Case Study 2.4 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.
This case highlights a company experiencing a number of challenges that are directly related to their willingness to shift to a project-based approach. As the case notes, product life cycles have dramatically shortened; however, at the same time, products are slow to market. Many new innovations have passed right by Widgets ‘R Us (WRU) because the company was slow to pick up signs from the marketplace that they were coming. Internal communication is very poor. WRU is now facing significant challenges.
Assume you are a consultant contracted to analyze the operations at Widgets 'R Us. You have been asked to prepare a report of your findings and recommendations to present to the WRU executive staff. Your report should be approximately 2 pages in length, not including the cover page and references page, and should be written in APA style. In addition to your textbook, you may need to use additional outside resources. Your report should address the following points and questions:
Summarize the situation at WRU as presented in the case.
What would you recommend WRU do first to begin to correct the problems? Justify your decision.
How might the existing functional organizational structure contribute to the problems?
Consider either a matrix or a project organization for WRU.
What are the strengths and weaknesses of each of these two designs?
Select the best structural design to present to WRU.
Draw a sample organizational structure for this design.
Explain how this design change would improve operations.