Congruence model says strategic problems are due to misalignment of the organizational archiecture– poor fit to strategy, environment; poor alignment among parts of organization.• Problem identification– Problem at gap between strategic goals and outcomes• First stage– Falling sales– Missing growth targets• Second stage– Slow product development– insufficient new products– Poor service & delivery– Poor morale• Third stage– Conflict among functional groups around product development and serviceRoot problem: poor relations among functional groups. This is a problem in formal organization. Formal organization is about grouping and linking. Problem of linking or coordination and finding consistent mechanisms• Strategy• Of corporation– Leverage capabilities in product development– technologies relating to glass– and manufacturing » Maturing industries means mktg now the critical capability– Niche with defense department• EPD– Use capabilities in glass to get a foothold in consumer electronics and telecommunication» Initially manufacturing, shift to marketing competence» New products– small modifications– Lack of clarity, consensus on division goals» Relatively clear group goals– Environment• Corporation– Held to same performance standards as other divisions– Career tracks for EPD people– Strong culture of corporation– EPD decentralized– less tied to corporation– Different environment, but same structure• Business conditions– Old (and still true for corporation)» Stable demand for products» Little pressure to develop products quickly» High margins» Low competition in their niche– New » Intense competition on price, quality, and delivery» Greater uncertainty» Short product life cycles» Fast product development cycles» Thin and declining margins– Is the stringent environment the cause of the problems? Or simply increases the pressure to integrate and align.– Formal organization• Formal structure– How much differentiation?» How many groups? How interdependent?» Different cultures and goals of divisions» Physical proximity: PD’s focus on process – under plants. PD’s relations with Manufacturing is good. Mktg located elsewhere.» Mnfg– slow, not risk-taking (more than usual)» Sales– dispersed. Close a deal.– How much integration» Structural mechanisms:» 1. Hierarchy» 2. Meetings» 3. There was the decentralization to plant level--liaison» Nonstructural:» Corporate culture» Marketing as de facto but not formal lead strategic function– prod dev.» Power and status of manufacturing and product development» History & culture of corp» Manu as profit center– (former) decentralization of division• Formal systems– Control system (accounting): Measurement and appraisal» Manufacturing as profit center– gives them club» Marketing as cost? center» Sales evaluated on volume; wants fast delivery to pleaseclients.» People evaluated by functional bosses» Sales orientation of marketing– People– New management team brought on by Rogers– Questionable competence of marketing– Formerly people in sales– Mktg people questing competence of sales– Motivation of manufacturing people to rise in corporation – Mktg people unmotivated to be coordinators (Moss)– Rogers as division manager– A scientist, no a general manager– Contrast with Bennett who was an entrepreneur– Smart, may be able to learn– Overcame service problem– Took initiative consult Corporate OD– Informal Organization– Culture/networks– Poor alignment between culture of corp with EPD strategy & org– Weak in division, strong in corporation– Not risk-taking in corpor or division (due to Bennett?)– Top team not a cohesive or natural group– The product development process– Reciprocal interdependence but independent input, assess viability of project.– Meetings as a coordination mechanisms– Rogers helpful but focused on technical issues; not mgt.– meetings in Allentown each acctg period to
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