Question:
Assessment Description:
You are expected to outline the theoretical concepts relevant to the issues described in the case study, apply the theory and answer the questions.
A Tale of Two Companies
This is the tale of two computer companies, Logica and Software Solutions. Logicasells, services and supports desktop computing solutions for large corporate and government organisations. Software Solutions develops customised desktop based computer software to meet the needs of corporate clients.
Logica:
Logica had been established by an entrepreneurial and very charismatic person, Colleen Thompson, who grew the business from just her and an assistant to a 250 person organisation with branches in all the capital cities of Australia. It now counts in its client list the largest corporate organisations in Australia.
Logica sells computer hardware and off the shelf software as well as providing hardware maintenance and repairs and software training and support to its customers.
Logica expanded through the acquisition of other smaller providers and had successfully incorporated these organisations.
Each branch, structured on geographic lines, had a General Manager and a functional structure with the following departments reporting to the General Manager:
Sales,
Hardware Support,
Software Support &Training,
Administration.
It has a very small Head Office comprising the Managing Director (Colleen Thompson), Finance Director, Marketing Director.
Staff are required to wear business attire and unless visiting clients were expected to be at the office from 8.30 am to 5.30 pm. Because of the commodity nature of the product the organisations strategy is focused on cost leadership, and improvement of internal processes.
Staff are rewarded through performance based commission pay systems based on the amount of profit generated by each individual. This works well for the Sales Department but causes problems with the Hardware Support and Software Support Departments. The staff in these sections feel compromised because they can’t spend the necessary time to solve the customer’s problem because of pressure to invoice and close out calls.
Software Solutions:
Software Solutions was also established by an entrepreneurial and very charismatic person, Ted Keeling. The organisation is only young and comprises just 30 staff. With the exception of Ted, an Administrator, and a receptionist, all the staff work in project teams developing customised software solutions for customers. As needed, teams are created to address customer problems so new teams are being formed continually.
Software Solutions has an excellent reputation for customer service and the quality of its technical solutions. It is developing customised software for many of the same corporate customers that Logica services.
Software Solutions has its offices in Sydney with everyone co-located in the one location. The culture is very relaxed with flexible work hours and a casual dress code. Each month at the monthly staff meeting, staff are briefed on their performance against budget and awards are made for exceptional customer service and most innovative solutions. The recipients of the awards are nominated by fellow staff members.Staff are paid a competency based salary together with bonuses based on the achievement of team objectives set at the outset of a project.
Merger:
Colleen had identified that one of the problems with Logica was its inability to meet the customers’ software development needs and had been looking for an organisation with this capability to acquire and merge with Logica. She identified and acquired Software Solutions for this purpose.
As part of the deal, Ted had been contracted to work at Logica for three years.
Answer the following questions:
- What is organizational culture and how do we identify it? Compare and contrast the organisational cultures at Logica and Software Solutions. Would you recommend Colleen force Software Solutions to adopt the culture at Logica and why?
- Considering the three contingencies that determine the organisational structure, which organizational structure would you recommend Colleen implement in the merged business and why? Address the following dimensions of organisational structure, centralisation, formalisation, span of management (tall v flat).
- What is departmentalisation? Describe the main features and list the advantages and disadvantages of Divisional and Functional departmentalisation. Which of either Divisional or Functional departmentalisation would you recommend to Colleen for the merged organization and why?
- As the business goes through the change brought by the merger, what leadership style should Colleen adopt and what behaviours would it involve?
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