rollout process is the root of internal cross-departmental conflicts and disagreements Streamlining: Marketing Department is unable to give inputs to Research & Development Department, whereas
Production Department is unable to get their inputs across and Engineering Department wants to slow down the process to ensure product effectivity Opportunities •
•
•
Threats
Rollout Process may be done simultaneously rather than sequentially, as suggested by the Departmental Heads. A structural change in the rollout process may help Malard to be the first among its competitors in introducing products to the market. A faster rollout process needs to create a demand that will match the produced supply. Malard may create a need for faster Control Valve turnover among its users, or create new markets for Control Valve consumers. ‘
2.
•
The new product, CV305, may be unsuccessful if not rolled out in the market within 30 days. Loyal customers have now placed orders with competitors.
’
Depart mental Roles and Organizaional Struct ure
The key departments involved in Malard s Product Rollout Process are: Research and Development, Engineering, Materials, Production and Marketing Departments. The electronic software for control valves are currently outsourced. ’
Strengths •
•
Each department is well-equipped with necessary manpower to deliver their part of the process. Departments and their roles are established.
Opportunities •
Proper coaching of newly hired managers will make good leaders out of the company in due time. New hires may be easier to teach (old employees may tend to be complacent) and currently stand on neutral
Weaknesses •
•
Internal conflicts exist as departmental heads feel frustrated in their roles and have been uncommunicative towards each department. A number of departmental managers are new and inexperienced. It will take time & hard work to get them seasoned.
Threats •
If unresolved immediately, the internal conflicts may blow up and lead to further disruptions, prolonging the rollout process and potentially producing products that are not apt for the
ground. 3.
consumer.
Approval Process
All departmental heads consult with Ms Crandell, the Executive Vice President (EVP) of Malard Manufacturing, for each decision. However, for the project CV305, Crandell is unable to keep track of each detail due to the project s large coverage. She must now launch the product within 30 days. ’
Strengths
Weaknesses
· There is a point-person who is in-charge with all the details and decisions in the Product Rollout Process.
·
Opportunities
Threats
· Distribute decision-making process evenly by streamlining procedures and information to the departmental heads in the company.
· The company crumbles in the absence of its EVP who is the only backbone of the product rollout process.
VI.
The setup is only effective when the organization is small. With the CV305 s large coverage, Crandell is unable to keep track of all details. · No secondary point-person nor a group of leaders who may oversee the whole process in case Crandell is not available, exists. ’
Discussion of Framework
In every organization it is vital to have a structure so that it can be well managed. Having this structure provides ease in decision-making process, dictates who reports to whom and who makes the final decision. This also helps the organization in checking the process, in the case of Malard, their product development process. In the case of Malard, the organization is using a vertical structure since it is a big company with 1,400 employees as stated in the case. According to Allbusiness.com, Vertically structured or “tall” companies have a chain of management, usually with a CEO at the top making decisions and then delegating authority to lower level managers. In the case of Malard, they have the Executive Vice President (EVP), Ms. Crandell who is part of the top decision makers and Department Managers of different divisions to supervise the product development of the company. On the other hand, horizontal structure also called flat, companies have almost no middle managers-meaning that high-level managers handle day-to-day tasks and usually interact with customers and frontline employees personally. In this case, Malard is also utilizing this structure since Ms. Crandell is very tight with the control over the organization and handles the interaction with the Department Managers.
“Companies with a tall organizational structure are better at designating tasks to employees or departments within the company, have well-defined responsibilities for employees, and are generally easier to manage, according to Practical Management. In addition, they are dependent on a strong leader at the top. Weak upper management means that each successive hierarchical structure will get frustrated by poor decision making by the superior. In this case, we used the M-form, U-form and Matrix f orm to identify which structure best suits Malard to develop a more viable development process and structure to prevent losing customer leading to profit loss. It is evident that Malard is already using the U-form or the Unitary form. According to Qin Xiao (2004), “the U-form structure was widely used before the emergence of the large modern enterprises” (p.34). The earliest vertically integrated large enterprise usually adopted the U-form structure, an organizational structure in which general managers directly manage the operation of the company through various functional departments. M-form on the other hand or multidimensional form divide the company into several business units and allow them to operate autonomously. In the case of Malard, they have several departments (i.e. Research and Development, Materials etc.). The innovation of the M-form structure lies in the establishment of better coordination by the company. In the case of Matrix Form which is the one that best suits the company of Malard, attempts to use the advantages of both u-form and mform design by having each organizational unit answerable to different organizational leaders for different aspects of the work performed by the unit. The use of Matrix Form in a sequential manner will allow the company to have standard procedures while getting inputs from different department managers and having a final decision from the top decision maker. Contingency Theory which deals primarily with conflict was also used in this case. In previous cases, we know that conflict in an organization should be taken out of the scenario and avoided at all costs. Conflict is unavoidable, but according to Contingency Theory it is manageable. In the case of Malard, the interdepartmental conflict and disagreement among departments can be handled if the organization will evolve to meet their own strategic needs in rational, sequential and linear ways. The managers must be able to make decisions contingent on current circumstances to help the organization.
