After her meeting, Julie calls fell. This is Julie. What did you want to talk to About reassigning Tyler to my project. He's interested, and I've already me about that was so urechil" talked to Jennifer shout it." answers fell. "That's impossible. " declares Julie. "He's critical to the Goodold project." "Sorry," says fell, "but if the Growin project is successful, we'll get more busi- ness from them than we ever got from the Goodold Company." It's already after a o'clock and I have to be out of town for a week, but 171 discuss this with jennifer as soon as I get back, " snaps Julie. "Yeah, sure. whatever," responds Jeff. The next day Jeff calls a meeting with Jennifer and Tyler. He starts by telling them, "I called this meeting to figure how soon Tyler can begin working on the Growin project and how you (looking at Jennifer] can get somebody to take his place on what's her name's project." "I think Falit should be here for this discussion," says Jennifer. "She couldn't make it. Apparently she's out of town for a week, and we need to get going on the Growin pro n project." Jeff tells her. "We need to prepare for a meeting with them next week. Besides, Tyler is the one we're talking about, and he'd rather work on the Growin project. Right, Tyler?" "Ah, well now that you've asked, I am getting tired of working on the Good- old projects, " replies Tyler. "I'm not learning anything new. I mean, it's okay, but I'd like a change." Jennifer is astonished. "You never mentioned that to me, Tyler." Jeff breaks in, "Well, I guess it's settled Jennifer, you assign somebody else to the Goodold project who'll feel a little more challenged and tell Julie when she gets back. In the meantime, me and my buddy Tyler have got a lot of work to do to look good for our meeting with the Growin people next week." CASE QUESTIONS I. Why is Jeff so anxious to get started on the Growin project? 1. What is wrong with Jeff's approach to handling this situation? 3. What should Jennifer do to resolve this situation? from this story? 4. What advantages and disadvantages of the matrix organization are apparent GROUP ACTIVITY questions: Have an open discussion among course participants regarding the following What should Jennifer do next? What should Tyler do? What could have been done to prevent this situation? How could each of the four individuals have handled the situation better? CASE STUDY 2 Organize for Product Development Stevens Corporation is a multidivision manufacturing company with diversified products serving the aerospace, automotive, and medical markets. Its medical instruments division is located in the Midwest and has a plant with over 1,000employees. It sells various medical instruments, such as analyacts, monitoring equipment, and beating Instruments to hospitals and medical Laboratories. It is a market leader, and its business has been steady. It has a very good reputation and commands a premium price for its products, However, the business is not growing as fast as the real of Stevens' divisions of as fast as the board of directors thinks it should. They feel that the division's manageme gement has become compla- cent. There are several new competitors entering the market with products that have more features and lower prices. Last year, the chief executive officer told Kareem, general manager of the medical instruments division, that he had to start developing new and enhanced products in order not to lose market share to the emerging competitors. Kareem has worked his entire 20-year career in the division and is an elec- tronics engineer who worked on many of the current products, He thinks they are still quality products and that the marketing department needs to do a better job of convincing the customers that Stevens products are still the best value compared to unproven competitors' products. He also thinks that the manufacturing department can reduce costs through tougher negotiations with suppliers and by making process improvements. "He believes that Stevens' reputation will eventually knock the new competi- tors' products out of the market. Therefore, he is hesitant to allocate any more resources to any product development efforts than are necessary to pacify the CEO and board of directors. He wants to maintain the division's profit margin. which is used to determine his year-end bonus Kareem's approach was to establish four product development teams. Each team was assigned a different product that was being threatened by competitor products, with the goal of developing enhancements that would match or beat the competing products. He simply assigned each of his four department man- agers to head the four product development teams. He thought this would create some friendly rivalry. The four department managers are: Tanya-Manager, Marketing Khalid-Manager, Electronic Engineering Lee-Manager, Computer Systems Engineering Tony-Manager, Manufacturing Kareem has been getting more frequent questions from the CEO about the status of the product developments. Kareem knows that progress has been slow and that he really has not put a priority on it because he believes Stevens will simply outlast its competitors, who, he thinks, are losing money on their lower- priced products. Kareem had his annual performance review sessions with his department managers last week and asked them about the product development projects. Here is what each of them told him: Tanya, manager of marketing, said that none of the managers, including Kareem, are giving priority to the product development projects because they are too busy with their regular work. She said the product development efforts should be market-driven, not engineering-driven. The other product development teams led by Khalid and Lee are not interested in any input from the Marketing Department; they just want to develop highly sophisticated, overengineered pro- ducts that will be too complicated for customers to use. She also said that Tony is only interested in how to make any new products cheaper, not necessarilybetter, because he thinks that a lower manufacturing cost per unit is the ultimate goal Tampa suggested to Kareem that be approve a new position of product development manager, who should report directly to her and would have full responsibility for all product development projects. She told Kareem that several key people from each of the other departments should be permuneatly reassigned to the product development manager to work solely on product development