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Strategic Implementation at Dell

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Dell Computer grew rapidly from its founding as one-person, dorm-room operation in 1984. As the company has grown, Dell’s structure, control systems, and culture has changed to keep the firm on track to reaching its strategic goals. Michael Dell hired managers with computer industry experience from firms such as IBM and Compaq. Together, they formed a functional structure with a taller hierarchy, in which Michael Dell delegated authority to his functional managers. Dell’s organizational culture emphasized hard work and customer service, leading to high profits and satisfied buyers. However, as Dell continued to grow, its functional structure could not support higher levels of coordination and specialization. So Dell moved to a customer structure, with divisions focused on the unique needs of each customer segment. As Dell grew even more, it developed even more specialized teams for different segments, and it increasingly turned to the Internet for coordination, allowing the firm to decentralize and become flatter.
Teaching Note: Dell has been forced to change its structure, control systems, and strategy several times as it has grown and the industry has matured. This situation is one that has been played out, over and over again, in many different companies. You can give other examples to students, such as the way in which GM moved to a divisional structure after acquiring competitors such as Cadillac, Pontiac, and Buick. Another discussion point is the interrelatedness of structure, control systems, and culture, which is shown in Dell’s centralization and subsequent decentralization, its taller then flatter structure, and so

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