Question

PLEASE USE LOTS OF DETAILS AND EXAMPLES!

Cameron Mechanical & Automation, Inc. (CMA) is a fictional company that has been in business and operating in the Silicon Valley since 1998. The company began as a successful Internet-based company (dot-com) and experienced great success with the introduction of high technology. The company also experienced decline with other dot-coms in 2001. As a result, CMA restructured and focused on its primary products; that is, computer components. The early changes in the company were done quickly to downsize. Although many other companies failed during this time, CMA managed to move forward.

CMA rebounded and continued to manufacture and sell its components to computer manufacturers worldwide. The company structure was divided into product divisions, with each division focused on specific components. For the company, this structure was meant to streamline sales and delivery worldwide.

In 2008, the economy had an effect on company profits, but the chief executive officer (CEO), Jared Smith, was in a position to focus on several internal strategic areas, including structure, work design, motivation, conflict, and company culture as a whole. To stay profitable, the company had to eliminate several management positions in an effort to flatten the organizational chart. Many of the responsibilities fell to the employees, and many people resisted the change.

As the economy recovers, CMA continues to rebuild. Since 2012, the company has been divided into a functional structure that includes four departments: Research and development (R&D), marketing, production, and finance. Each department is headed by a vice president who has responsibility over each of the functional areas. The company currently sells components to computer manufacturers. As technology continues to advance, the CMA R&D department and its vice president, Kevin Adams, are feeling pressure to keep up with the competition. However, because of the differentiation and separation between the departments, the CEO is concerned that communication is hampered.

Because of the current structure and culture, the vice presidents who run each division of the company have autonomy and are able to use different leadership styles. For example, the vice president of marketing, Jim Stevens, uses a more democratic leadership style, while the vice president of production, Melissa Simons, is adamant that her autocratic or transactional style is the only way to get results. Each leadership style has advantages, but the lack of consistency between divisions may be causing problems for the company as a whole. Further, the CEO is concerned that the workforce may not be as diverse as it should be, but he is not sure how to address the issue.

It is the end of the day, and you are meeting in Jared's office to talk about his conference with the vice presidents.

Jared, the CEO, says: "We talked about how we can change the infrastructure so that it helps organizational culture run efficiently and consistently. Everyone is getting the same message now about how structure and culture need to work in a healthy company."

"You know, it would help if I had something that explained the link between culture and structure. I need to talk to the board about the changes we're making, and I will be talking to staff about what they can expect to happen over the next 6 months. You're a better writer than I am, and I could use a well-written explanation for my discussions."

Jared also says, "Besides explaining the link between culture and structure in this assignment, and based on the problems that CMA has had, what additional changes would you suggest for the company? I want to include your recommendations in the agenda for the next quarterly meeting with the board."

Answer 1

Every organization, whether consciously or unconsciously, establishes its own system of values that makes up the organizational culture or moral of the organization. Like the larger community, organization seeks to have its own morality, customs and taboos, which ultimately forms the organization’s peculiar individual ways of doing business. Accordingly, a certain type of organizational structure forms its type of organizational culture. Study of the interrelated processes of adaptive changes in the organizational structure and culture in times of crisis is an important, creative and promising area of management science development and is discussed below in this report.

In its essence, organizational structure is regarded as a logical relationship of management levels and functional areas built in a way that ensures the most efficient achievement of the organization’s goals. In turn, the organizational culture is seen as the atmosphere and social climate in the organization directly affecting the achievement of the organization’s objectives and influencing the design of organizational structures, since the organization should be considered as a dynamically developing object. Therefore, in a broad sense, the task of managers is to choose the structure that best meets the goals and objectives of the organization, as well as internal and external factors that affect it. Today, one of the most commonly used in practice is the model of Competing Values Framework (OCAI) proposed by Cameron and Quinn (2011), where they described the four main types of culture: hierarchy, market, clan, and adhocracy. In turn, Biswas (2009) distinguishes four basic types of organizational structures, namely linear, divisional, project, and matrix.

At first glance, it is logical to assume that there is strong correlation between the type of organizational structure and the type of organizational culture. This assumption is based primarily on the essential assumption that the primary organizational structure generates the appropriate type of organizational culture. Thus, basing on Walsh (2004) and Cameron and Quinn (2011), management may pay more attention to flexibility, adaptability, agility or, conversely, control, stability and predictability; on the other hand, management may attach greater importance to the external representation of the organization (customer relations, image, etc.) or internal processes in the organization, integration. Thus, it turns out that the clan culture focuses on flexibility, integration and individuality, the adhocracy on high external positioning and flexibility, the hierarchical culture on stability and control, while the market culture on differentiation and external positioning.

In the case of Cameron Mechanical & Automation, Inc., the divisional organizational structure, where the organization is divided into separate departments with quite broad autonomy, matches with a market type of culture. An important feature of market culture is that it focuses more on the external environment, rather than on its internal affairs (Cameron & Quinn, 2011). In contrast to the hierarchy where the internal control is maintained by rules, specialized tasks and centralized solutions, the market operates on different principles, and the focus is on operations with external customers and achievement of competitive advantage. Thus, the main goal of CMA is a victory in the competition, market dominance, and the core values are competitiveness, productivity, entrepreneurship, aggressiveness, and individualism. Such organizations treat the staff as a means to an end. In addition, as is characteristic of a market culture, the company encouraged rivalry and competition within the organization: both between departments, and between individuals, which significantly reduces overall productivity in the long term.

RECOMMENDATIONS FOR CHANGES

Indeed, market organizational culture is typical to many market leaders, who pay special attention to innovation management, as in the present conditions leadership in the market (especially in the global market) depends on access to new technologies, resources, and innovative ideas. However, as Biswas (2009) rightfully marks, in such an organization, it is important to focus more on the individual contribution of an employee to the achievement of organizational goals. In particular, in order to increase the loyalty of the employees in companies of this type, it is necessary to adopt a balanced, long-term material incentive program (Biswas, 2009; Walsh, 2004). It may also include the sale of company’s shares and special pension funds. Maintaining commitment is also achieved through the postulation of goals and values of the company, due to employees sharing these values and feeling the belonging to the company.

A good example of the relationship of the organizational structure and culture is Better Works, the company established in early 2011, which is developing media products (creation and promotion of sites, contextual advertising), located in Los Angeles. Part of the organizational structure of the company is a special incentive system in which special algorithms analyze the behavior of employees to recommend the management what they really want (for example, going to the bowling alley for the sales department). Special software analyzes the results of the work, based on which the staff is offered the broadest system of bonuses (free from dry cleaning to remuneration). Six months later, after this system was introduced, the company began to produce such effective products that at the end of 2011, a larger company Redpoint invested 8 million dollars in Better Works (Maney & Hamm, 2011). This result indicates the strong enhancement of organizational culture: improving communication between employees, between departments, clear formulation of basic values of the company to everyone.