Required (a) Explain why you believe an investment center is or is not an appropriate organization design for this company. (b) Assuming that this organization is committed to the current design, how would you improve it? (c) Assuming that this organization has decided that the investment center approach is unacceptable, what approach to performance evaluation would you recommend? 12-75 Computing objectives and organization responsibility Baden is a city with a population of 450,000 . It has a distinct organization group, called the Public Utilities Commission of the city of Baden, or Baden PUC, whose responsibility is to provide the water and electrical services to the businesses and homes in the city. Baden PUC's manager is evaluated and rewarded on the basis of the profit that Baden PUC reports. Baden PUC buys electricity from a privately owned hydroelectric facility several hundred miles away for resale to its citizens. Baden PUC is responsible for acquiring, selling, billing, and servicing customers. The maintenance and moving of electric wires within the city are, however, the responsibility of the city of Baden maintenance department, or Baden Maintenance. Baden PUC pays Baden Maintenance for work done on its electrical wires. Over the years, many squabbles have occurred between Baden Maintenance and Baden PUC. These squabbles have usually involved two items: complaints by customers about delays in restoring disrupted service and complaints by Baden PUC that the rates charged by Baden Maintenance are too high. However, the most recent quarrel concerns a much more serious issue. On July 12, at about 10:30 A.M., a Baden City employee working in the parks and recreation department noticed an electrical wire that seemed to be damaged. The employee reported the problem to Baden Maintenance at about 12:15 P.M., during his lunch break. At 1:15 P.M., the report was placed on the maintenance supervisor's desk, where it was found at 2:05 P.M., when the supervisor returned from lunch. The maintenance supervisor then called the Baden PUC dispatch office to report the problem and request permission to investigate the report and make any required repairs. The request for repair was placed on the Baden PUC service manager's desk for approval at 2:25 P.M. The service manager received the message at 4:00 P.M., when he returned from a meeting. He approved the work and left a memo for a subordinate to call in the request. The request was then mistakenly called in by a clerk at 4:50 P.M. as a request for routine service and logged by the dispatcher in Baden Maintenance. A truck was dispatched at 3:50 P.M. the following day. When the repair crew arrived at the scene, it discovered that the wire was indeed damaged and that if any of the children playing in the park had touched it, it would have caused instant death. The incident went unreported for several days until a reporter for the Baden Chronicle received an anonymous tip about the episode, verified that it had happened, and reported the incident on the front page of the newspaper as an example of bureaucratic bungling. The public was outraged and demanded an explanation from the mayor, who asked the city manager to respond. The initial response from Baden's city manager-that "everyone had followed procedure"-only fanned the furor. Required (a) Was what happened inevitable, given the city of Baden's organization structure? Explain. (b) Given the existing organization structure, how might this incident have been avoided? (c) How would you deal with this situation now that it has happened? (d) Would a change in the organization structure help prevent a similar situation from occurring in the future? Explain. Required (a) Explain why you believe an investment center is or is not an appropriate organization design for this company. (b) Assuming that this organization is committed to the current design, how would you improve it? (c) Assuming that this organization has decided that the investment center approach is unacceptable, what approach to performance evaluation would you recommend? 12-75 Computing objectives and organization responsibility Baden is a city with a population of 450,000 . It has a distinct organization group, called the Public Utilities Commission of the city of Baden, or Baden PUC, whose responsibility is to provide the water and electrical services to the businesses and homes in the city. Baden PUC's manager is evaluated and rewarded on the basis of the profit that Baden PUC reports. Baden PUC buys electricity from a privately owned hydroelectric facility several hundred miles away for resale to its citizens. Baden PUC is responsible for acquiring, selling, billing, and servicing customers. The maintenance and moving of electric wires within the city are, however, the responsibility of the city of Baden maintenance department, or Baden Maintenance. Baden PUC pays Baden Maintenance for work done on its electrical wires. Over the years, many squabbles have occurred between Baden Maintenance and Baden PUC. These squabbles have usually involved two items: complaints by customers about delays in restoring disrupted service and complaints by Baden PUC that the rates charged by Baden Maintenance are too high. However, the most recent quarrel concerns a much more serious issue. On July 12, at about 10:30 A.M., a Baden City employee working in the parks and recreation department noticed an electrical wire that seemed to be damaged. The employee reported the problem to Baden Maintenance at about 12:15 P.M., during his lunch break. At 1:15 P.M., the report was placed on the maintenance supervisor's desk, where it was found at 2:05 P.M., when the supervisor returned from lunch. The maintenance supervisor then called the Baden PUC dispatch office to report the problem and request permission to investigate the report and make any required repairs. The request for repair was placed on the Baden PUC service manager's desk for approval at 2:25 P.M. The service manager received the message at 4:00 P.M., when he returned from a meeting. He approved the work and left a memo for a subordinate to call in the request. The request was then mistakenly called in by a clerk at 4:50 P.M. as a request for routine service and logged by the dispatcher in Baden Maintenance. A truck was dispatched at 3:50 P.M. the following day. When the repair crew arrived at the scene, it discovered that the wire was indeed damaged and that if any of the children playing in the park had touched it, it would have caused instant death. The incident went unreported for several days until a reporter for the Baden Chronicle received an anonymous tip about the episode, verified that it had happened, and reported the incident on the front page of the newspaper as an example of bureaucratic bungling. The public was outraged and demanded an explanation from the mayor, who asked the city manager to respond. The initial response from Baden's city manager-that "everyone had followed procedure"-only fanned the furor. Required (a) Was what happened inevitable, given the city of Baden's organization structure? Explain. (b) Given the existing organization structure, how might this incident have been avoided? (c) How would you deal with this situation now that it has happened? (d) Would a change in the organization structure help prevent a similar situation from occurring in the future? Explain