Voltamp Electrical Corporation Harvard Case Solution & Analysis

Questions

1. Do you really think that Voltamp needed to be reorganized into decentralized, autonomous product divisions? Explain.

2. A potentially destructive competitive (internally) environment exists at Voltamp. Clearly, the Magnetic Materials Section and the Audio Product Sections do not agree with the other's current position.

A. Identify and describe the nature of this problem. Be sure to explicitly reveal the position of both product groups.

B. Is there anything Voltamp could or should have done to prevent the competitive disagreement, or, is it only logical that decentralized (SBU’s) will have such problems? Is internal competition a good thing? Explain.

3. A. Do you think Carter and Grant will resolve their differences by themselves? Why or Why not? Explain. Be sure to read between the lines of the case. Should Carter and Grant resolve this problem primarily by them?

B. Who (Carter or Grant) do you think has made the best overall argument in the case and why? Again, be sure to read between the lines of the case.

C. How do you think the conflict should be resolved? Clearly indicate how you think "TGW" should be handled and who should take charge of it. Be sure to be thorough in providing a multifaceted solution. Note, you should be trying to provide a solution that would get support from both Carter and Grant by thinking in terms of what it would take to get both to reach an agreement. Identify the compromises both individuals would need to make.

D. If entrepreneurial and creative activities are viewed as very important by Voltamp's top management, what actions need to be taken now to ensure such activities will be pursued by the various strategic business units (SBUs) and their employees at Voltamp?

Question 1

Yes, the Voltamp Electrical Corporation needed to be reorganized into a decentralized structure and autonomous product divisions because it helps the company to expand its business and make it easier for the company to grow. It is an organizational form of freedom and it will help the company to gain better business and grow faster. Secondly with a decentralized structure in the company; there are fewer layers of bureaucracy that enables the company to make instant decisions, which is very important in a highly competitive atmosphere. Thirdly, it encourages creativity, motivation and allows several minds to work at the same time on the similar trouble.

As the company had centralized structure, hence, this limited the efficiency of the current operations of the company that caused many problems for the company in order to expand its business. The operating decisions required too much time with a centralized structure so they implemented a decentralization structure policy due to the troubles in business expansion. During the implementation of this policy, the company separated itself in 14 divisions and each division had been headed by an executive vice president and section manager. The employee turnover reduced with the decentralized structure as the employees who had given more power tend to continue with the company for a longer period of time.

It will facilitate growth as well as diversification of the products and make the operation of the business more flexible. It promotes the autonomy, initiatives and creativity of the subordinates. With a decentralized structure, there will not as much requirements for middle managers as numerous workers can report to fewer managers that reduces overhead costs. The operational autonomy makes it easier for the business to raise overall. Lastly in a decentralized structure, power and decision authority can free up the top management of the company to pay more focus on the big picture problems rather than focusing on to the small issues at the sub-unit levels.

Question 2

Part A

The main problem that existed between the two sections is discussed in the case. According to this case, there is an uncertainty between the managers of the magnetic material section and Audio product section in deciding how they can best exploit the newly exposed magnet as TGW was much dominant and inexpensive than normal magnet so it could be proved economically advantageous. Another problem that existed between the magnetic material section and Audio product section in deciding, which section should produce the TGW. The magnetic materials section only had the authority to sell the magnets to the customers outside company. On the other side, Audio Products Section is responsible for determining the best basis of supply for its component parts. It is also held accountable for this decision in terms of the best interest of the overall company.

Mr. Carter and Mr. Grant, the managers of Audio product section and the magnetic material section both were looking logically at this problem from the point of view of what was best for their individual respective sections instead of focusing on their opinions of what was best for the Voltamp Electrical Corporation. Because of the decentralized company ......................

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