Org Theory

Acme's organization structure is rigid but efficient. The president and its top management team are the ones making decisions. Once a decision is made, it was hard for subordinate to challenge or alter it. The system worked well for standard procedure with little variation. However, in a changing environment, the system may hit its wall. That explains why Acme did not spot the contractor's design error, and failed to assemble and ship products on time.

On the other hand, Omega Electronics was really decentralized, and its communication was rich and informal. The decision-making was not controlled by top management. Instead, everyone had opportunities to participate and their inputs were well taken. That culture helped the company employees to find the design error in the contractor's initial blueprint. Although its system did not work so efficiently as the Acme's in many cases, it worked better in a changing environment shown in this case.

To Acme's president, I would advise him to leave some decision-making rights to others. After all, one person won't know everything. Group wisdom is usually wiser than individual's. This is particularly important since we are in a fast technology development era.

To Omega's president, I would advise him to become a little more centralized in command. The current organization structure and management style worked well. However, once the company grows to a bigger size, more hieratical organization and communication approach may fit better for its business.

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