Read Case Study 2.4 (The Widgets ‘R Us case study is a case with a problem of ho
ID: 396567 • Letter: R
Question
Read Case Study 2.4
(The Widgets ‘R Us case study is a case with a problem of how the company is set up and how the company will handle operations with its projected growth. (Widgets ’R Us (WRU) is a medium-sized firm specializing in the design and manufacturing of quality widgets. The market for widgets has been stable. Historically, WRU has had a functional organization design with four departments: accounting, sales, production, and engineering. This design has served the company well, and it has been able to compete by being the low-priced company in the industry. In the past three years, the demand for widgets has exploded. New widgets are constantly being developed to feed the public’s seemingly insatiable demand. The average life cycle of a newly released widget is 12–15 months. Unfortunately, WRU is finding itself unable to compete successfully in this new, dynamic market. The CEO has noted a number of problems. Products are slow to market. Many new innovations have passed right by WRU because the company was slow to pick up signs from the marketplace that they were coming. Internal communication is very poor. Lots of information gets kicked “upstairs,” and no one seems to know what happens to it. Department heads constantly blame other department heads for the problems.)
What structural design changes might be undertaken to improve the operations at the company?
Explanation / Answer
The functional organization of widgets R Us has helped the company remain stable but it does not help it to be innovative and fast moving. In order to gain compitative edge in the new fast-paced widget market, the company should try to change its organization to a matrix or pure project structure. This would allow the company to more quickly develop innovative products which is important to gain a compitative advantage in a market with short product life cycles.
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