VII.
Alternative Courses of Action
ACA 1: To re-adapt Vertic al Stuctur e of Organization (Uni tar y). Conti nue w it h th e Sequenti al fl ow of production and shorten production timeline. Malard, under the supervision of Ms. Crandell shall continue to delegate her authority to department heads. Cut off unnecessary steps to focus on product testing to ensure desired outcome of CV305. PROS ●
●
Chain of command is not broken and decisions coming from the management are communicated and carried out with precision. Cutting off unnecessary procedures in the
CONS ●
●
Since departments are independent from each other, they will lack coordination and may not execute proper delivery of departmental functions. Specific details in the design, development and
●
design, development and production of CV305 shortens the process and gives more t ime for testing the product. Speedy deliberations and prompt action in case problems may arise from the course of each departmental tasks.
●
production may be overlooked because of fastpaced process. Department managers still depend on Ms. Crandell’s supervision and miscoordination among departments still pose a problem irregardless of shortened timeline.
ACA 2: To adapt to th e Mu lt id im ensio nal Horizont al Str uctu re of Organi zation and car ry out tasks simultaneously (for the current project) and then re-adapt the Vertical Structure of Organization later on This structure shall focus on specific functions of departments and will speed up the process of production for the current project. Once they are able, the current Vertical Structure of Organization can be reviewed. PROS ●
●
●
●
Concentration on R&D, design and engineering and production by respective departments gives focus and polish on their specified functions. Conflict in a single departmental function will not involve other departments and assigned managers can immediately take action and decide on how to stay attuned with the project’s goals and rollout process. Ms. Crandell can leave the department heads to manage each step of the rollout process and come up with the best strategies they could decide on to produce CV305. (For the shift to the Vertical Structure later on, same pros as for ACA1)
CONS ●
●
●
●
Each department may be too focused on their specific functions that they fail to coordinate properly necessary informations and plans with other departments regarding specifications, design, and prototype engineering. Decision making requires involvement of each department and having several incoherent decisions will cause delay and need ample time for deliberation. Discrepancy on departmental subcultures may arise and can add frustration and delay. (For the shift to the Vertical Structure later on, same cons as for ACA1)
ACA 3: Adapt Mat ri x s tr uctu re of Organizat io n and deliv er departm ental t asks sequential ly. The company will adapt a dual-chain type of command. Coordination and collaboration among units can make the project successful. PROS ●
Decision making with regard to design, engineeing and production of CV305 is dynamically deliberated and scrutinized. Ms.
CONS ●
Since the Matrix structure entails having different departments collaborating, dual-chain of command may result to conflict and
●
●
●
Crandell’s heavy responsibility will be eased. Steps are cross-checked by different departments involved in the process. This means each department is accountable to the work of other departments. Sequential process will entail careful and detailed manufacturing of the product. Collaboration among departments will speed up the process of making a functional product ready for the market in 30 days. Ms. Crandell can easily make final decisions based on each department manager’s recommendation.
VIII.
●
●
●
disagreement that could delay the pr ocess instead of expediting it. Managers might spend a great deal of time holding meetings, taking time away from core work activities. Disagreement may arise from insubordination because of the dual-chain of command in this kind of structure. Having two bosses could create confusion on the part of the employees. Approval of a certain decisions made by each department has to be reevaluated by the succeeding department and so on.
Recommendation
ACA1
ACA2
ACA3
Obj.1 - Launch the product in 30 days (40%)
30
40
20
Obj.2 - Develop a strategy/structure for development (30%)
30
30
30
Obj.3 - Implement structural changes (30%)
20
20
20
80
90
70
TOTAL
We recommend ACA 2. This ACA is the best scenario that will allow the company to meet the target deadline of 30 days, without sacrificing quality. No time is wasted. After this development cycle, they will have time to review their processes to prevent this type of problem from happening again. For ACA 1, there is a big risk that the product won’t be launched in time. Time will also be wasted in re-adapting their development processes.
7S Framework: Strategy: the plan devised to maintain and build competitive advantage over the competition. Before Their current strategy involves updating their products when new developments in technology occur. Their development process starts when the technology is already there. Development is sequential, leading to delays when one of the process has to be repeated. Regarding marketing, it is unsure of what was done in the past. It is unsure how customizations in customer orders were treated.
