1.

SMARTOS ORGANIZATION

Although the company and its functions are divided to production, sales & marketing, human
resources and finance, our team isn’t divided in a similar way. We see that the barriers of
information sharing between functions would be too high in a such situation and thus we are
organized in a way that everybody can and should take responsibility and have opinions on
every function. We, as a board of directors for Smartos, are equal and the cooperation and
communication between individuals is regarded very important. Our organization can be seen
in a way as a matrix organization and is represented in the figure 1 below.

Figure 1. Smartos organization chart.

It must be noticed that there are risks and possible problems related to this kind of
organization, though. Since everybody should know and have an opinion about every function
and the decisions are made in cooperation, there is still the risk that communication and
information sharing between our team members is not at sufficient level. Some might also
argue that when the responsibility is shared and scattered, after all no-one actually takes the
ultimate responsibility. The third possible risk that must be taken into account is that this kind
of organization model most likely take a lot of each individual’s time and may not be as
efficient and effective as some other organization model.
 2. STRATEGY

The visio of Smartos is to be the leading manufacturer of products 1, 2 and 3 worldwide.

Towards reaching this visio, Smartos employs a cost-leadership strategy as defined by Porter.
Smartos uses its management accounting and forecasting expertise to ensure the low cost of
its products as well as continuous marketing and R&D effort. The key for achieving low costs is
minimal extra overhead costs and decent quality. The customer comes first and in this highly
price-sensitive market efficiency is the key for dominion. Smartos relies on traditional means of
marketing rather than Internet, but focuses on both EU and Nafta with equal passion.

We implement this strategy firstly by cutting assembly times. This cuts our lead-times and also
increases capacity. We have to be very careful about the salaries and amount of workers,
because it includes huge risks relating to employment job satisfaction and retention, which
affect highly on our quality and capacity. Even though the quality is not our focus we have to
keep it on decent level, otherwise our quality expenses can explode and customers are not
willing to buy our products.

To achieve low costs Smartos tries to keep marketing, R&D, management and distribution
costs low. This does not mean that expenses are cut to minimum level, but the level has to be
reasonable. We have to make improvements to our products and promote them, but we have
not to be on the leading edge. Smartos emphasizes product promotion over corporate image.
This is because improving corporate image is needs more investments to achieve some results,
by concentrating on products Smartos can focus costs more efficiently. Low costs allow us to
sell our products at low prices and reasonable margins. It also gives us opportunity for price
competition if necessary.

Smartos uses traditional distributor and agent channels to distribute its products to the
market. In this point Smartos tries to cut distributor commissions to lower the costs, but
respectively gain volyme, which balances channel incomes. Even though Internet could be
cheaper and more global channel, we trust traditional channels can reach larger markets and
believe our customers value possibility to do business with people.
 3. OWN GOALS AND TARGETS

-Selling our productions more than the other groups:

That is the reason why we are beginning the competition with low costs. We want the demand
as much as possible. So we can provide the dynamism of the company and regeneration of the
product easily.

-Spreading into larger area as fast as possible:

We also interested in the amount of people who have already used or have some information
about our products in EU and NAFTA. In addition, we want to do that quickly in order to be one
move ahead of the other groups perpetually.

-Providing the viability and sustainability:

We know that this is a competition where the one which can stay on foot and keep its power
in the longest time will be the champion. So we need to play by rules.

-Keeping things organized. We are keeping weekly board of directors meetings to arange time
for analysing the game and making decisions. This is how we can make decisions jointly, we se
this best way to play the game. All corporate functions have effect on each other and the
number of decisions is low, so this is not the reason to share workload. Biggest risk with
separete decision making is that communication doesn’t work. People can make decisions that
are not in line with our strategy or decisions of others. By doing decisions jointly we prevent
this. This also decreases need for time consuming e-mail pingpong.