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Acme And Omega

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Category: Miscellaneous

Autor: anton 11 January 2011

Words: 3573 | Pages: 15

Acme’s organizational design takes the form of a mechanistic structure. The internal organization is characterized by rules, procedures, and a clear hierarchy of authority.” The decision-making is very centralized, communication is vertical and tasks are rigidly defined. This is shown in Tyler’s management style. He makes his managers run the organization with strict control, or as he phase it, a “tight ship.” The president (Tyler) does what he wants because all the decision-making power is in his hand (centralized). Acme has a very detailed organization charts and job descriptions. This is because Tyler believes that everyone should have clear responsibilities and narrowly defined jobs. Finally, there is vertical communication in the company. Departments don’t interact or talk with each other. All the information flows from top management down to lower management and employees. If Tyler wants to communicate to the company about changes or demands, he writes memos that he passes down to his upper management, which passes it down to lower management and maybe eventually down to the employees.

On the other hand, Omega takes a different approach when it comes to organizational design. The company is organic and the internal organization is characterized by “looser, free-flowing, and adaptive.” Rules and regulations are not written down and hierarchy of authority is not clear. The decision-making authority is decentralized. This can be seen at Omega through the departments contributing to the common tasks (when they were making the chips). Since Rawls does not believe in organization charts, tasks can be adjusted and redefined through the employee teamwork. For example: when a new member of join the industrial engineering department, he found that his role was not clearly defined. One day he is working on a project with a team of mechanical engineers and the next day he could be helping the shipping department design packaging cartons. Finally, there is a lot of horizontal communication. Rawls did not permit memos as a form of communication. He believes that if you have something to say to a person, you should just walk right over to the person and say it.

At the end of Part III, the performance difference between Acme and Omega can be attributed to how each organization was internally structure. Acme, for example is structured based on functional groups. Each department specializes in a certain function (drafting, industrial engineering, mechanical engineering, purchasing, production, etc.), but the functions was not integrated with each other, which decreases the coordination among departments. Departments that should be working with each other didn’t. The departments were just worried about getting their task done that they putting the prototype together with the missing parts. For example, purchasing didn’t get all the parts from Industrial engineering and decided to assemble the product without the part. This lack of integration among departments produce a lot of errors during the product assemble, which created many delays because departments like production and method couldn’t agree on how to install the component.

At Omega, they are a functional structure with horizontal linkages. Even though they do have functional departments like Acme, Omega differs in that they do have cross-functional teams creating horizontal linkages. This allows for greater integration and cooperation among departments. The structure is not formal that it permits them to have informal meetings and assign task roles depending on the project they are working in. They held meetings assign tasks. Departments proposed ideas to help one another and they had daily meetings to discuss their progress. This setup helped Omega solved all their major problems by July 16, while Acme is still scrambling to solve theirs. Also the teamwork and the knowledge sharing allow people at Omega to discover the design error in the blueprint that was sent out by the photocopier company.

Another factor to explain the difference is the method of communication between the two companies. Acme’s main form of communication is memo form (due to being very formalize), which can create a lot of lag time. There were no formal meetings. Employees were sent memos telling them what to do and expect them to do it. It doesn’t communicate the importance of the project. That’s why Mechanical engineering didn’t take the deadline seriously, which caused the company to fall behind schedule. If there was meeting, then everyone would be on the same page. Also, there are no horizontal communication links between the departments so each department just does their own thing and does not care what the other departments are doing. This is where Acme runs into communication problems during part III. This lack of communication also plays a role in decreasing the coordination among the departments. Finally, the lack of communication and coordination causes them to overlook the error in blueprint design and causes the process to be delayed several times.

At Omega, memos were not even permitted. Even before the project started, Rawls held a meeting to inform everyone about the project and how important it was for the company to try to get the 100 chips made and shipped on time. Here, Rawls made sure everyone knew what was going on and at the same time, created commitment for the project because now everyone at the meeting will leave with a common vision and goal for the upcoming project. Omega’s management team also had a lot of informal meetings to keep each other updated on the progress. This means people didn’t fall behind or felt left out. Omega also has horizontal communication. As stated above, the horizontal communication contributed to integration of departments and coordination among departments.

