The Dow Corning Organization’s Structure Sample Assignment

Abstract

The current paper demonstrates the impact of organizational structure and managerial practices on business performance on the example of Dow Corning. Throughout its history, the company had varying degrees of success under functional, divisional, and matrix management systems. It continually adjusted its needs and operations, depending on the period and economic realities of business. Some of the identified factors that facilitated the organizational shift of the company were territorial expansion, increased scope of influence, contrasting demands in foreign and domestic markets, stages of business development, and external factors. Consequently, the paper investigates the reasons for Chapter 11 bankruptcy and potential methods to recover from it. Lastly, the essay addresses the current needs of business, including productive organizational culture, cultural strategy, and agile methods, which could significantly improve the company’s performance.

Introduction

Dow Corning is a pioneer in researching and synthesizing organosilicon materials with more than seventy years of development. Over its history, the company has undergone several shifts in the organizational structure associated with both rapid advancement and strategical miscalculations. Although Dow corporation is rightfully considered a leader in its field and continues to improve today, the company experienced significant problems in structure and manufacturing in the 20th century. Therefore, it is essential to thoroughly analyze the company’s history and establish the reasons for its successes and failures.

Organizational Structure Analysis

In 2000, Dow Corning strengthened its position as an innovation leader by implementing a global information platform. Growing demand for organosilicon materials worldwide allowed Dow Corning to build an industrial complex for the production of siloxanes in Asia (Dlabay et al., 2018). As a result, the business expansion globally allowed the organization to mitigate some of the previous mistakes and return to its position as the leading company in the industry. At the time, Dow corporation had a governing element in the form of a board of directors and the president of the company (Dlabay et al., 2018). In other words, the responsibilities in the organization were divided among employees and delegated according to competence. At the same time, the management of the corporation had a hierarchical structure, where the CEO & the president determined the critical vectors of the organizational development.

Main Factors of Organizational Structure Shifts (Question 1)

Nevertheless, the company has undergone several structure shifts throughout its history, and it is essential to conduct a thorough examination of its development. At the earlier stages of the company before the territorial expansion, the key component of the organization was a wide selection of manufactured products with an emphasis on one group of production, which reinforced customer loyalty. However, when the corporation grew to a larger scale, the management decided to change the management scheme, replacing it with a divisional one. Therefore, the two primary factors for replacing a functional system were the rapid territorial expansion and variety of production. These influences resemble the standard factors of organizational shift, with size and business development stage being the most influential ones.

Consequently, the company shifted to the matrix organizational structure associated with specialist functions and expanded to ten major business centers instead of five. This change was associated with increasing territorial scope of influence and contrast in the demand between foreign and domestic markets. Therefore, the company needed another organizational shift that would allow various business strategies, depending on the production demand, which is another common influence of structural change. Furthermore, the matrix system would improve the overall coordination of organizational units and increase the speed of response to potential challenges. Ultimately, considering the six common influences, Dow Corning primarily concerned only internal factors, such as expansion, deficiency of organization, and conflicting production. At the same time, external factors, such as technological, social, and political changes affected the company to a lesser extent.

Problems of Matrix Organization (Question 2)

As mentioned briefly before, the number of control elements increased while the quality of operations decreased, implying the matrix organizational structure problems. Dow Corning achieved international success created by authority; however, customers faced numerous delays and challenges (Tool, 2019). After all, the matrix structure accelerates the turnover of staff, which, in turn, implies employees’ dissatisfaction with their management (Morris & Oldroyd, 2020). Furthermore, staff turnover makes it necessary to devote more time and resources to training and searching for new specialists (Morris & Oldroyd, 2020). It led to further escalation of the conflict, with managers being accused of exceeding their authority.

Furthermore, bureaucracy is one of the significant drawbacks of the matrix organizational structure. At this point in the company’s history, there was a surplus of managers, which led to an extensive number of mistakes due to the human factor. The company’s operations were ineffective, with some tasks contradicting each other, large amounts of managerial confusion, and abundant bureaucracy. Consequently, the matrix structure significantly reduced the level of competitiveness of Dow Corning. The critical advantage of the company was a wide selection of products, implying that it was necessary to introduce more new product lines. In turn, the bureaucracy interfered with this development since any production processes ceased to be autonomous. The operations became vastly dependent on documentation and management (Morris & Oldroyd, 2020). These drawbacks could be minimized by transparent assignment of responsibilities, simplification of management, creating a sense of a “strong” matrix via teambuilding, and assigning more autonomy to employees. Ultimately, while the organization’s overall development was still improving, there were significant problems with some components of the matrix organizational structure.

Bankruptcy Recovery and Solutions for the Future (Question 3)

Due to the scandal with silicone breast implants, the company filed for Chapter 11 bankruptcy. One of the potential methods to aid its recovery is implementing the Six Sigma system that increases the efficiency of management and divides responsibilities evenly and competently among employees (Chakraborty et al., 2020). In other words, it might be beneficial to recover the divisional structure, but it should be modernized and adapted to the new economic realities. Furthermore, the Dow Corporation is an established company in the industry; therefore, it is possible to mitigate the problem of re-adjusting to the market (Shahani, 2020). Ultimately, while the lawsuits pose a significant problem to the company, it is possible to recover from bankruptcy via intelligent management strategies.

