This is a tale of two companies that operated in a similar field. A large company bought a majority stake in another company. The new company was not interested in the electronics division the previous company had. Therefore, it sold this division to two persons. Acme Electronics and Omega Electronics were born. Subsequent operations in the two companies are the focus of the case study.
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Acme promoted one of the workers to be president while Omega hired an engineer of many years to be president. The case study reflects on their management styles, organizational structures and ways of motivating employees. Additionally, it focuses on operations and supply chain relations among others. Summarily, it contrasts these aspects regarding operations at both Acme Electronics and Omega Electronics.
These are interesting issues. This is because they are the focus of what some organizations worry about more than anything does today. Funny part is that during the time the two companies enjoyed maximum growth, the issues mentioned above were beginning to interest scholars.
Supply Chain Management became a home name and theories on motivation of employees were in sharp focus. Therefore, the two companies are like vintages whose prototype excellent management tactics were born.
In further discussion, I will mainly focus on operations, Supply Chain Management, Organizational Structure and Motivation as my subtopics. I will look at how these were critical issues during the heyday of Acme and Omega Electronics. I will contrast this with the focus of management in organizations nowadays.
I will also look at theories to bring these issues into a scholarly focus. Finally, I will propose solutions to these problems in both the current organization and the two organizations in the study. Definitely, I will use the case study as a point of reference.
I choose the topics because in the current environment for business, these are the most pertinent issues. Organizations want to optimize operations to reduce costs. At the same time, it is paramount to meet customer’s expectations and reduce wastages. It is also critical to keep employees motivated.
This is especially true as an organization deals with an array of different people. All of these people need a different approach to keep them motivated. The most notorious is Generation Y. How do companies structure their organization? This question generates so much discussion and hence the reason I will focus on it.
Supply Chain Management
This is a critical contributor to effectiveness and efficiency in an organization. It involves a calculated attempt to harmonize downstream and upstream areas of the supply chain for effective operations. At Acme electronics, this aspect does not feature well. It is important to know that a supplier closes for Christmas and to arrange to have necessary supplies during that time. However, a similar situation happens at Omega Electronics.
In the current setting, an organization may not survive the cutthroat competition without proper ways to ensure that no section of the supply chain is ineffective. It is unfortunate because it leads to disgruntled customers the effects of which is wide ranging. A company should know everything there is know about a supplier. It should also simulate demands in the market to know how many supplies to order and at what time.
However, use of Information Technology has simplified information and data flow. Just in time (JIT), production is quite fashionable nowadays. Additionally, more companies are reducing their supply storages and ordering just in time. This reduces costs.
This is a wide topic. It involves the need to reduce costs through optimization of operations. It entails as simple things as minimization of movements to as complicated as management accounting. In the current business environment, it is paramount to reduce costs of operations.
This reduces prices associated with services and goods. The market is also complicated and its sophistication grows by day. Hence, a company needs to carry out studies to analyze suitability of organizational outputs in a company.
In the two companies under study, Omega comes out as having better operations than Acme. It meets the deadline to produce prototypes and generally makes more profits. The only reason that is attributable to the fact that they shared the final contract is because the company that had ordered wanted to maintain competition before deciding to settle on a particular manufacturer.
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It set two targets. That is, reducing final cost of production and maintaining zero defects. In the end, Acme emerged as the winner. This was evident from the start because Acme refused to take a risk of additional costs. Instead, the company risked lateness. On the other hand, Omega risked additional costs at the expense of time.
This means that although they had excellent internal operations, Omega lacked in understanding the needs of the final consumer in designing its products. Organizations have to understand the preferences and needs of the customer first before coming up with products failure to which it loses valuable clients (Ackers and Wilkinson 2005).
Both Acme Electronics and Omega Electronics had excellent workforces. However, at Acme, there was limited involvement on the side of employees compared to Omega. John Tyler was more hands on compared to Jim Rawls who would constantly call brainstorming meetings to make a decision. This had an effect on employees. Too liberal CEOs sometimes do not get the job done.
On the other hand, they motivate employees because they keep them in decision-making. For example in the case study, Acme employees would complain that they wanted more latitude expansion. Jim Rawls seems to have had a way to motivate employees intrinsically compared to John Tyler.
It is critical to keep employees motivated nowadays. This means that the company should understand the needs of each employee and work towards making them a reality. Everyone has needs. Different theorists vary these needs according to level of importance. These two explain them (Thompson and McHugh 2002).