Finally, source of decision-making and leadership style are another two factors that can be use to explain the differences between Acme and Omega in Part III. At Acme, the decision-making is centralized. Tyler doesn’t ask for his managers’ opinions. He takes an authoritative role and orders his managers rather than ask. Since all decision-making rest in Tyler, this makes his manager feel resentful and makes their job inflexible, which makes it difficult for them to adapt to changes. This was why it was so difficult for departments to adapt to the changes in the design blueprint when an error was found. If they had more flexibility to make decisions, they could make quicker decisions on how to fix the error, rather the debate over it (production and method engineer couldn’t agree on how to fix it). Instead they have to wait for Tyler to make the decisions for them.

This is not the case for Omega. Omega has a decentralized decision-making. Rawls is a very laid back guy, who always ask his manager’s opinions and take their suggestions into consideration. The decision-making was a team effort. This allow the head of electrical engineering to make a material purchase from a Japanese source when they found out that purchasing couldn’t acquire all the parts on time. It also gives them the ability to make changes in the blueprint when they found out about an error rather than try to wait /ask for Rawls’s approval on the change. This flexibility allowed Omega to take corrective actions quickly and get the prototype out on time.

At the end of Part IV, I think Acme was awarded the full contract because the way they were structure allow them to be efficient in production because the basic structure that Acme retained is most efficient for high-volume manufacturing. Also, since decision-making is centralized, it produces quicker results because decisions are made faster. Acme was able to satisfy the photocopier’s two goals due to its “tight ship” control. I think once Acme had the correct blueprint after part III was over, they were able to take the design and setup an assembly line because Acme is setup in functional department with specialized task. Specialization increases efficiency, which produces higher volume and this in turn decreases cost.

However, at Omega, the trade-off for flexibility is increase in cost, which the photocopier company does not want. All the teamwork is good because it generates a lot of ideas but when it come down to production, cost can increase because there might be duplication of jobs and efficiency is not at its highest. Here, costs are higher but the quality may be better. Since it’s a team environment, there is more time and effort put into the product (greater attachment to product). This could mean that Omega is turning out better quality product rather than cranking out as many chips as they can in an assembly line like Acme. But since quality is not a criteria for the photocopier company, Omega loss out on the deal due to their inability to have a more formal structure.

The industry that Acme and Omega is in is unstable and complex (technology industry), which creates high uncertainty in the environment. The environment is constantly shifting and change in the electronic industry can happen quickly. This means that the companies have to learn to be adaptive to the environment as it shifts. For the future survival of Acme, I suggest that they put some horizontal links in the organizational structure. They need to open up the communication line between the departments. They can still have their specialized department since it allows them to produce at high volume and at lower cost. Another thing is that certain departments need to be more integrated with each other when it comes to certain task. For example: production and purchasing or drafting and mechanical engineer. There just need to be more coordination among the departments. This can be solved with either departmental meeting to assess the progress of a project or to have liaisons. Liaisons can be horizontal communication links, which allow departments to stay well inform about what is going on in the company so they can be better equip to adapt to changes if the need arise.

Another advice would be for Acme’s president to give some decision-making to his managers. Some managers have voiced the desire to have more flexibility in their job. Sometimes decisions take too long because they have to go through many layers in the hierarchy. Flexibility gives you the ability to react quicker and to cater your decisions according the changes. If you have to push the decision to the top in the shift environment, then by the time it reaches top management, the company may have already fallen behind.

For Omega, I think their organic structure works well for them because of the industry that they are in. But they are constantly losing contract bids to Acme because they can’t seem to keep cost down and they don’t have strong leadership presence. Jim Rawls need to direct his team more because there are complaints that he wastes his time and his managers’ time making sure everyone understands what they are doing and listening to suggestions. Rawls need to shift his focus to strategy to guide his firm to be competitive with Acme rather than trying to “make nice” with everyone.

Omega needs to also create an organizational chart so people know what their roles are. This will create less confusion and duplications and a source for cutting costs. It can still maintain it organic structure through redefining tasks depending on the project, but the roles, job descriptions and responsibilities need to be lay out so people can be held accountable for their actions. If costs are high because of this department A, then Rawls needs to know this information.

