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Kyle Robbins

OB 360

SMA: Micro-Electronic Products Division (A)

SMAs Micro-Electronic Products Division (MEPD) has been having a variety of
difficulties. These difficulties are a result of a multitude of factors; however, according to
Spichty the main reason is the down turn in the economy. However, there seems to be
deeply rooted problems with the organizational structure that have led to the business
becoming very competitive, low morale among employees, and a large amount of conflict
between the different divisions. Due to the internal tension there is also a lack of mutual
confidence and trust among the divisions as well. This stems from the virtual absence of
communication between the divisions and an almost non-functioning chain of command.
With the company in this condition, it has fostered the development of the silo effect.
This functions to generally decrease the companys effectiveness, as the different groups
are unaware of the workings of other groups. Because of this lack of knowledge, it makes
it almost impossible for the groups to work well together, and this thus leads to increased
hostility between the groups.
In order for a company to be as effective and efficient as possible, there must be
some sort of interaction between the different departments. However, with they way that
MEPD is currently organized there is little to no incentive to collaborate, as the different
divisions are assessed through different methods. For example, in the Manufacturing
department the plants were viewed as profit centers and thus, bottom line results were
measured at the plant level by gross margin (plant sales less cost of manufacture) and at
the divisional level by operating margin (total gross margin for the division less selling
and administrative expenses)(28). This difference in approach is not favorable in terms
of incentivizing various departments to come together and share ideas and objectives.
The recent shift in leaders has also led to some tension and confusion among the
MEPD employees. The previous division manager, Jacob Amman, was a very
authoritarian figure. His style of leadership involved him making the majority of the
decisions about the company. This prompted manipulative behavior from his
subordinates, as it required them to go about getting what they wanted in a shady manner.
For example, if he told a subordinate to follow a course of action, and they wanted it
done a certain way they would have to agree at the time. They would then come back
later and say that it would be more cost effective to do it a different way, however if he
still wanted it done they way he originally stated then it would be. This also served to
foster the culture of competition as people felt the need to scheme in order to get what
they wanted.
Spichty on the other hand has a very different leadership style that is almost the
opposite of Ammans. Whereas Amman held his employees to goals that some would say
are unrealistic, Spichty has been very lackadaisical in that matter. He comes off as too
gentlemanly and is thus at times not taken seriously. In addition, he has made several
changes that have served to lower morale among employees. Amman was proud to boast
that his division was one that did not house their headquarters in Bienne, where the
majority of the other divisions were, however Spichty changed this almost immediately.
Also, Spichty replaced almost all of his key managers. This change led people to perceive
low job security, which in turn serves to lower morale and motivation. If people feel that
their job is in danger, they are less likely to perform at a high level as they see no point if
they see their job as up-for-grabs.
In order to combat the negative turn the company has taken recently, there are
many possible changes that could be made. In terms of the lack of communication
between branches, the company could benefit by pairing the different groups and setting
goals that they could both work towards completing. For example, because of the high
tension between Sales and Manufacturing, Spichty could put them in charger of working
together to achieve an increase in sales. Through this course of action they would be
forced to put their differences aside in order to reach the goal. This is a psychological
concept that creating a common goal between two factions has proven to reduce tension
and increase productivity.
Another possible solution to the problem of the lack of communication could be
to have a meeting with heads of each of the divisions. In this meeting, each department
head would be required to present their current situation, goals, and other objectives. The
division heads could then go back to their respective divisions and disseminate the
information gained at the meeting. This would eliminate the lack of knowledge of what
each was group was doing, and hopefully the transparency would help to alleviate the
feelings of negativity among the groups.
When it comes to the problems of low morale among employees, Spichty should
take a direct role in implementing programs to reverse this trend. One such program
could include spotlighting a particular individual each week in the different groups. This
would inspire the employees to perform well as the whole company would recognize
them. This would also serve to reduce some of the tension among the groups. When the
employees were recognized, it would include the goals that they had achieved, and what
the hoped to achieve in the future.
The final proposal for MEPD could be a synergy of all the alternatives named. It
could include creating a new position in charge of working between the different groups.
So that when they had their meetings, this person could serve as the coordinator for the
inter-disciplinary goals. They would facilitate the process and provide help when needed.
In the same respect they would coordinate the goals and help to make sure the different
departments were actively working to meet these expectations. This position should have
an authority just below that of the manager, and have the ability to both hire and fire
employees. This would serve to give this person the credibility among current employees
and hopefully induce them to give their best effort to reach the goals set. After a few
months of the current set up, the company should be more cohesive, there should be
higher morale, and the company should be back on the right track.