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Case Study Unit 6
Strategy Implementation at Dell Computer
Presenters: Group 4
Instructor: Mr. Ngo Quy Nham
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Contents
Theoretical Framework and
Case Summary
Dell’s organizational structures in each period of time
Reasons for Dell’s decision to move to different kinds of
organization structure
Dell’s performance has been improved
The ways that Dell tries to increase its performance
and those of Apple and HP
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General Concepts
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Work Specialization & Departmentalization
• Work Specialization: The degree to which tasks in the
organization are divided into separate jobs with each step
completed by a different person
• Departmentalization: 5 types
Functional
Product
Geographic
Process
Customer
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Chain of command & Span of control
• Chain of command: The continuous line of authority
that extends from upper levels of an organization to the lowest
levels of the organization and clarifies who reports to who
• Span of control: The number of employees who can be
effectively and efficiently supervised by a manager.
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Other key factors
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Organizational Design Decisions
Mechanistic Organization Organic Organization
A rigid and tightly controlled Highly flexible and adaptable
Definition structure structure
• High specialization • Cross-Functional Teams
• Rigid departmentalization • Cross-Hierarchical Teams
• Clear chain of command • Free Flow of Information
Characteristics
• Narrow spans of control • Wide Spans of Control
• Centralization • Decentralization
• High formalization • Low Formalization
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Factors influence structural decisions
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Traditional Organizational Designs
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Contemporary Organizational Designs
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Case Summary
Strategy Implementation at Dell Computer
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SUMMARY
In 1993 Late 1990s
Manage and change Dell’s organizational
He recruited Michael Dell then
structure, control system, and culture. executives from IBM
changed his
and Compaq and
created functional company to a
structure market structure
Dell Computer’s cost-
conscious culture is an In the 2000s
He had paid more
important factor affecting At the age of 19 attention to the
Michael Dell supervised internet to
its competitive advantage three employees customize its
assembling computer approach to best
over the threat from its and two others taking meet each group’s
order over the phone. specific needs
competitors cost-savings over the internet
moves
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Dell’s Organizational Structure
in each period of time
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Initial time
Michael Dell single-handedly supervising five employees
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By 1993
CEO
Michael Dell
Human
Manufacturing Marketing Finance R&D
Resources
Department Department Department Department
Department
Manager Manager Manager Manager
Manager
Staffs Staffs Staffs Staffs Staffs
In order to keep pace with the demand for computers and manage the company’s growth,
Michael Dell formed a functional structure. It can be seen that the management hierarchy
at this time became taller and have more levels.
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By the late 1990s:
CEO
Michael Dell
Home Buyer Government and Educational
Business Divison
Division State Agencies Organization
Manager
Manager Manager Manager
Staffs Staffs Staffs Staffs
Dell changed his company to a market structure, which means each
kind of customers are served by a self-contained division
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In the 2000s: Dell has combined customer structure with divisional
structure to meet the changing customers and coordinate its growing activities.
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Reasons for Dell’s decision
to move to different kinds of organization structure
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Moving to different kinds of organizational structures over time help
adjust the business itselt to fit with the change in the environment.
Small business Bigger business:
Handled the business Functional structure
single-handedly and hire with taller hierarchy
only 5 people to help him
Change in customers’
Customer structure need and pressure
Applied with more
fragmented markets and
from competitors:
wider range of products Combination between
customer structure and
Divisional structure.
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Dell’s performance has been improved
thanks to its change in organization structure
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DELL ON FORBES LISTS
#4 America’s Largest Private Companies (2016)
#100 World’s Most Valuable Brands (2014)
#205 Global 2000 (2013)
• #143 in Sales
• #241 in Profit
• #482 in Assets
• #380 in Market value
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Outsource employees in India
Economize the expense for staff
compared with those in the U.S
Create functional structure
Lean organizational structure to
reduce cost
Fragment specific groups of customer
Improve competitive advantage by
knowing tastes and needs of
customers thoroughly
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The ways that Dell tries to increase its
performance and those of Apple and HP
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How Dell has been trying to increase its performance:
Its changes in Innovation on the
organizational structure assembly floor
(mentioned in above grouped workers together around
questions) a workstation to assemble PCs
following customer specifications
Reducing reliance on Improving its
direct sales customer service:
by selling through retail provided personalized
channels and remote services for
customers.
Announcing a campaign Locating its
called "Dell 2.0" manufacturing plants
close to such regional
reducing the number of
markets
employees and diversifying
the company's products
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How Apple
tries to increase its performance
Innovative Business Models
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Its Design Process
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Its Innovation System
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Innovative Partnerships
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Venture Acquisitions
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How HP
Tries to increase its performance:
Develop HP Labs,
Solved their
the research arm
Inventory Issues
of HP
New type of
Offer managed Social Responsibility
corporate culture
services has earned
which was to
recognition of
be called "the
its work in the
HP way."
area of data
privacy and
security
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