Part I

1. What are the goals at Acme? At Omega?

Referring to the case, in order to be able to beat Omega regularly for the most profitable contracts, the goals at Acme show a great deal of concerns for increasing profitability that reflects the overall performance of Acme. Acme also emphasizes on increasing productivity and high-volume output of printed circuits and their subsequent assembly as John Tyler, trying to retain the basic structure developed by Technological Products. Furthermore, Acme is looking at internal efficiency as the president of Acme, John Tyler, detailing organization charts and job descriptions. He managed his company to be well structured and organised that everyone should have clear responsibilities and job functions that will lead to this internal efficiency and high company profits. As for Omega, according to the president, Jim Rawls, the goals that they are pursuing reflect much greater concern for employee satisfaction and employees’ feeling of belongingness to be part of the organization. Omega is also going after the goals that employees should be familiar with activities throughout the organization in order to increase the overall performance of coordination and internal processes across the company.

2. What impact to top managers has on these goals?

These goals can be seen to reflect the choices and preferences of top managers. Acme’s president has a firm grip whereas Omegas president does not, he seems to be more laid back. Referring to the case, the president John Tyler at Acme, assigned employees to specific tasks, clarify their work roles as he detailed organization charts and job descriptions and he believed everyone should have clear responsibilities and narrowly defined jobs. This manager style pertains to task-oriented leader as John Tyler does what he wants and does not take other workers/ mangers' opinions or suggestions into consideration. This could bring positive impacts onto their goals because task-oriented leadership ensures that employees follow company rules as rules and standard procedures enabled organizational activities to be performed in a predictable, routine manner. These also push employees to reach their performance capacity toward the organizational goals. Furthermore, task-oriented leadership could be efficient and essential in some circumstances because of its ability to ensure more efficient functioning of organizations toward its goals. However, task-oriented leadership also have negative impacts on the organizational goals because it creates frustrations and resentment as a threat to basic personal liberties. Whereas Omega’s president Jim Rawls did not believe in organization charts, he thought his plant is small enough that people could communicate and he seeks the opinions and suggestions of workers. Although he sometimes spends too much of his time informing workers of information. This is a people-oriented leadership style that contributes to organizational goals as it improves departmental cohesiveness, cooperation and decision-making. It also lightens up the internal atmosphere and employee satisfaction that eventually will increase performance efficiency and quality toward their organizational goals.

3. Are these goals to be achieved with different strategies? Describe.

The goals reflect different effectiveness domains. As for effectiveness values, Acme values an external focus with control for efficiency while Omega is concerned with internal effectiveness for human resource development. These organizations are pursuing different goals with different strategies even though they do similar work and produce similar products.

The strategy Acme is pursuing is could be low-cost leadership. With a low low-cost leadership strategy, the organization aggressively seeks efficient facilities, pursues cost reductions, and uses tight controls to produce products more efficiently.

The strategy Omega is following could be defender strategy because it primarily with internal efficiency and control to produce reliable, high-quality products for steady customers.

Part II

4. Which firm do you think will produce the best results? Why?

In my opinion, Omega would produce the best results. Referring to the case, as the photocopier manufacturer told both Acme and Omega that speed was critical due to its president’s boast to other manufacturer so that Acme and Omega would have only at most two weeks to produce the prototypes or delay the final copier production. Under such circumstances as both firms facing competition, changes and under pressure, only organizations that have more horizontal structure as Omega does could encourages cross functional communication and collaboration in order to help Omega adapt to changes in this environment. Moreover, with the organic type of management structure which makes Omega’s atmosphere was much looser, free-flowing, and adaptive. Decision-making was decentralized. In this way, Jim Rawls creates an environment in which employees are constantly learning, solving problems together, and creating new and better ways of solving problems. This is also because in well-coordinated departments, employees are highly cooperative, have a high level of trust in each other, are committed to organizational objectives and identify with every department. There is a climate of mutual support in which departments’ employees feel comfortable about each other and help with each other in problem solving. Therefore, I believed Omega could produce the best results where Omega’s decisions are made by management team whereas Acme’s decisions are made by the president without taking in suggestions and allowing for more latitude in employees’ jobs.

