Rose Co. Harvard Case Solution & Analysis

Rose Company

Situation Analysis

The Rose Company is trying to practice a major strategy, which is to change from a centralized structure of manufacturing organization to a decentralized structure, in which the activities will be coordinated by the general manager at the actual production sight that is the Jackson Plant. Rose Company will build a new plant, where new procedures, processes and methods can be implemented. The heads of the departments will not be reporting to their functional counterparts but they will be under the leadership of the plant’s general manager.Therefore, the major concern for Rose Company in this case is the implementation of the strategy and not its evaluation.

There are various concerns that must be taken into account when implementing a defined strategy by the general manager. I will be dealing with a set of changed relationships to make a decentralized structure to function properly. There is a potential threat of constraints and barriers inside the company even with the new policies placed according to the current strategy. I am a new person at the Jackson plant and this is my first assignment in a major line job. My implementation skills will determine the success or failure of the strategy and a number of analytic, administrative and leadership skills are required to develop this implementation.

The change management requires proper measurement and strategy in order to improve and motivate the people to achieve the goals of the company. The changes required at Rose Company are urgent but need to be taken at a medium pace instead of slow or fast because record of Jackson plant has not been satisfactory for several years, and a medium paced strategy will enable to identify and address potential issues as they arise. To improve the performance of the plant; cost reduction and quality improvement of products is required to maintain competitive leadership and product advantage.

Problem Identification

Changes in the Organizational Structure

As the general manager, I have control over all functions and personnel at the Jackson plant, except sales. Instructions issued from the headquarter by the vice presidents of manufacturing, production planning, quality control, industrial relations, and the other functions will go to the Jackson plant through me. Problems will arise, if executives insist on maintaining a dotted-line relationship with their functional counterparts at the Jackson plant because cross functional relationships presented by dotted lines usually creates ambiguity within the structure. Connecting individual employees with dotted lines to functional vice presidents can result in confusion over who can direct the employees’ tasks.

Management Control System

Although, it is not clearly specified, but the logic follows that the new Jackson plant can be considered as a cost center, which incurs cost but does not generate profits. That is why performance will be measured by my division’s ability to reduce production costs while still maintaining quality. Managers who do not agree with my decisions know that they can easily escalate concerns to top, whether or not it is reasonable. After all, there is no clear management control system in place yet. This will result in dysfunctional behavior of managers and each of them will work for their own department rather than working for the company as a whole.

Power and Politics

From the point of view of the Jackson plant personnel, I possess formal or borrowed power, which is power that was given to me by top management (Timm L. Kainen). My lack of experience in managing people and seemingly abrupt entry into the dynamics of the plant may pose some problems in the dynamics between me and my managers. Commitment to an individual with formal power is less likely to develop as opposed to one with reward power; one that has the ability to administer to another the things that he or she desires or to remove or decrease things that he or she does not desire.  In this case, Rose Company’s vice presidents have this power even if I determine the rewards that they deserve to receive.

We have to consider that prior to the changes at the Jackson plant, all of the Rose Company plants operated without a general manager. In addition, now the managers at the Jackson plant may feel that some power is taken away from them because of me. A natural initial reaction to such drastic changes is resistance and dotted-line relationships that only increase the likelihood of active resistance.

Alternative Solutions

Defining dotted-line reporting

The new organization structure presented in exhibit 2 suggests the dotted line relationship between plant employees and home office executives. The maintenance of the dotted line relationship between VPs at the head office and counterpart functional managers at the plant needs to be defined including the nature of this dotted relationship, and to what extent is the reporting required in this relationship. Proper standard operating procedures must be designed and implemented at the plant otherwise there is a risk of bypassing my decisions and continuing with the old ways. VPs at the head office should ....................

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Accounting appointed executive director of the plant, its first major "line" function. The plant will operate on a decentralized basis, in contrast to other plans of the company. Administrative problems are expected. "Hide
by Edmund P. lessons Ralph M. Hauer Source: Harvard Business School 3 pages. Publication Date: March 1, 1953. Prod. #: 453002-PDF-ENG

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