Question

the questions :

Which one has simpler differentation mechanism than the other? Acme or Omega?

How many hiearchy levels can you count in Acme?

What is span of control of Acme’s president? What is span of contol of plant manager in Acme?

What do you think about span of control of Omega’s president?

The case

The Paradoxical twins: Acme and Omega Electronics In 1986, Technological Products of Erie, Pennsylvania, was bought out by a Cleveland manufacturer. The Cleveland firm had no interest in the electronics division of Technological Products and subsequently sold to different investors two plants that manufactured computer chips and printed circuit boards. Integrated circuits, or chips, were the first step into microminiaturization in the electronics industry, and both plants had developed some expertise in the technology, along with their superior capabilities in manufacturing printed circuit boards. One of the plants, located in nearby Waterford, was renamed Acme Electronics; the other plant, within the city limits of Erie, was renamed Omega Electronics, Inc. Acme retained its original management and upgraded its general manager to president. Omega hired a new president who had been a director of a large electronic research laboratory and upgraded several of the existing personnel within the plant. Acme and Omega often competed for the same contracts. As subcontractors, both firms benefited from the electronics boom and both looked forward to future growth and expansion. The world was going digital, and both companies began producing digital microprocessors along with the production of circuit boards. Acme had annual sales of $100 million and employed 550 people. Omega had annual sales of $80 million and employed 480 people. Acme regularly achieved greater net profits, much to the chagrin ofOmega’s management. Inside Acme The president of Acme, John Tyler, was confident that, had the demand not been so great, Acme’s 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 profit.” Tyler credited his firm’sgreater effectiveness to his managers’ abilities to run a “tight ship.” He explained that he hadretained the basic structure developed by Technological Products because it was most efficient for high-volume manufacturing. Acme had detailed organization charts and job descriptions. Tyler believed everyone should have clear responsibilities and narrowly defined jobs, which would lead to efficient performance and high company profits. 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. Inside Omega Omega’s president, Jim Rawls, did not believe in organization charts. He felt his organization haddepartments similar to Acme’s, but he thought Omega’s plant was small enough that things suchas organization charts just put artificial barriers between specialists who should be workingtogether. Written memos were not allowed since, as Rawls expressed it, “the plant is small enough that if people want to communicate, they can just drop by and talk things over.” The head of the mechanical engineering department said, “Jim spends too much of his time and mine making sure everyone understands what we’re doing and listening to suggestions.” Rawls wasconcerned with employee satisfaction and wanted everyone to feel part of the organization. Thetop management team reflected Rawls’s attitudes. They also believed that employees should befamiliar with activities throughout the organization so that cooperation between departmentswould be increased. 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. Thefirst months on the job were hectic, but at least I got a real feel for what makes Omega tick.”

Answer 1

Let us first simplify the case study.

Acme Electronics: (1) Upgraded General Manager to President (2) Retained its original management (3)Annual sales of $100 million and 550 employees (4) Greater net profit (5) Organization chart and job description (6) follows the rule that everyone should have clear responsibility and narrowly defined jobs (6) Efficient performance of employees

Omega Electronics Inc.: (1)Hired a new President (2) Upgraded existing personnels within the plant (3)Annual sales of $80 mllion and 480 employees (3) Do not follow organization chart as the management felt it as a barrier between employees (4) The working culture is to make each employee a satisfied one with knowledge of each department.

1) As far as profitability is concerned and growth of the company is concerned Acme has a simpler differentiation mechanism since growth or expansion depends on demand of the product which leads to profitability which again leads to expansion and growth of the existing employees. Here every employee has a defined role to play which leads to efficient work and productivity.

2) Acme followed "Line Organizational Structure" where there was a GM however the GM was upgraded to President. The president here is incharge of managers and managers in turn is the incharge of plant workers thus we see (a)Top Management (b) President (c) Managers at plant (d) Labours or employees at plant.

3) Span of control of President and Plant managers of Acme: We get to see that an organisation chart is being followed and roles and duties are clearly defined thus though president is in charge of the entire plant however managers under him had the direct control over people working under him at the plant.

4) Omega's president did not follow the organization chart which meant that he could directly speak to the plant employees and vice versa. His role mostly included satisfying the workers and employees rather than focus on more ways to increase profit for the organization. Thus the president was open for interaction with any employee of the plant just to make sure that each employee had a sense of belongingness.