CASE 3: CONTINENTAL CAN COMPANY OF CANADA, LTD

Question 1: What kinds of organizational design choices has CCC made about the four design challenges (a. Vertical differentiation, b. Horizontal differentiation, c. Integration Mechanisms, d. Standardization Mutual Adjustment) Answer: VERTICAL DIFFERENTIATION: Vertical differentiation refers to the depth in the structure. The Canadian Can Company of Canada is a tall organizational structure as there are six levels in the hierarchy, including shop floor employees, and 500 employees. The span of control that the plant manager Fox has is 8 and the span of control that the assistant manager Andrew has is 15. There are total three shifts. All the subordinates are in manufacturing related tasks and are doing the same routine work so the evaluation of their activities and work is easy. In CCC the top management, Fox and Andrew solve the problems and make decision so the company is centralized. HORIZONTAL DIFFERENTIATION: The main function of the company is manufacturing. CCC makes a wide variety of different kinds of cans. The principal products of the St. Laurent plant were Open Top food cans, Bottle caps and crowns, steel pails, and general line containers. The other functions include production control and quality control. There is functional specialization as the tasks of machine operators are highly repetitive. CCC also has a geographic structure or spatial differentiation which refers to the degree to which the location of an organisations offices, plants, and personnel are dispersed geographically. The plants of CCC are located in different parts of Canada. The reasons for this spatial differentiation or geographic dispersion is because there are high costs involved in transportation and because there is a large variety of different products. INTEGRATION MECHANISMS: There is integration between the employees as reported by Fox. He commented that frequently two managers with different job titles re assigned responsibility for the same task. The authority is delegated to various staff department heads to implement decision within the framework of the budget. CCC can contact on an informal basis. That is, they with other plant managers directly for information when manufacturing problem exists, without going through the division office.

STANDARDIZATION MUTUAL ADJUSTMENT: Formalization or standardization refers to the degree to which jobs within the organization are standardized. In CCC there is a high level of standardization. There are the written rules and procedures. There are twelve volumes of general instructions and lots of special manuals that have been provided to the employees of the plant as explained by the plant accountant, Hunter. The plant industrial engineer, Joe Herman has also explained that the company is on standard cost system that is all our product costs are based on engineered standards, accurately measuring all labour, direct and indirect, and material that is expected in the manufacturing of each and every item they make in their plant. Question 2: Given these design choices. How would you describe CCCs approach to coordinating and motivating employees? Answer: CCC has created a mechanistic structure through centralization and standardization. To motivate employees the budget is used for rewarding employees. According to Andrew Fox the bonus is paid on the years results. It is paid as a percentage of salary to all those who are eligible. In past years, St. Laurent managers had made about 10% of their salaries from the bonus. Foremen are given authority to do anything as long as they meet the budget. And for co-ordination between the management and the labour foremen believes that the supervisor and employee should understand and respect each other. Question 3: Are CCCs organizational structure and design choices appropriate? Answer: The mechanistic organization is appropriate for CCC. Standardization helps employees regarding all the policies and they get to know what they should do and what not to do. Through centralization the top management has the authority to make decisions. But on the other hand foremen have also been given authority to do anything they want as long as they meet the budget. This reduces the tension and pressure of top management. The span of control is also appropriate. All the subordinates are doing the same routine work so the evaluation of their activities and work is easy.