This Vroom Expectancy Theory suggests that employees earn motivation from what they expect in terms of rewards. The theory bases its argument on operant conditioning. The employees look at the rewards. If the reward is good, the employees put in effort to earn it. This effort leads to good performance.
According to this theory, if employees feel that when they perform well they will get the above-mentioned rewards, they feel motivated to perform. The theory uses terms such as expectancy, instrumentality and valence. Valence is the attachment that an employee feels towards the reward (Morgan 2006). Therefore, management should create such an environment to ensure these rewards.
These rewards should be valuable and have the ability to generate an emotional attachment in employees. For example, fully paid one-week holidays to exceptional destinations. However, this is only true if employees enjoy satisfaction from basics such as remuneration, safety and cleanliness. The study does not mention these aspects (Budd 2004).
Maslow’s Hierarchy of Needs
Maslow prioritized human needs according to importance. This article clearly captures what Maslow tried to put forth. Although the employees may be getting high salaries (the study does not indicate this), they want more than just that. A good salary is basic (Harcourt 1987).
Self-actualization is the fact that the employees enjoy what they do. The environment should be conducive for the employees to enjoy working. They should grow, learn and feel that they contribute in decision-making (Fiske 1992).
Performance in organizations is because of fully motivated employees. At some point, a manager at Acme says that he is only interested in the pay that he gets and others should too. Additionally, another employee does not care that a component will disrupt final assembly of a photocopier.
These are clear signs that these employees are not motivated. Eventually, they do not offer a good performance. They deliver half the work more than ten days later after a competitor with a 20% defect rate. This would be a suicidal move in the current environment saturated with competitors (Chen-Bo Zhong 2011).
This refers to how different components in an organization operate. This refers to departmental and organizational chain of command. Of the two companies, Acme has a simple structure. However, Jim Rawls does not believe in an organizational structure. This is an extreme way to think even going by the standards of that time. A company has to have a structure.
Omega was dealing in contracts worth billions. This means that it was a recognized company with a huge presence and status. It is illogical that it did not have a structure. This is the only explanatory reason why Jim Raul constantly called meetings to discuss small matters. Although memos took a little bit of time to get things done, Acme showed more sanity in decision making than Omega (Bruce and Nylan 2011).
An organizational structure contributes a lot towards strategy formulation and decision-making. A complicated organizational structure lags decision-making. In extreme situations, it is hard to arrive at anything because of the many hurdles on the way (Taneja et al. 2011). This was the situation at Acme. Arguably, it would be the greatest contributor towards the late delivery with defects.
On the brighter side, it creates sanity and it is the only way in a huge organization. The only solution is to keep it simple. An organizational structure forms the basis for performance evaluation. This is because a manager can trace piece of work to a certain person. When an organization depended upon it extremely, it creates autocracy (Manfred 2003).
In the current corporate world, it is common to find that many organizations prefer a president who has line managers who report directly to him.
This creates a flat structure. This reduces instances of delay in communication and information flow. Overall, it is paramount to have a structure even in small organizations. An employee at Omega reportedly did not know where to work because of lack a clear-cut organizational set up (Cervone et al. 2006).
It is evident that these two organizations were riding on the fact that they were a leading brand during their time. In the current set up organizational structure, motivation, operations management and Supply Chain Management matter in every decision an organization makes. All of these aspects are dependent upon the size and nature of business of an organization (Hodgson 2007).
Companies need to carry out studies to determine the needs of customers. This should guide them to make all the other decisions. This includes the number of employees to hire, qualifications, when to make an order etc. It is also critical to grow with technology (Scott and Davis 2007).
This enables easy information flow. Hence, management of supply chains, predictability of patterns and development of business models to aid management is easy. All these contribute to quality in service and goods. Reliability, timeliness and responsiveness are some of the measures of quality (Robbins and Barnwell 2006).
Organizational structures should not be hindrances to decision-making and consultation. However, every company should have a working structure, which is specific to its operations, size, objectives and strategies. When Acme wanted to make a decision, John’s was final. However, at Omega anyone could make a decision as long as it suited his department. Consultation was the key thing.
It worked because the company was small. However, big organizations require a leader who can make quick decisions pertaining to the company fast. This may depend on intuition or a working model (Budd 2004). Managers in every organization are required to make decisions depending on the environment. The environment may not be favourable. This is true in cases of political unrest or an economic crisis.
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