TROUBLED SPAIN CASE

Valeria Botero, Amelhi Bojacá, Daniela Sánchez and Giovanni Capece

1. What are the organizational challenges that may explain Troubled

Spain’s difficulties?

The organizational challenges presented by Troubled Spain can be explained

across its formal and informal levels.1

1. Formal structure:

The failure of the implementation of the formal system that constitutes the
organizational structure of the company does not allow good relations among the
tasks and the authority of the departments. The HR director mentions that as a
consequence of the lack of differentiation, employees do not have clarity about their
roles or functions and this has negatively affected their performance.
As well, changing of roles throughout the years have contributed to the
weakening of the structure´s composition; there is an organizational bureaucracy
problem as a result of the lack of coordination between managers. For instance,
cooperation with each other is almost non-existent, especially between engineering,
font manufacturing, R&D and the rest of the departments (see in Figure 1).

2. Informal networks of communication:

Poor communication within the organization has had negative impacts on the
performance of departments such as manufacturing and R&D where the lack of
communication and clarity of roles has generated tensions between them, especially
when it comes to the division of tasks and responsibilities.

Informal networks represent a challenge for the creation of effective teamwork

and motivation dynamics. This is due to the fact that there is no type of well-

1 The informal level refers to the relationship networks created by the employees and the formal level
has to do with the official patterns of control and coordination that channel the activity of the company.
established hierarchy, (see in Figure 1) which means that the authority that would be
had through formal channels is lost, affecting the quality of the information.

3. Weak organizational culture (informal):

There are strong departments that lack shared values. This can be explained
from the structure itself and its history, the changes and the lack of communication
has caused the departments to lock themselves in their own cultures and have
conflicts derived from subunit orientation, lack of corporate identity and damaged
social relations.

4. Informal leadership:

As seen in Figure 3, internal dynamics of the company reveal the different

hierarchical levels of informality. James stated that this chart provides a deal of
information about which managers are recognized as informal leaders. The informal
leadership in the company has been not only disorganized but has resulted in a
wishful interaction between different sectors of the company, provoking mislead and
leadership issues.
 What should James Reilly do to address the challenges you identify and
change the organization?

Considering the time constricts that James faces, we believe that the best
course of action is a drastic change in the organizational structure. It is necessary to
implement a matrix structure, in which, Manufacturing, R&D and the Engineering
department are the main areas.
The matrix structure is the best option for Troubled Spain for three main
reasons. To begin with, this way, the organization would have more flexibility towards
a changing environment (Jones,2013), which, given the time, is completely needed
for the organization to survive the fast, coming changes and adapt to the new
organizational regime and culture. Additionally, the matrix structure allows for
interdisciplinary cooperation (Jones,2013), a characteristic completely needed within
the organization, since their biggest problem is lack of communication. Finally, in a
matrix structure, Troubled Spain would be able to have a more efficient use of
resources (Jones,2013), in this specific case, the employees. Considering that there
are only 190 employees and a lot of work to do for the organization to succeed, the
development of general and specialist management skills is a great asset that the
matrix structure gives (Jones,2013).
According to the study and interviews made to the employees, the
Manufacturing and Engineering areas are the most responsible of the decisions. By
naming them as heads of the structure and organizing them in small groups, many
problems, mainly communication and work division could be solved. This way, the
production will have a notorious acceleration and therefore, there will be more
innovation and development of the company, through its different areas.
With this decision, the organizational structure will be more organized, and
employees would know which are their tasks or things they need to do, as well as the
superior they must respond to. Additionally, to enhance the work in the 6 established
months, goals must be established, and as they’re being accomplished, incentives
should be offered by each head of department for the best workers who are making
the greatest contribution to the organization.
Figure 1: Difficult interdependencies and collaborations
Figure 2: Communications
Figure 2: Informal leadership
 References

Case Troubled Spain. Leading organizational changes through networks and design
(2017). Retrieved from: https://hbsp.harvard.edu/tu/04f6f46a

Gareth R. Jones. (2013). Organizational Theory, Design, and Change

(7th. Edition). Prentice Hall: New Jersey.