Question

>> Thanks for freeing up your schedules to meet on such short notice. We need to respond quickly to the news of Toy Town's new pirate product line. Our strategy relied on getting our pirate line out first or at least at the same time.

>> I don't know how they were able to get their line developed and manufactured so much faster than us. We had a four-month lead on them from the beginning.

>> Yeah. It's frustration. We're going to lose out on a lot of money because we didn't get our product out there first.

>> Well, the pirate line is pretty much a done deal now. What we need to do is focus on how we can stop this from happening in the future. We couldn't have gone any faster. And top management says that we need to rethink our entire organizational structure.

>> We need to speed up our product development process, that's for sure.

>> Is it our staffing? Our compensation system? Our leadership? Why are we so much slower?

>> I don't know. But if Toy Town can develop and manufacture their toys in less than a year, we should be able to do it too.

>> So, any ideas? OK, team. What do we think?

>> I think that we should add more managerial layers.

>> Why?

>> Well, the more managerial layers we have, the better supervision we have on each of our products. And the more input that we have, the better chance we have of identifying and correcting every problem before it gets out of hand.

>> We did lose a lot of time on the pirate line when marketing sent the initial line back with that whole list of modifications.

>> Yeah. It would have been helpful to have their insights earlier. That's for sure.

>> I think it makes sense.

>> It's worth a try.

>> OK. I'll get with the management team and see what we can do to increase the management ranks. Thanks team. Thanks for meeting everyone. We need to discuss why the pet friend line in development is so far behind schedule.

>> It's already the biggest delay our company has experienced. We wanted to speed up product development time. Not make it take even longer.

>> And our turnover rates have spiked too. A third of our toy engineers have quit in the last five months because they are getting frustrated with how long it takes to make anything.

>> Maybe the extra management layers weren't what we needed after all. OK, team. What do we think?

>> Maybe we should have our employees specialize more.

>> What do you mean?

>> Well, if we increase the division of labor and have our employees concentrate more on their specific tasks and responsibilities, they should be more efficient at getting their work done.

>> We could move to a more pure functional structure. You know, perhaps putting all of our toy engineers together would help move lines to production faster.

>> That makes sense.

>> We have much more of a market-based divisional structure now. With our industry becoming so much more competitive and fast changing, maybe we need to change to better compete.

>> Well, a functional structure would help refocus our employees to do what they need to do to get these product lines developed.

>> Yeah, I could see that.

>> OK. Let's give it a try.

>> Yeah.

>> OK.

>> Thanks, team.

>> Got it.

>> Thanks for meeting everyone.

>> Yeah.

>> We need to figure out what is going on with our product development. It is taking longer than ever for us to get our products out, and our performance has really decreased in the past couple of months. Our employees don't seem to understand our customers as well as they used to.

>> Our labor costs have also gone up since we hired more specialists. I am not sure we have seen a positive return on the greater investment.

>> Yeah. And everyone seems overly focused on their own goals too. I'm hearing more arguments than I remember hearing before we started this new structure.

>> I'm sure some of it is just a natural reaction to a big change like this.

>> True, but this seems different. I mean there seems to be more conflict.

>> Yeah. And there's less flexibility too. Everyone is a lot more set in their ways. And they're just focused on defending their own goals instead of what is doing best for Happy Time.

>> We really need to figure out what's going on with this everyone. I am not sure a division of labor was the right way for us to go. OK, team. What do we think?

>> It seems like we might be better off using product development teams to increase our product development speed. You know if we set up project teams and matrix our employees back to their original functions for support, that might help a lot.

>> I've heard matrix relationships are difficult because employees have essentially two bosses. It is more of a complex structure, yes. But as long as the line of communication is open and employee goals and expectations are shared, those problems can be minimized. Matrix structures are great for complex activities such as product development and are well suited for uncertain environments like ours.

>> That's true. Using a matrix structure would put all the expertise needed to develop a product line in the same team, which would definitely be faster than the sequential process that we use now.

>> I know we lose a lot of time when a flaw is discovered later in the process. The matrix teams could help us make those decisions and corrections sooner.

>> Right. And I've worked in a matrix environment. And it's really not confusing as long as employee goals and priorities are shared and the line of communication is open. And, you know, it really helped the company's flexibility and product development speed.

>> OK. Let's give it a shot.

>> OK.

>> OK.

>> Good.

>> Well done everyone. We launched the new color wars line in record time.

>> And better yet, its sales are great.

>> And no competitor is likely to launch anything like it for at least six months.

>> It's a real blockbuster. You know, and our employees are really happy with this decision. You know, I think that they appreciate that changes are being made earlier in the process instead of finding out about an issue months after the changes have been made.

>> The matrix structure is certainly a faster way of developing our product lines. The new structure also saved Happy Time a lot of money by reducing the amount of managerial leaders that we needed. Great job, team.

1. Which organizational structures are illustrated in these videos and how do they influence strategic execution? Explain.

2. How do these videos illustrate the influence of the external environment on organizational design?

3. Based on this chapter, what other ideas do you have to help Happy Time Toys to develop and manufacture new toys more rapidly and to be faster in responding to the environment?

Answer 1

ANS 1. THE ORGANISATIONAL STRUCTURES ILLUSTRATED ABOVE ARE:

1. FUNCTIONAL STRUCTURE : IT WOULD MAKE THE PRODUCTION FASTER AS ALL EMPLOYEES WILL BE PUT TOGETHER. EMPLOYEES CAN REFOCUS TO THEIR WORK AND CAN DO BETTER.
2. DIVISIONAL STRUCTURE: DIVISIONS WILL BE CREATED AND DIVISION OF LABOR WILL BE THERE. THEREFORE EFFECTIVENESS WILL BE INCREASED.
3. MATRIX STRUCTURE: THIS STRUCTURE IS REALLY GOOD FOR COMPLEX ACTIVITIES AND UNCERTAIN ENVIRONMENT. IN THIS STRUCTURE, ALL THE EXPERTISE ARE PUT TOGETHER AND SEQUENTIAL PROCESS BECOMES FASTER. IT WORKS WELL WHEN GOALS ARE SHARED OR COMMUNICATION LINE IS OPEN .

ANS 2. FIRSTLY THE VIDEO TELLS ABOUT THE PIRATED PRODUCT LINE THAT IS AFFECTING THEIR BUSINESS BECAUSE THE PIRATED PRODUCTS' PRODUCTION RATE IS SO FAST THAT IT IS COINCIDING WITH THE FIRM'S. THEREFORE AFFECTING THE BUSINESS. THE SECOND EXTERNAL ELEMENT IS COMPETITORS BECAUSE OF WHICH CHANGES ARE TO BE MADE IN THE PRODUCTS. THIRD, THE LABOR COSTS IN THE MARKET WHICH AFFECTS THE NEW NO. OF EMPLOYEES TO BE HIRED AS MORE BUDGET IS NEEDE TO PAY THEM.

ANS 3. THEY SHOULD MAKE CHANGES TO THEIR PRODUCT AND SHOULD HAVE SOME COPYRIGHTED DESIGN WHICH CANNOT BE COPIED EASILY. HIRING MORE EMPLOYEES AND GEETING MORE UPGRADED TECHNOLOGY TO MANUFACTURE FASTER. DECREASING THE LEAD TIMES OF THE PROCESS.