●
●
●
●
After Engineers should attend seminars early to update themselves on trends in development so that if/when the technology is already available, they are prepared to incorporate it Moving to a simultaneous development ● process promotes forward movement should be marketed early on. ● Products Regular customers should be informed about the CV305 and future products early (the product doesnt even need to actually exist). Preorder discounts be given to beat out competitors. Customizations can be considered early on ● instead of it being a post-production activity. ●
·
Structure: the way the organization is structured and who reports to whom. Before ●
The current Organizational structure was focused on several department managers/heads reporting to the
After ●
Given the importance of product development, a Production Development Manager should be appointed to oversee
●
Executive Vice President, who likes to keep a tight control over the organization. It is too centralized and delays in the approving processes will occur.
●
the entire cycle. The EVP is too high up and won't be able to focus on product development. Approving processes should be analyzed and sped up.
Systems: the daily activities and procedures that staff members engage in to get the job done. Before ●
It was not indicated what systems exist in the company. There was also no mention of any monitoring/evaluating procedures, as well as any internal rules or processes.
After ●
Investing in Time Management Systems as well as Production Management Systems can help the company identify bottlenecks as well as areas where processes can be shortened due to slack
Shared Values: called "superordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic. Before ●
It is unsure what the core values of Malard are. There is also no mention of the fundamental values the company was built on, and if these values are still being practiced.
After ●
●
●
A review of their Mission and Vision should be done. Promoting a culture where products of high quality should be encouraged. For marketing, a culture where after sales support matches the industry standard should be supported. This will help them later on during the next production cycle.
Style: the style of leadership adopted Before ●
It is not clear about how the EVP, Ms. Crandell, manages the company. Although it was mentioned that she wants to keep a tight control over the organization, it wasn't
After The EVP should designate a product development manager to directly oversee the product development. This will also allow the EVP to focus on other areas
●
●
●
mentioned how this is done. However, it seems she no longer had any time to monitor the CV305 development. Employees don't seem to be cooperating with one another across departments. The teams functioning within the organization are more divisional and team members don't seem to interact outside their department.
outside production development which, if addressed, can possibly lead to beneficial effects on product development. A culture where cooperation between ● departments at the rank and file level can benefit the company since it can eliminate red tape for simple matters. Nominal teams should be designated ● which promote brainstorming which can be beneficial for the company.
Staff: the employees and their general capabilities. Before ●
After
It was unclear as to which departments have new managers who are inexperienced in product development. Given the limited time that the company has, something has to be done.
●
●
· Skills: the
actual skills and competencies of the employees working for the company. Before
●
Given the limited time that we have, a short term solution involve filling the gap in knowledge by relying on department officers/supervisors to give more assistance to their new managers who are novices when it comes to new product development. The long term solution would involve them reviewing their past products and the accompanying documents related to their development.
It is implied that Malard is a company that can cope with changes in technology and can implement these changes into their products. There is no indication that there are any gaps in their skills.
After ●
Since there are new managers, training on new product development skills must be done before the next round of product development is done.
IX.
Learning
Manufacturing companies like Malard has to be fast and equipped with effective structure. It is vital for them to be prompt in decision making and to be able to determine people responsible for different areas especially when it comes to the production and development of a specific product. Redesigning and finding the most suitable structure in different work and company setting will help increase one’s profit, hasten the task and identify problems that have not been addressed. Proper coordination among departments is also necessary to keep track of every activity of the company. Also, conflict among employees should be avoided as much as possibles and dealt with in a professional manner. Cliche as i may sound, but the only thing that is constant is change. A company could adopt a vertical structure and then next thing you know they are using that horizontal structure. As the world is being globalised, customers will demand faster and better service which horizontal structure gives best. But to be a company with a good structure, you have to have the best of both worlds.
X.
1. 2. 3.
4.
References
Dyck, B., & Neubert, M. (2012). Management: Current Practices and New Directions. Cengage Learning. Silbiger, Steven Alan. (2012). The Ten Day MBA: A Step-by-step Guide to Mastering the Skills Taught in America’s Top Business Schools. Harper: New York, New York. The Vertical Structure Vs.The Horizontal Structure in Organization retrieved from; http://smallbusiness.chron.com/vertical-structure-vs-horizontal-structure-organization4904.html The Theory of the Firm and Chinese Enterprise Reform: The Case of China retrieved from; http://books.google.com.ph/books?id=ryQOXMg358C&pg=PA32&lpg=PA32&dq=U+form+theory&source=bl&ots=j5LM6cJt_E&sig =l1awQfTjAnEU52UmWxY2v2hfdZM&hl=en&sa=X&ei=66xXVOyEOYm4oQSblYKoDA&ve d=0CD8Q6AEwBQ#v=onepage&q=U%20form%20theory&f=false