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Structuring Organisations
As J Franklin, you have decided on the new direction for Burke Engineering. The company
will be concentrating on the manufacture of increasingly specialised valves. In the
business plan, you have already decided the company's new core competence: design
and manufacture. Decisions on subcontracting many areas of the company's operations
have since clarified what will be organised and managed internally. You have, for example,
decided that tool cutting, distribution, security and catering will all be subcontracted. This
has considerably simplified the tasks of many departments.
The technology audit has further clarified the work load issues. You have decided to install
all the technology that was suggested by Carron Associates with the exception of robot
arms in the foundry area. Your decision is that re investment in this area should wait until
the arrival of the new generation of automatic foundries and that foundry staff should
receive additional training to ensure that safety standards are raised and maintained. You
can reduce the total labour force and change the company from a large, poorly skilled and
poorly motivated collection of individuals towards a small, highly skilled and highly
motivated group. Your expectation of what the organisation will look like is included in
Table 15 in Appendix A.
You anticipate that the total number of non management employees will initially decline:
from the 320 employed at your appointment to approximately 165. There will be decreases
in certain areas, but a need for additional employees in technical support, research and
sales. With the freeze on recruitment that you announced on your arrival, the high turnover
of staff has already ensured that 50 staff have left and not been replaced. A further 20
youth training scheme, short term employees, are leaving in the next week. You have
announced 40 redundancies in all (the areas that you have decided to subcontract
including tool cutting, catering, physical distribution, security, and data processing.
You feel that natural wastage in all areas of the company, apart from secretaries and
finance, will enable you to meet the new manpower targets without further redundancies.
Planned redundancies among secretaries, finance and accounts staff will shed a further
25. You have informed the unions of this decision, and have gained their agreement to the
new business plan. Their resistance to the introduction of new technology has been
significantly reduced by the time that you have taken over the discussion with all shop-floor
staff, and the promise of re-grading and training that will accompany the changes that you
have proposed.
Your attention is now on the need to tackle the company's structural problems and to
develop a new management team, as you are aware that the main obstacles to new
working practices will be amongst management rather than the shop-floor. From your early
days at Burke you realise that the existing divisions within the organisation have been a
major contributory factor to its poor performance in the market. You are determined that
the change in company direction, now underway, must resolve some key organisational
issues. Of particular concern are the inter relationships between production and technical
departments and between sales and marketing and production.
The organisation of these four departments did not meet either the demands of customers
or those of company control. This was underlined by an assessment by major valve
customers of the most important factors in supplier selection. Their most important criteria
were: quality and reliability of the product, speed of manufacture, the sophistication of
materials and design, and guaranteed delivery.
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