The president of Acme, John Tyler, credited his firm's greater effectiveness to his managers' abilities to run a "tight ship." He explained that he had retained the basic structure developed by Technological Products because it was most efficient for high$-$volume manufacture of printed eircuits and their subsequent assembly. Tyler was confident that had the demand not been so great, its competitor would not have survived. $"$In fact," he said, $"$we have been able to beat Omega regularly for the most profitable contracts, thereby increasing our profits"" Acme's basic organization structure is shown in Exhibit $1.$ People were generally satisfied with their work at Acme; however, some of the managers voiced the desire to have a little more latitude in their jobs. One manager characterized the president as a "one$-$man band." He said, "While I respect John's ability, there are times when I wish I had a little more information about what is going on$.$

Inside Omega

Omega's president, Jim Rawls, did not believe in organization charts. He felt that his organization had departments similar to Acme's, but he thought the plant was small enough that things such as organization charts just put artificial barriers between shecialists who should be working together. Written memos were not allowed, since, as Jim expressed it$,$ "the plant is small enough that if people want to communicate, they can just drop by and talk things over." Other members of Omega complained that too much time was wasted "filling in$"$ people who could not contribute to the problem solving. As the head of the mechanical engineering department expressed it$,$ "Jim spends too much of his time and mine making sure everyone understands what we're doing and listening to suggestions." A newer member of the industrial engineering department said, "When I first got here, I wasn't sure what I was supposed to do$.$ One day I worked with some mechanical engineers and the next day I helped the shipping department design some packing cartons. The first months on the job were hectic, but at least I got a real feel for what makes Omega tick." Most decisions of any significance were made by the management team at Omega.

Part Il

In $1966,$ the integrated circuits began to cut deeply into the demand for printed circuit boards. The integrated circuits $($ICs$),$ or "chips," were the first step into micro miniaturization in the electronics industry. Because the manufacturing process for ICs was a closely guarded secret, both Acme and Omega realized the potential threat to their futures and both began to seek new customers aggressively. In July $1966,$ one of the major photocopy manufacturers was looking for a subcontractor to assem$-$ ble the memory unit for its new experimental copier. The projected contract for the job was estimated to be $$5-57$ million in annual sales. Both Acme and Omega were geo$-$ graphically close to this manufacturer and both had sub$-$ mitted highly competitive bids for the production of $100$ prototypes. Acme's bid was slightly lower than Omega's; however, both firms were asked to produce $100$ units. The photocopy manufacturer told both firms that speed was critical because their president had boasted to other manufacturers that they would have a finished copier available by Christmas, This boast, much to the designer's dismay, required pressure on all subcontractors to begin prototype production before final design of the copier was complete. This meant that Acme and Omega would have at most two weeks to produce the prototypes or de$-$ lay the final copier production.

Part Ill

Inside Acme

As soon as John Tyler was given the blueprints $($Monday$,$ July $11,1966),$ he sent a memo to the purchasing depart$-$ ment requesting them to move forward on the purchase of all necessary materials. At Ihe same time, he sent the blueprints to the drafting department and asked that they prepare manufacturing prints. The industrial engineering department was told to begin methods design work for use by the production department foremen. Tyler also sent a memo to all department heads and executives indicating the critical time constraints of this job and how he expected everyone to perform as efficiently as they had in the past. On Wednesday, July $13,$ purchasing discovered that a par$-$ ticular component used in the memory unit could not be purchased or shipped for two weeks because the manufac$-$ turer had shut down for summer vacations. The head of purchasing was not overly concerned by this obstacle, be$-$ cause he knew that Omega would face the same problem. He advised Tyler of this predicament, who in turn decided that Acme would build the memory unit except for the one component and then add that component in two weeks. Industrial engineering was told to build this constraint into their assembly methods. On Friday, July $15,$ industrial engineering notified Tyler that the missing component would sub stantially increase the assembly time if it was not available from the start of assembi