What would be the ideal organizational design for a company

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Reference no: EM131524969

Question: A Structural Straitjacket at Wild Wear

Wild Wear makes clothing, rain gear, and sleeping bags for hikers and other outdoor enthusiasts. The company began when Myrtle Kelly began sewing pile jackets that her husband Ray sold on college campuses. It now employs almost five hundred people organized into traditional divisions such as marketing, manufacturing, and research and development.

Recently it became apparent that although Wild Wear's balance sheet appeared healthy, the company was stagnant. Everyone seemed to work hard, and the company's products seldom flopped. Yet Wild Wear seemed to have developed a "me too" posture, bringing new products to market a season or a full year after competitors.

The Kellys, who still run the company, pored over performance appraisals looking for the weak points that might be holding the company back. But it seemed that the human resources department had been doing its work. R&D was coming up with a respectable number of new products, the manufacturing facility was modern and efficient, and the marketing tactics often won praise from customers.

Baffled, the Kellys called a meeting of middle-level managers, hoping they could provide some answers they had missed. They were shocked when they noticed that the managers were introducing themselves as they came in and sat down. People who had been working in the same company for years had never even met! The meeting began with this observation, and for ninety minutes the Kellys sat back and listened to the problems their managers raised.

It became clear that in the attempt to grow from a family operation into a larger company, the Kellys had assumed the two needed to be very different. When they started out, the two of them handled all aspects of the business. Ray would hear from a customer that backpackers really needed a certain product. He would pass the idea on to Myrtle and order the materials she needed, and within a few weeks he would offer the product to the delighted customer. As the company grew, the Kellys began to worry about their lack of formal business training and hired professionals to run each division and set up appropriate rules and procedures.

What they had created, the middle managers informed them, was a number of very efficient, productive divisions that might as well have been separate companies. The R&D people might come up with a new breathable fabric for rain gear, only to find that production had just begun making a new rainwear line out of the old fabric and that marketing was turning all its attention to selling the big inventory of sleeping bags. Each division did the best it could with the information it had, but that information was very incomplete. Products progressed linearly from one division to the next, but it always seemed as though an idea that had been ahead of its time did not yield a product until the time had passed.

To remedy the problem, the Kellys decided to call in a management consultant to create more of a matrix structure for Wild Wear. While they were waiting for the consultant's solutions, they began holding weekly "horizon" meetings. The group of middle managers would get together every Monday and discuss what they saw on their horizon. After less than a month of such meetings, the excitement generated promised better things for Wild Wear as the managers stretched to expand their own horizons and to help others bring their ideas to light.

Case Questions: 1. What would be the ideal organizational design for a company like Wild Wear?

2. What does Wild Wear's experience say about the need for periodic corporate restructuring?

Reference no: EM131524969

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