The Horizontal Corporation

It was clear to Mike Reilly, president and CEO of Pemberton

Lighting that the organizational structure of Pemberton was no

longer serving the needs of the company. Pemberton, a

manufacturer of lamps and lighting fixtures, 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

Pemberton 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.

Mike was concerned that the structure was no longer appropriate

in the increasingly competitive lighting market. The past few years

has seen major changes in the lighting indusfry. Inexpensive lamps

and lighting fixtures were being imported from Pacific Rim

countries, and energy-efficient halogen lighting was becoming an

increasingly popular alternative. Mike knew that Pemberton would

have to respond to these pressures if it wanted to remain a viable

competitor in the lighting industry. After studying the organization for several months, Mike realized

that several functional departments had limited interactions. Frictions between departments (for example, between marketing

and sales and believe engineering and manufacturing) had occasionally been intense and had kept the organization from

operating smoothly. Mike wondered if a new organizational structure might be in order. After reading several articles on horizontal corporations, Mike and his executive team developed a plan to restructure the organization around the key processes. ASDGRJU Key processes such as new

product development, sales, and customer support, were identified and specific performance goals defined for each. Because the

lighting market had become very competitive, Mike and his team decided that Pemberton should adopt a customer 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 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 Mike was concerned about it's

implementation. On his desk was the plan book that he

and his executive team had prepared. present vertical structure to desired horizontal structure. The

restructuring process was to begin in six (6) weeks. But first, Mike

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, Mike grabbed the roadmap and

headed for the conference room.

a) Using the elements of design, and relevant 0B theory

explain the likely impact that the change in

organizational structure will have on Organizational

Behaviour at Pemberton Lighting.

b) What transformational leadership style should be

applied in order to achieve the desired result to expand

and change the organizational structure.

c) 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.

d) What kind of leadership is good to apply for

organizational change that will lessen the

resistance.(briefly)

e) Your opinion in structural change of such an

organization. Also explain what kind of stress the

employees could face in such a situations and what steps

could be taken to prevent the conflict.