Case Study: Widgets 'R Us
Widgets 'R Us (WRU) is a medium-sized firm specializing in the design and manufacturing of quality widgets. The market for widgets has been stable. Historically, WRU has had a functional organization design with four departments: accounting, sales, production, and engineering. This design has served the company well, and it has been able to compete by being the low-priced company in the industry.
In the past three years, the demand for widgets has exploded. New widgets are constantly being developed to feed the public's seemingly insatiable demand. The average life cycle of a newly released widget is 12-15 months. Unfortunately, WRU is finding itself unable to compete successfully in this new, dynamic market. The CEO has noted a number of problems. Products are slow to market. Many new innovations have passed right by WRU because the company was slow to pick up signs from the marketplace that they were coming. Internal communication is very poor. Lots of information gets kicked "upstairs," and no one seems to know what happens to it. Department heads constantly blame other department heads for the problems.
Questions
1. You have been called in as a consultant to analyze the operations at WRU. What would you advise?
2. What structural design changes might be undertaken to improve the operations at the company?
3. What are the strengths and weaknesses of the alternative solutions the company could employ?