organization design 15dec08 (1)

7/31/2019 Organization Design 15dec08 (1)

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BusinessAdministrationVU UniversityAmsterdamFacultyof Economics ndBusiness dministrationExam

OrganizationDesignBusiness dministrationInternationalusiness dministrationVersion A

Dr. B.V. TjemkesMonday 15 December200812.00 14.00hrs

o The final grade 100%) or the OD-course s determined s ollows:- 40Yo:5written assignments nd I oral presentationtutorials)- 60o: he written exam. This written examconsistsof :- SectionA: 20 points;questions and2- SectionB: 40 points;questions and4- SectionC: 40 points;question5r Read he completeexamcarefullybeforeansweringhe questions, s conditionaton your knowledgequestionsmay takemore or less ime to answer.o The durationof the written exam s 2 hours;no dictionariesallowed.r Gradeswill beannounced n Friday 9s of January.o The exammay be reviewed n Tuesday3t hof January n room 3a35between1230-1330.o The student s allowed o take he examhome.r This written exam s governedby the RulesandRegulations f the ExaminationBoard ncluding heCodeof Conduct or Examinations.

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SectionA (20 points)Question1: ContingencyTheoryDuring he course ectures contingency erspective asbeenadopted. distinctionwas madebetween: l) Traditionalcontingencyheory, 2) Configurational ontingencyheory,and(3)Neo-contingencyheory.Please nswerhe ollowingquestions.

la. Explain n your own words he core-logic nderpinninghese hreecontingencyapproaches. ubstantiateour answerwith two arguments ndprovidea real-life examplelb. Discussonekey differencebetween raditionalcontingency heoryand configurationalcontingency heory. Substantiate our answerwith one argumentandprovidea real-lifeexample.lc. Discuss ne key difference etween onfigurat ional ontingencyheoryand neo-contingencyheory.Substantiateouranswerwith oneargument ndprovidea real-lifeexample.

Note: correctusage f keycontingency onceptse.g.,equifinality) s awarded.^XW-o ' Question2: The BureaucracyDuring he first text discussion ession nd he ectures,he bureaucracy viewedas organizationdesign has been he opic of interest.Please nswerhe followingquestions. c)Lrurrr' {ot "^'.itwJt".2a. Provide a definition of a bureaucracy nd discuss hreecharacteristics f this {ta.*rt


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SectionC (40 points)Readquestion and subsequentlyead he casepresentedn Box l. While reading he case, ocusonly on key-issues ndextract elevant nformation.Question5Conductan analysis f Acer's organization esign.This specificanalysis imsat providinginsightson the effectof changes cer made n herorganization esign o regainher competitiveadvantage. he case ext offersdescriptions fdesignschanges, ut t doesnot offer a theoreticalexplanation. hequestion s, while using heorycanyouofler an explanation bout:A. Acer's neffectivenesst the endof the start-up eriod in l99l;lcc-hrrotofr r enur?sftf^jB. Acer's effectiveness fter the 1992 eorganization.[66q-l RA;panbioe,r.oS]You may consider he following issueso develop our answer: nvironment, trategicntent,organization esign, ontextual onditions, rganization ffectiveness,nd organizationalhange.Furthermore o presentyour answeryou may use he following structure:. Research uestion makesure hequestions delineated!!)o Casedescription summary/bulletsf key issues, .g. 99l organization esign)o Discuss elevant heory definitionandexplanation). Apply theory o the case discussion f organizational esign). Formulate onclusionswhat nsights regained)Be brief and stay ocused n your answers. goodanswer s aboutquality,not necessarilyquantity.Box1: AcerCHnNcrNc Srnarrcv AND STRUCTURE:Tnn Acnn Gnoup CovrpnrrNc rN THEINroRmIrIoN TECHNoLoGY lNousrnyAbstractThis case ocuses n theAcer Group,whichwasestablished s a localTaiwanese ompany n 1976producingandsellingPCs o becoming multinational orporationmanufacturing ndmarketinga widerangeof IT and ntemetenabling echnologies,roducts ndservicesn manydifferentcountries.Competing n the fast-changing nformation echnology ndustry, he Acer Groupreformulated tscorporatestrategies nd changed ts organizational tructure.1976-1991: The Start-up Stage,Gradual Diversification and GlobalisationOriginally calledMultitech,Acer was ounded n 1976by StanShih,his wife and ive otherpartnerswitha start-up apitalof US$25,000.During he nitial years,Acer operated sa distributorof electronicproducts nda consultantor microprocessorechnologies ithin Taiwan.Acer's first personal omputer(PC)was ntroducedn 1983.As the PC marketbegan o growafter 1983,Acerstartedo manufactureIBM-compatiblePCs under ts own brandnameand or othercompanies.While Acer began ts operationas an OriginalEquipmentManufacturerOEM),makingPCs or saleunder eading ompanies' randnames n the UnitedStates, apan, nd Europe,Shihwas determined t the start-up tageof the companyto become n Original BrandManufacturerOBM), producingandmarketingAcer'sown brandproducts.

