Institute of Management Development and Research

Organizational Design

Case Study – Shoe Corporation of Illinois

Group-VII

Submitted To: Submitted By:

Prof Vipra Tiwari Sharayu Wani

Saruabh Zulkantiwar 104

Tushar Bhadalkar 106

Introduction-

Shoe Corporation of Illinois (SCI) produces and sells women’s shoes for lower price

market range from $27.99 to $29.99.

Profit average from30 cents to 50 cents per pair has downsized to 25 to 30 cents per

pair due to increase in cost.

Produces approximately 12500 pairs per day.

SCI has two factories located :

One at Centerville which produces 4500 pairs per day

Another at meadow produces 8000 pairs per day.

SCI offers 100 to 120 different products.

Competitive strategy- Even very large shoe house International and Brown can

undercut prices charged by SCI due large volume of production and stable styled

shoes.

SCI recently created an Ecommerce department to be competitive and tried to

implement intranet and employees are resistant to changes.

Processes are quite rigid and not being change since many years.

The new shoe design launch includes a number of bureaucratic steps which slows

down the process and makes some employees to feel that the final approval is just a

snap judgment of the president.

The firm’s structure is vertical with centralized decision making and there exists some

serious employee or interdepartmental conflicts.

SCI as Organization –

I - Size of Org. & System

It is small-medium scale organization in comparison with International & Brown. An Open System which interacts with the environment for inputs socially and technically to fulfill its needs of resources, adopt changes and give desired outputs. Main focus is growth & resources acqusition.

II - Product-Focused Organization

It is a traditional plant-with-staff organization which has one or more plants (Centerville & Meadowvale) and wide groups of products and product lines (100 to 120).

PFO have high flexibility and innovation in products is priority than planning and control.

PFO is better suited to less complex organization structure and less capital investment organizations (technologies)

Product Based requires talented Mangers at middle and junior level (Lawson, Flynn, Paul Robbins, Freeman)

Corporate Level Staff has to look after the communication and co-ordination regarding – Purchasing, Design, Planning, to the plant workers & managers. (Lawson to Robbins)

III - Mechanical System Design It is clear from the case study that SCI has MSD which is shown in diagram – Vertical Structure – President, Directors, Managers, Plant Superintendent.Rigid Culture – Not Sharing Information with other departments, more inclined towards keeping control.Formal Systems – Order Placements, Manual Systems.Routine Tasks – Design & Approval, Stats for Color & Size, immediate production of new prototype

Challenges Faced in SCI –

Addition of new products to 100+ products causes the Sales Force to understand the

new product and the push it to the customers which is not case with big companies

with limited product range.

Employees unwilling to share information, they are unwilling to change and adopt

intranet for internal communication & coordination. There is no action based on

implementation of ERP or similar IT sys. (K.T.Olsen)

Product Design – Approval cycle time is long process takes and takes two weeks to a

month.

Statistician Mr. Martin Freeman process orders from sales force instead of Order

Clerk, bypassing the procedure because Mr.Fergusson delays 1-3 days to approve

order for production.

Lack or risk in implementing original designs suggested by teams which have proved

beneficial in terms of sales (John Flynn).

Project X & Y - President Allison approval on design has two aspects – a). He

approves without going into details or discussion. b) He disapproves without details

or discussion. In both the cases time & efforts are wasted.

Paul Robbins has to manage assembly lines on a short notice for new design. Old

orders are delayed, workers keep idle and becomes cost to company.

M.T. Lawson makes minor changes 5-6 times on new style products, this affects the

machine settings for production.

Learning Organizational – Carnegie Model

1. A coalition is an alliance formed among the managers and senior members of

all the concerned department to achieve organizational goals or problem

solving.

2. Managers Talk to each other and exchange information in order to get details

and different dimensions to the current scenario.

3. The procedures as well as rules and regulations are also discussed while

evaluating solutions.

4. Cost-Benefit analysis is done in order to find applicable solutions.

5. The final solution is chosen in such a way that it is incongruence with all their

departments.

In this case there are many issues which are resulting in inter departmental conflicts which can be resolved easily.

Challenge Design Approval Process can be changed for faster flow of information directly within organization.

Formation of Cross Functional team – for designing of product an cross functional

should be formed and implemented including

The above process can be minimized if the Stats Dept. works in coordination with

the Design Department in the first phase with the data. And the sales manager will

pass it on to the President.

Garbage Can ModelIt is similar to Carnegie Model but here solution is proposed only by the decision

maker. The team is dissolved immediately after the Problem/Need is Defined &

Potential Solutions are given.

Challenge: Implementation of ERP or similar IT sys has not been taken as positive step towards

organizational integration in terms of communication. This can be resolved as every

department will give their opinions and solutions for improving the same.

Design (Lawson)

President (Allison)

Sales Manager

Statistician

Lean Management – Lean manufacturing or process improvement teams are an integral part of any

operations team whether they exist as a separate entity or are composed of the

same operations managers and team members. Their objectives should be the

same, which is to achieve improvements in operations, business efficiency, and

achieve a competitive advantage across the supply chain.

These work teams have regular meetings to discuss new ideas and solutions to

current problems they face in their day-to-day jobs.

Challenge: It is difficult to manage assembly lines on a short notice for new design

production.

The design team will have weekly meeting with the shop floor teams in order for

them to understand what prototype is in approval process. The shop floor team will in

advance allocate resources for that particular job.

Design Team

ShopFloor Team