HBS: Specialty Medical Chemicals

February 24, 2010

In the case above I certainly found the most interesting dynamics within the organizational structure to be the following:

  • Job Redesign: in order for SMC to be competitive and stay in business, it was essential to adjust the organization’s structure and systems to achieve its goals as it was SMC’s new CEO Carl Burke’s original idea: to reorganize the company “either by demoting or firing people” although it was a bit premature because he never tried to change behavior by changing the performance evaluation processes and the pay structure. Therefore, an organization development (OD) is fundamental for every company to increase individual and organizational wellbeing and effectiveness by defining and organizing work relationships and roles, that is between individual skills and the demands of the job, as well as establishing clear patterns of organization, communication, and ways of getting things done.
  • Motivation:  Under former SMC’s CEO Barry Tompkins’s management the company was more number-oriented company rather than people-oriented company, as a result employees focused more on the technical side of the things rather than people’s behavior, therefore the systems were highly efficient but not necessarily effective, and so that led employees to grow complacency and we know what complacency can do to a company right, in this case it generated lack of growth (normative commitment) and lack of innovation (no challenge), such behaviors that undoubtedly set an organization up to fail, since employees never go above and beyond the call of duty (citizenship behavior).  
  • Accountability: CEO, VPs, managers, and everybody else down the line needed to be held accountable for their job at SMC. Carl Burke showed an autocratic style dissonance as he did not mandate that everyone come to work. Carl was as much a specimen as anyone else which was part of the problem.   
  • Trust: Intelligence of each VP questionable. Carl’s fundamental attribution error. Carl hired an external consultant to solve the company’s problems (you should hire consultants to help teach you things you don’t know how to do rather than asking them to solve your problems, that creates dependency). Carl redesigned the organizational structure so that VPs no longer shared information.  

In the end, the independent consultant Laura Wells did come up with great and interesting conclusions, however Carl still won’t make the call to implement a team work spirit, open communication, or decentralized decision making (organic structure).

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