AllentownEssay Preview: AllentownReport this essayProblems faced by Allentown –Problems due to Internal Factors –Organization Structure —In general terms, the organizational structure of the Electronic Products Division of Allentown follows the same structure of the other divisions. Under the General Manager there is a controller, a product development manager, a manufacturing manager (with three plants treated as three different profit centers), a sales manager and a marketing manager. The last two may be the major difference regarding the general structure of the company, since sales and marketing are usually combined in one single department. The breakdown in two departments has been made by the general manager, reasoning that the sales division should be concerned about short-term actions, while the marketing one should take care of pricing policies and strategic plan.
[Table of Contents]
In general, a number of common problems exist, which we will describe in detail later; namely, the organization structure of Allentown, a specific product development and packaging manager, and the ability of internal management to ensure that any product-related issue is addressed with respect to a specific individual unit (e.g., that all products are shipped without any defects/impurities, etc.).
An obvious issue for a product development manager to deal with is the responsibility for getting a product ready for use by a customer, which is probably not something he will be able to accomplish without a product (a problem for a management team to deal with, since the product will not be ready all at a given time). An internal management review can be helpful in providing the best decision-making process for a product development manager, since they are usually required to perform this review every time a product is released and reorganized, but not only to do this. The problem with a product marketing manager is that the internal review should not be necessary for a product to be ready, especially since, if a product was not ready all at once, that’s what’s really causing the issues.
The general rule is for an individual product development manager to evaluate, in a highly structured format as possible, current market conditions to determine if the product is ready to launch. The overall design design of our new products should consist of a highly modular, highly interconnected project structure that should allow for a flexible, multi-tasking approach to product management decisions. There are many reasons why this approach might have drawbacks:
Product development managers are not trained in the principles and processes of product development.
Because all product development work is subject to management guidance, there is less time with the product.
With the advent of technology, the product management structure of all the companies has been gradually simplified. For the first time, internal management organizations and sales and marketing organizations are used to perform product marketing, instead of in the physical office or with a computer. Moreover, due to the fact that not having a physical production office is still a difficult task, the sales and marketing team is given less and less time with their own individual work.
Companies are more aware at the time of these early phases of product development that customers are still very early learners in new technology.
As the marketing process is not very complex and users only need to understand each product, it may not be that important for some management to follow internal practices. But as the marketing organizational structure changes, there is increasing pressure to adapt the design to new customers.
If you are considering product development and management, you should prepare for these three factors, and remember to understand them, to make the decision to move ahead with product creation, and to always take into account the importance of the customer experience and the product itself.
A key point that we mentioned first in our presentation in which we discussed how to make this decision, is that in order to become a CEO and continue to succeed, the individual needs to be able to maintain high levels of trust between the teams, making sure that they are well-equipped for a changing company environment. This means providing staff with quality, effective management for multiple responsibilities, and ensuring that everyone is focused on the main objective.
One main thing that we want to highlight for you in this analysis is that internal and external management must work together to keep the team to a high standard, in order to attract and retain the highest quality employees.
One reason for this is that there
However, this vision generates an overlapping problem between the marketing department and the product development department. The marketing department, among other duties, is responsible for the identification of new opportunities and also to assure the development of new products. Unless these activities are extremely well coordinated with the product development department, there will be misalignment in the strategy of the EPD. Ultimately, this misalignment will affect a third department, i.e. the manufacturing department, since it is directly involved in the product development process.
The organizational design, especially the particularity mentioned above, is generating a considerable amount of tension. There is a constant exchange of accusations between the two departments; marketing is critical to the product development department’s responsiveness, its time-to-market and its priorities. The counter-part was in the form of heavy critics regarding the understanding of the product development process. The constant tension only increased the rivalry and the distance between the two departments, while both should have been working as close as possible.
There is no surprise that this kind of internal dispute is taking place at EDP. The composition of both departments is a good example of the problem that the separation is causing, since the profile of the employees is considerably different. The marketing department is mainly a spin-off of the sales department; most of its employees are sales people and are more used to understand the market instead of product development process itself. As a vicious cycle, this leads to a lower level of trust, less interaction and higher distance among them.
Communication and Trust –Allentown’s EDP department faces a slow down in its sales and profit margins not only due to external factors, but also internal. The current organizational structure demands highly interdependent and collective work in order to cope with the increasingly competitive environment. This means that the main drive for growth is exploration and exploitation of innovative products that will be delivered on time and will ensure the specifications and quality needed from the clients, which can only be achieved through constant information flow and harmonic cooperation between the departments.
Rogers made the move of separating Sales and Marketing, which was made due to external and technical reasons, but failed to address the rapid changes that the industry is undergoing. Miscommunication between the two departments failed to effectively service the increasing demands of key clients, resulting in dissatisfied customers who would easily switch to substitutes in the competitive marketplace. Mutual mistrust between these two departments, also Manufacturing and Product Development, lead to failure in understanding the next products that would make the difference and boost sales and in turn profits. Signals from the market and the clients would be bootlegged in either of these departments with clients being ultimately neglected.
Moreover, plant managers were evaluated based on their profits without actually having any influence in price making, when the actual price makers, the Marketing department, were not being evaluated on marginal profits but on revenues. This misalignment of objectives was even more reinforced from the fact that the company was always more R&D and manufacturing focused, having a comparatively weak marketing and sales department. In turn, further lack of confidence and communication hindered the necessary quick response needed for the market and therefore technology development. In general, apart from the mistrust being created between the departments (because their evaluation criteria were contradicting), the expected growth and profit were not in line with the business and there was no possibility of active cost cutting and control.
Problems due to External Factors —In the early 1990’s though the commercial markets for the Electronics Products Division products was growing, buyers were becoming more price sensitive. This prompted increased and often fierce competition among a number of component suppliers. As suppliers competed for large-volume contracts from major OEM’s, prices fell sharply, putting pressure on costs.
In addition, there was continual pressure on component manufacturers to extend existing product lines as OEM’s developed new end-use products for their growing products. Thus added to the price competition for large contracts was a need to respond to customers with new product extensions that met their unique specifications. A component manufacturer could not bid on a contract until its product had passed rigorous tests conducted in its own and the customer’s laboratories. Responding to customer needs with new product extensions was a competitive necessity because new products commanded higher prices in their early stages of development and thereby offered an opportunity for growth.
Competition was primarily hinged on price but quality and service was becoming important now. Customers were giving special consideration to manufacturers that could assure short delivery lead times (usually no more than four weeks) while efficiency in manufacturing operations demanded longer lead times. Stricter quality standards were also being demanded because poor quality often shut down an OEM production operation.
Suggested Corrective Actions —Re-implement the Management and Organization Developmental Program to complete the final phase which addresses interfunctional