SOLUTIONS AT ALLENTOWN MATERIALS

ELECTRONIC PRODUCTS DIVISION

Created cross-functional project teams for new

product development
Corporate OE specialists on team

Marketing was formally named as integrating

function, trained for the role by the OE
Rogers and staff withdrew from product
development projects, become Resource
Allocation Team
Training for Rogers in more directive
management style
Intergroup laboratory meetings were arranged
for functional groups with worst relations
Change in accounting and control
Make marketing a profit center and the plants cost
centers
Get corporate to alter performance standard for EDP

IMPLEMENTATION ISSUES

Complaints about teams doing everything

Slowed down decision-making

Problems in accountability with decision-making

decentralized to teams
Frustration on the part of executive team

Complaints by other groups that Marketing was not up to

the job
Best people should lead regardless of area

Rogers commitment to the change program kept it on track

With training and experience, the teams became more
effective
Improved flow of new products
Improved relations among groups
E.g., scientists became business-oriented

Proposed changes in formal accounting/control

systems not implemented

Economy improved in 1994 and business picked up

Allentown Discussion
Congruence model says strategic problems are due to misalignment of the organizational archiecture
poor fit to strategy, environment; poor alignment among parts of organization.

Problem identification
Problem at gap between strategic goals and outcomes
First stage
Falling sales
Missing growth targets

Second stage
Slow product development insufficient new products
Poor service & delivery
Poor morale

Third stage
Conflict among functional groups around product development and service
Root problem: poor relations among functional groups.
This is a problem in formal organization. Formal organization is about grouping
and linking. Problem of linking or coordination and finding consistent
mechanisms

Strategy

Of corporation
Leverage capabilities in product development technologies relating to glass
and manufacturing
Maturing industries means mktg now the critical capability
Niche with defense department
EPD
Use capabilities in glass to get a foothold in consumer electronics and
telecommunication
Initially manufacturing, shift to marketing competence
New products small modifications
Lack of clarity, consensus on division goals
Relatively clear group goals

Environment
Corporation
Held to same performance standards as other divisions
Career tracks for EPD people
Strong culture of corporation
EPD decentralized less tied to corporation
Different environment, but same structure
Business conditions
Old (and still true for corporation)
Stable demand for products
Little pressure to develop products quickly
High margins
Low competition in their niche
New
Intense competition on price, quality, and delivery
Greater uncertainty
Short product life cycles
Fast product development cycles
Thin and declining margins

Is the stringent environment the cause of the problems? Or

simply increases the pressure to integrate and align.

Formal organization
Formal structure

How much differentiation?

How many groups? How interdependent?
Different cultures and goals of divisions
Physical proximity: PDs focus on process under plants. PDs relations
with Manufacturing is good. Mktg located elsewhere.
Mnfg slow, not risk-taking (more than usual)
Sales dispersed. Close a deal.

How much integration

Structural mechanisms:
1. Hierarchy
2. Meetings
3. There was the decentralization to plant level--liaison
Nonstructural:
Corporate culture

Marketing as de facto but not formal lead strategic function prod dev.
Power and status of manufacturing and product development
History & culture of corp
Manu as profit center
(former) decentralization of division

Formal systems
Control system (accounting): Measurement and appraisal
Manufacturing as profit center gives them club
Marketing as cost? center
Sales evaluated on volume; wants fast delivery to please clients.
People evaluated by functional bosses
Sales orientation of marketing

People
New management team brought on by Rogers
Questionable competence of marketing
Formerly people in sales
Mktg people questing competence of sales
Motivation of manufacturing people to rise in corporation
Mktg people unmotivated to be coordinators (Moss)
Rogers as division manager
A scientist, no a general manager
Contrast with Bennett who was an entrepreneur
Smart, may be able to learn
Overcame service problem
Took initiative consult Corporate OD
Informal Organization
Culture/networks
Poor alignment between culture of corp with EPD strategy & org
Weak in division, strong in corporation
Not risk-taking in corpor or division (due to Bennett?)
Top team not a cohesive or natural group

The product development process

Reciprocal interdependence but independent input, assess
viability of project.
Meetings as a coordination mechanisms
Rogers helpful but focused on technical issues; not mgt.
meetings in Allentown each acctg period to coordinate.