MS-10 Organisational Design, Development and Change Exam Paper

MBA - Master of Business Administration

Note: The paper consists of two Sections A and B. Answer four questions from Section A (15 marks each). Section B is compulsory (40 marks)

SECTION A

1. What are the pre-requisites of a good organizational design? Discuss the limitations whihc affect organizational dsign, in detail.

2 Discuss the role and competency of a change agent. Discuss with suitable example.

3. Describe the organizational restructuring strategies and discuss the new perspective on organization design.

4. Describe the importance of interview as a diagnostic tool and discuss different types of interviews and their advantages and limitations.

5. Write short notes on any three of the following:
a) Quality of work life
b) Contemporary approaches to job design
c) Resistance to change
d) Phases of planned change
e) T-group training

SECTION B

6. Read the following case carefully and answer the questions given at the end:

In 1995 Ford motor company announced a major reorganization called "Ford 2000". The idea, championed by chairman and CEO, Alex Trotman and vice chairman Edward E. Hagenlacker, eliminated more than a dozen engineering design centres around the world and consolidated them into only five- of which four are in Dearborn, Michigan, and one in Europe. The one in Europe was responsible for creating one basic design for small acres for the world market and then marking minor modifications for local markets. For example, the same template will be used in Europe, south america, and asia. The four design centres in Dearborn will do the same for large front-wheel drive cars, rear-wheel drive cars, pick up trucks, and commercial vehicles. The consolidation effort requires that more than twenty-five housand salaries employees relocate or at least report to new managers. Manufacturing and assembly will still take place in plants around the world.

The purpose is to intgrate Ford's operations around the world and revolutionize the way it designs and builds more than seventy lines of cars and trucks, which it sells in more than two hundred markets. The goals are reduced duplication of effort, increase volume purchasing, save more than $4billion per year, and double profitability. All this for a company made #3.8 billion profit from automotive operations in 1995 and $ 5.3 billion overall. Trotman continues to have the support of the Ford family, who still controls 40% of the voting stock in the company.

Part of the new plan is a top-secret strategic document that outlines every new car and truck Ford will design, produce, and sell around the world through 2003. The plan calls for reducing the basic design platforms from 24 to 16 and increasing the total number of models by 50%, while saving billions of dollars. For example, the new 1996 Taurus serves as the platform for several other models, both in the United states and around the world.

In structure, the system is really a matrix. rather than working in a functional organization with traditional hierarchies and centralised decision making, employees are assigned to a design centre, such as small cars, and then to a group according to their specialities, such as drive trains. Mangers then mediate the disputes that occur between the design centres and the specialities. Employees will have to change their ways of doing their work as they design cars and trucks to fit global markets rather than a single, relatively homogenous one. Management knows that employees feel a great deal of insecurity and uncertainity about the company and their jobs as they make the shift. carrying the message to all employees has been a constant job for Trotman and Hagenlacker simce the original announcement.

Management also knows that Ford tried similar design integration with their "World Car" in the late 1970s, which failed primarily due to turf battles among designers and engineers. The cars that resulted were rarely the cost savers Ford hoped for, and were so dull in their design that no one bought them. Trotman expects different results this time because of the consolidation of the design centres, the new organziation structure, and because advances in technology have made the inner working of cars so similar that only the outer, visible portions of the casr need to be different to satisfy regional tastes.

By mid-1996, however, the reorganization was not going so well. The transaction had left many employees still wondering whom they worked for and with a feeling that everything was out of control. The culprit seems to have been a reorganization of the reorganization! Trotman now plans to reduce the number of design centres from 5 to 3. people are moving and reporting relationships are changing once again. Group vice president jacques A. Nasser, who may succeed Trotman by 1998 or so, has promised $1.1 billion in savings under the new system. Some have claimed that the "new" reorganization really puts things back the way they were before the first reorganization. However, there design centres is alot fewer than dozens that existed before. But this second reorganization, before employees really got settled into the first one, may have devastating effects. Suppliers and employees do not know whom to contact to get questions answere or disputes resolved. All they get on phone is voice mail, since everybody is in meetings trying to work out the new reorganization. Top mangement has been relatively successful through the years. They say that the organizations needs to evolve to meet their ambitions goals and the competetion.

Questions

a) Describe the changes in structure that Ford expects from the Ford 2000.
b) How do you explain the continuing problem that employees are having with adapting to the new structure of Ford 200?
c) Is a matrix structure the proper structure for Ford 2000?