projects, Tanya also expressed her belief that the other three department managers seem to side with each other against her because she is a woman and has only been with the division a short time. She accused them of being a bunch of "good old boys" who have never gone outside the plant to talk with customers in the 20 plus years they have all been there. If Kareem does not approve hiring a product development manager who would report to her, Tanya said, she would seriously have to reconsider her interest in saying at Stevens Corporation. She has an excellent reputation in the industry. many other companies would welcome her. Kareem knows that it took him a while to fill the marketing manager position, and he had had to pay a higher salary than he had wanted to get Tanya to come to Stevens. Khalid, manager of electronic engineering, told Kareem that the product development projects are not progressing because the computer systems engi neering department is always fighting among themselves about whether product features should be done with hardware or software. He said that Lee has already announced that he Intends to retire at the end of the year. Khalid told Kareem that when Lee retires, he should not be replaced; rather. the computer systems engineering department should be merged into Khalid's department. He said he would then have better control over the product development projects, which should be led by engineering anyway because all product enhancements require engineering and design expertise. He saw no need for marketing or manufacture ing to be involved. He said marketing's job should be to sell the products engi- neering develops, and it's manufacturing's job to make the products the way engineering designs them. He also said that by not replacing Lee, Kareem can make up some of the money paid for the "overpriced" marketing manager. Lee, manager of computer systems engineering. told Kareem that he had eval- uted the competitors' products and the big difference is that their products are software based whereas Stevens' products are electronics based, as they have been for years. Lee reminded Kareem that it was years ago that both of them engi- neered those electronic products. But today it is a different environment, with new technologies and approaches, and Stevens has to redesign its products to be software based. He suggested that when he retires at the end of the year. Kareem should appoint Nicole as the new manager of the computer systems engineering department. Lee believes that Nicole is young, bright, knows soft- ware design better than anyone in his department. and could do a great job in leading the product development projects. She has a master's degree in computer engineering and an MBA. She is interested in having Stevens' products meet cus- tomers' needs. Nicole frequently has discussions with Tanya about marketing and customers and competitors. Lee told Kareem that if Nicole is not promoted, she will probably leave Stevens and go to another company, maybe even one of the competitors, where her talents might be better utilized. Tony, manager of manufacturing, told Kareem that he (Kareem) needs to get more involved in the product development projects and "start knocking some heads together." He said marketing and Khalid and Lee are trying to make toomany changes to the products and that will just increase the price or reduce profil margins. Tony believes that the other managers have no concern for costs or any manufacturing process clunges that would have to be made, Tony suggested that Kareern start having regular product development status meetings to find out what is "really" going on and see all the "politics." He said all the other department managers care only about their own department looking good, and cod, and they are not willing to share information or cooperate with the other teams. As a result, all the product development teams were suffering, and it was getting worse each day. He told Kareem that what started out as a friendly rivalry among the teams has turned into outright nasty competition. He again warned Kareem to do some- thing before it begins to drag down the corporation's overall profitability, and the CEO has all their jobs or even recommends selling the division to a competitor. Finally, the CEO calls Kareem to a meeting and tells him that the latest mar. keting report shows the medical instruments division has lost market share for the second consecutive quarter and wants to know why Kareem does not have any new product enhancements out in the market yet. Kareem admitted that he has not been on top of the product development efforts and has not given them the priority that he should. He thought the competitors would fold. Kareem dis- cussed his approach to establishing the product development teams and the feed- back he just got from his department managers. The CEO was not happy and told Kareem that he was relying too much on doing things in the same old ways and that he had better look for new ideas and approaches or his position would be in jeopardy. The CEO told Kareern that the situation is critical, and the board of directors is losing their patience. When the board hired her as CEO last year, they expected her to move Stevens from a good national company to a great global one and that all the other divisions are moving in that direction while the medi- cal instruments division is staying flat in spite of an increasing global market for their products. The CEO told Kareem that she is going to bring in a management consultant to evaluate what is going on in his division and make recommendations to her about how to get the product development effort organized and on an acceler- ated track. CASE QUESTIONS You are the management consultant hired by the CEO. 1. How would you initiate your assignment with Kareem and the department managers? 2. Develop a list of questions you would ask. 3. Assuming the department managers tell you the same things they told Kareem, what recommendations would you make to the CEO, including any changes to the organizational structure, to improve the management of product development projects? 4. What guidelines would you recommend for how the departments or new functions should work together on product development projects? GROUP ACTIVITY Divide the course participants into groups of three or four members to develop responses to the case questions. Each group should choose a spokesperson to present its responses to the entire class