Part III

5. Which organisation was more effective at developing the prototype and meeting the deadlines? Was its level of effectiveness due to the goals chosen by top management?

I believed that Omega was more effective at developing the prototype and meeting the deadlines. This is because, referring to the case, on Friday, July 8, Jim Rawls called a meeting to inform every department the importance of this contract prior to the day Omega actually received the prints comparing with the president of Acme who has not done anything before the day that the prints arrived. This shows a great deal of commitment by the president of Omega in perceiving the seriousness of the matter. Most importantly, Omega’s department help each other out as the department heads and key employees having daily meetings to discuss progress and they are not just rely heavily on the environmental resources as head of electrical engineering knew of a Japanese source for the components that could not be purchased elsewhere. On Monday, July 18, as Omega’s people from all over the departments get together to ensure that there would be no problems I production. They discovered and error in the connector cable design and get the rework in progress whereas Acme was still way behind in its development work. On Friday, July 22, the final units were inspected by quality control and delivered comparing with Acme, their final products are delivered on August 2 even without proper inspection. All those facts above reveal Acme’s difficulty in meeting deadlines while developing the prototype. The rigid, mechanistic structure which is suitable for internal efficiency led to conflict. The well-oiled relationships inside Omega enabled them to work out problems, and develop a quality prototype with great speed. Thus Omega can be more effective at developing the prototype and meeting the deadlines. The ability to develop the prototype can be attributed to the goals that contribute to organizational as it improves departmental cohesiveness, cooperation and decision-making, which is chosen by top management. The healthy internal climate at Omega reflects top management preference, as did the rigid structure at Acme.

6. Predict which organisation will get the final contract. Why?

In my opinion, I believed that Omega will get the final contract regardless of the two similar problems to those at Acme because they had certain commitment toward the contract comparing to Acme’s mechanical engineering did not take the deadline seriously, they discovered the problems in the design and quickly responded to this change, finished the prototype by the deadline comparing to Acme’s delay until August 2, and Omega had a higher quality due to their effective inspection by the quality control comparing to Acme’s product delivery without inspection. Furthermore, Omega has an acceptance rate on the initial order of one hundred prototypes.

Part IV

7. How can Acme’s success be explained? Did Acme’s goals seem more appropriate? Did stakeholder satisfaction play a role?

Acme’s success can be explained by three main reasons. Referring to the case, First, the president, John Tyler, made it a point to stay in touch with the photocopier manufacturer to let it know things were progressing and to learn of any new developments. As he stays in close touch with the buyer firm, John Tyler took a broad view in which he sees the contracting company as a stakeholder and uses the stakeholder satisfaction approach to gain a further trust. Therefore, stakeholder satisfaction does play a role here. Second, John Tyler is trying to maintain a good buyer/supplier relationship in this environment as he usually worked to keep important clients happy and found ways to get to know the head designer well. Thus, regardless of Acme’s delivery delay and incurred further delays in repairing the defective units, Acme was given an opportunity to get the split contract that supposed to be given to Omega. Third, Acme’s overall goal was oriented toward internal efficiency, so as the contract was dragged into long run, Acme have an advantage by extensively cutting its costs. Acme’s goals do not seem to be more appropriate but it allows Acme to reduce final costs below Omega’s to meet the directive.

8. Overall, who was more effective? Acme or Omega? Explain

When an unexpected demand for photocopier memory units was given to both companies, it created an unstable environment for both firms. Both Acme and Omega needed to delay until they acquired the needed resources, then Acme achieving its goal by increasing productivity and efficiency to lower their price, while Omega took the opposite strategy of stressing reliability and emphasizing quality. They are both changing to meet manufacturer’s need and they all stick to their goals. Therefore, I personally think that they are about equally effective even though Acme has got the final contract. This is because Acme and Omega all have their own goals and are trying to do extremely well in different areas. They were trying to do different things well and were successful in carrying out their own goals. Omega was succeeding in developing a healthy internal climate and employee satisfaction while Acme was succeeding at being efficient and making profits.

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