Case 20: Rondell Data Corporation

Problem Statement: The problem in this case is that the firm is working in simple differentiated structure causing poor interdepartmental coordination.
• Lack of flexibility: Rondell’s departments have shown an inability to deal with the 900 production change orders and 2,500 changed drawings this year.
• Centralized structure: Decision-making happens from leadership. Mid-level managers carry little responsibility towards accepting product changes.
• Informal structure: “Doing things collectively and informally just doesn't work as well as it used to.”. This would not work for a company of 800 employees.
• Products are going to production before they are fully developed; under pressure from sales to get out the unit- this hinders the entire process.
• Incorrect use of specialists: Engineering services employees are used below their capacity to contribute and are denied functions they could be performing.
Solution Statement: The solution to the problem we have identified is to implement a matrix organization structure to increase coordination.
• Matrix structures endorse flexibility, encouraging an environment that deals better with adjusting to change. Functional areas maintain a stock of talented employees to meet projects' requirements.
• Mutual adjustment is the primary means of coordination within the upper layers of a matrix structure, and decision-making is decentralized among matrix managers.
• A matrix structure will create more standardization resulting in integrated work activities.
• Resource co-ordination: functional managers focus on hiring, training and managing employees in their departments, while project managers can focus on achieving the goals of their specific projects or products.
• Specialization: Instead of being good at a variety of tasks, specialized employees can excel at tasks in their field