Design Change at Cranfield Computer Technologies

It was clear to Steve Owens, president and CEO of Cranfield Computer Technologies that the organizational structure of Cranfield Tech. was no longer serving the needs of the company. Cranfield Computer Tech, a manufacturer of computers had developed a hierarchical structure over the years as sales grew and the workforce expanded. The organization had been structured according to specialized functions, creating "silos of excellence". Cranfield had multiple layers of management and a formal chain of command. The organization's ability to adapt quickly to change was severely constrained because most key decisions required managerial approval. The hierarchy had become deeply entrenched which was beginning to pose a problem for this type of industry. Steve was concerned that the structure was no longer appropriate in the increasingly competitive computer technology industry. The past few years has seen major changes in the industry. Cheaper and cheaper computers were being imported from Pacific Rim countries, and there was also an increase in the variety of computer laptops and tablets being offered to the market. Steve knew that Cranfield Tech. have to respond to these pressures if it wanted to remain a viable competitor in the computer industry. After studying the organization for several months, Steve realized that several functional departments had limited interactions. Frictions between departments (for example, between marketing and sales and between engineering and manufacturing) had occasionally been intense and had kept the organization from operating smoothly. Steve wondered if a new organizational structure might be in order. After reading several articles on horizontal corporations, Steve and his executive team developed a plan to restructure the organization around the key processes. Key processes such as new product development, sales, and customer support, were identified and specific performance goals defined for each. Because the information technology industry had become very competitive, Steve and his team decided that Cranfield Tech should adopt a customer service orientation. Therefore, performance goals were defined in terms of customer satisfaction. According to the plan, teams of functional specialists would work on a given key process toward established performance goals. Following the redesign, teams of employees from different functions would be responsible for every stage of their key process. The multidisciplinary teams would be empowered to make decisions without supervisor input, thereby reducing the chain of command and flattening the organization's hierarchy. To provide better service, teams would meet regularly with suppliers and customers to learn more about their needs and constraints. The plan looked good on paper, but Steve was concerned about its implementation. On his desk was the strategic plan that he and his executive team had prepared. They had nicknamed it ''the roadmap" because it outlined how Cranfield would proceed from its present vertical structure to desired horizontal structure. The restructuring process was to begin in six (6) weeks. But first, Steve and his executive team had to share the entire plan with everyone in the organization. The first meeting to unveil the new structure to upper and middle management was about to begin. With a sigh of both excitement and hesitation, Steve grabbed the roadmap and headed for the conference room.

3(a.) Using the elements of design, and relevant OB theory explain the likely impact that the change in organizational structure will have on Organizational Behavior at Cranfield Technologies. (12 marks)

3(b). As a business solutions consultant, provide advice to the organization's top management on what should be done within the organization to ensure that the change in organization structure does not impact negatively on productivity and organizational effectiveness. (8 marks)