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To havebetter control of the supplyof PC componentso manufacturets own brand nameproducts,Acerstarted o invest n manufacturingntegrated ircuits lCs) and DynamicRandomAccessMemories(DRAMs) in the ate 1980s.A diversification trategywas adoptedo developAcer'sproduct ines urtherto coverboth components ndperipherals.n 1987,Acer Laboratoriesnc. wasestablishedo designandmanufacture pplicationSpecific Cs and chipsets. process f verticalbackward ntegration nsued,leading he Acer from marketing roducts,hroughassembling Csystems,o designing ndmanufacturing arious T components. he Group'sdiversification trategJwenthand-in-hand ith itsmove owardsglobalisation,hrough he acquisition nd elocation f partof its manufacturing rocessoffshore.To acquire new technologiesand furtherpenetratehe U.S. and Europeanmarkets,AcerAmericaCorporationook over wo Americancompaniesn 1988and 1990 espectively.n 1989, he firstoverseasactoryof the Groupwas built in Penang,Malaysia,o lower he costsof producing olormonitorsand keyboards.Declining Corporate Performance, Organizational Restructuring in I 992The 1980s roughtsignificant hangeso the T industry.With more advancedechnologies roducingincreasingly owerfulmicroprocessors,anyof the asks hat could onlybe doneby minicomputersbefore could now be carried out by PCs. Acer America Corporation'sacquisitionof CounterpointComputersand Alto Computer Systems n the late 1980sprovedsomewhata failed move and it lostaroundUS$20million annually or a coupleof yearsafter1991.For he Groupasa whole, ts first lossofUS $22.7million after axeswas recordedn 1991andover 400 obs in Taiwan werecut. Moreover,manyof Acer's customers educed he OEM ordersbefore hey could regain he lost market share.IBM decided o enter nto the PC marketby puttingtogetheroff the- shelf components ather han makingfinishedPCsusing ts own hardware nd software roducts,he closed ramework hatcharacterizedheproductionof mainframe omputerswasreplaced y an opensystem n themanufacture f PCs.Theadoptionof opensystem roductionmadePCsmoreor lessstandardizedommodities, hich could bemanufactured ccording o published tandards. o operaten anenvironmentn which high speed ndlow costsACER adopted newcorporate trategy uttressed y three mportantpillars: he "fast-food"businessmodel, he client-serverorganizationalstructure,and he global brand, ocal touch forms ofinternationalzation.The fast ood businessmodel was mplementedn l99l to achieve heprimeobjectiveof maintainingowoverall cost and delivering finished products o the markets aster.Sincemid 1992, Acer haddecentralizedthe processof assembling inal PC products,movingthat processo what were calleduniload (assembly)sites ocatedaround he world. Insteadof manufagturingwhole PCsystems, he Group's manufacturingsites n Taiwanproduced tandardized C components nd subassembliesimilar o the "ingredients"nthe fast food. These ingredients" were hen put together nto final products n Acer's 39 uniload sites(four of which were for OEM customers) catteredn variouspartsof the world where he marketswerelocated. nnovative echnologies nventedby Acer facilitatedsucha disintegrated orm of production.The"chip-up"technology ontributed o the easyupgrading f computersand he "screwless ousing"technoloryallowedvariouscomponents nd sub-assemblieso beput togetherwithin only 30 secondsntofinishedPC systems.The client-server rganizational tructure ncompassedtrategic usinessesnits SBU) organized longproduct inesandRegionalBusiness nits (RBUs)aroundgeographical arkets.Strategic usinessUnitswereprofit centresof the Group with their own profit objectives,marketing,and productstrategies. heywere functionally oriented o engage n R&D, manufacturing,productmanagement, nd OEM salesof PCts.SixSBUs ook of variousmanufacturingites n Taiwan the Philippines,nd

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Malaysia o produce ifferentcomponents uchasmotherboards, onitors,and PC housings.Altematively, heRBUs were ormed o takecharge f the assembly, istribution, ervices, nd marketingof productsn their respectiveerritories. hey alsooperatedndependently,ocusingon meeting heneeds f different egionalmarkets.Althoughoperatingndependently,he business nits n the Group'sclientserver rganizational tructure ctuallyconstituted loosely-coupled etworkof firms.The RBUswerenot obliged o buy from he SBUswithin heGroup;but f theydid, heyneededo paymarketpricesfor thegoodsand services.Building on the client-server rganizational tructure,he Groupadoptedhe "Global Brand,Local Touch"approacho help urther ntemationalize nd mprove ts competitivenesssan OriginalBrandManufacturerOBM). The meaningof "Local touch" was o foster ocal ownership ndmanagement fthe Group'soverseas usiness nits.At its extreme,ocalpeoplewereencouragedo hold the majorityshares f Acer's overseas usiness nits,which couldbe istedon ocal stockmarkets.By entering ntojoint ventureswith local partnersn overseasmarkets o assemble,market,sell, andpromoteAcer brandproducts, ocal shareholderswere expectedo perform he day-to-daymanagementwork more effectivelyand cooperate loselywith the Group.These ndependent usiness artners ould addresshe uniquedomesticneeds f local customersn the fast ood businessmodel,creating strongandpositive magefor the Acer brands verseas.The revenue f the Group ncreasedrom US$986million in 1991 o US$ 3.22billion in 1994,only threeyearsafter implementing he reformulatedcorporatestrategies nd restructured rganization.Net profitsgrew rom US$26million to US$205million over he sameperiod.Retumon equity ncreased 4.20nI 994,comparedwith a negative igure n I 991Source:Poon.TS (2002).Changing trategy ndstructure: he Acergoup competing n the nformationtechnologyndustry.?"he CaseStudvJournal2(2\ o 82-97

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organization design 15dec08 (1)

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