Cultural Strategy

Furthermore, it is necessary to implement the cultural strategy in the corporation. Dow Corning’s critical resource is its employees, whose interests must be respected. In order to increase the retention rate, the company should adjust salaries and working conditions (Morris & Oldroyd, 2020). In contemporary business, the employees’ satisfaction with the organizational culture, company’s objectives, HR policies, and other associated factors directly relates to the productivity of the unit (Morris & Oldroyd, 2020). Moreover, it might be beneficial to considere the factor of emotional burnout, which is caused by overtime and a negative atmosphere in the workplace. From these considerations, the equal distribution of responsibilities will be a critical instrument to eliminate the main personnel problems and establish a productive organizational culture.

Agile Solutions

Continuing on the topic of cultural strategy, it is essential to adhere to agile solutions of organizational change. In other words, the company needs to maintain a high level of flexibility and ensure a high response speed to emerging challenges (Brosseau et al., 2019). Agile solutions also imply an innovative approach to leadership styles, talent management, team processes, and other factors that contribute to enhancing organizational culture (Brosseau et al., 2019). In other words, collaboration and transparency represent the core values of the agile approach, which could potentially mitigate the major challenges of Dow Corning with the matrix organizational system. As mentioned briefly before, teambuilding and improvement of employees’ satisfaction might solve the existing problems. Ultimately, while these methods were relatively rare in the 20th century, contemporary businesses require agile solutions.

Conclusion

Dow Corning is a niche leader with a substantial reputation and a lengthy history. Although the company’s start was highly successful, the ineffective decisions of incompetent managers led the company to decline. As presented in the analysis, an incorrect management structure and the development of excessive bureaucracy led the corporation to bankruptcy. The company survived the crisis due to its public image and organizational structure shift, demonstrating that it is essential to adhere to contemporary business standards and adjust accordingly. Ultimately, the analysis revealed the utmost significance of organizational structure and its impact on the company’s business performance.

References

Brosseau, D., Ebrahim, S., Handscomb, C., & Thaker, S. (2019). The journey to an agile organization. McKinsey & Company. Web.

Chakraborty, A., Antony, J. & Sreedharan, R. V. (Eds.). (2020). Lean Six sigma for higher education: Research and practice. World Scientific Publishing Company.

Dlabay, L., Burrow, J. L. & Kleindl, B. (2018). Principles of business updated. Cengage Learning.

Morris, S., & Oldroyd, J. (2020). International business. Wiley.

Tool, M. R. (2019). Evolutionary economics. Taylor & Francis.

Shahani, J. (2020). Limits and opportunities of a matrix organization: A study of coordination mechanisms within a multiple brand organization. Springer Fachmedien Wiesbaden.

Expenditures For Pensions, Social Welfare, And Military

If I were to choose between cutting expenditures for pensions, social welfare, and the military, I would not hesitate to choose the latter. It is no mystery that the U.S. military budget is the biggest in the world with a significant margin, even despite the absence of imminent global threats. There are many influential factors in this regard, for example, the military balance in the world and modern warfare peculiarities. The world nowadays is not the world as it was in the 20th century. The arms race no longer has justified reasons to be continued, while military alliances like NATO allow for a more flexible distribution of war power. Moreover, it became highly doubtful for a world war to occur since modern wars now happen mainly in the economical and informational fields.

In my opinion, raising taxes would be as bad as cutting pensions and welfare expenditures. The perfect example showcasing why it is highly undesirable is Germany, or, rather, the Weimar Republic in between the World wars. It had a large national debt due to numerous loans and war reparations. When the Great Depression hit, it caused chaos in the economical and financial areas of Germans’ lives. To address it, the Weimar government undertook several measures in the form of fiscal austerity, which implies severe tax raises and expenditure cuts. In doing so, the government lost the trust of all population classes (taxes concern the wealthy, welfare expenditures concern the poor). In a time of disarray, the population was ready to support anyone who at least somehow resembled stability and prosperity. Unfortunately, it was the Nazis who managed to take control of the situation.

While I do believe that government should reevaluate its spending, I do not find the Democratic course the most appropriate in the given situation. If the government does not raise taxes or cut expenditures, it can already be considered helping. I believe that instead of increasing benefits for the unemployed, the government should address the issue of unemployment by creating job positions. In addition, it is crucial to ensure the creation of both high-skilled and low-skilled jobs since many people simply do not have a chance or time to devote to education. If enough job supply is accessible to all population classes, the situation will already begin to look brighter.

Selecting Effective Employees: Employees Management

Nowadays, most companies employ a complicated job interview structure, which sometimes includes provocative or irrelevant questions and tasks to test applicants’ communication or decision-making skills. Naturally, it contributes to selecting exceptional candidates; however, many people still miss the job opportunities with top-tier skill sets and backgrounds. Overall, it poses a question of how to effectively select employees out of myriad candidates without rejecting promising applicants.

Undoubtedly, the failure of modern hiring systems requires appropriate solutions that will provide all candidates with equal chances during job interviews. Jason Shen (2017), for instance, suggests “expanding employers’ search” to not miss applicants that are not suitable based on the standard criteria, such as work experience in leading companies or degrees from prestigious educational establishments (02:56-03:07). I believe that such an improvement may be worth considering for businesses as they could select people with great potential who managed to acquire an exceptional skill set on their own, which shows their persistence and desire for self-development. Furthermore, showcasing candidates’ abilities during job interviews is an excellent suggestion, considering that recruiters may experience the applicants’ skills themselves and estimate whether their approaches suit the company (Shen, 2017). Shen (2017) also provides a practical example of why employers should not job applicants just by their resumes, race, or experience; therefore, I agree that it is unreasonable to reject candidates without at least attempting to understand their talent and potential. By and whole, the aforementioned suggestions could indeed drastically transform outdated hiring systems and provide candidates with equity during interviews.

Additionally, the employers tend to wrongly estimate the candidates’ abilities as they seek the typical characteristics: work experience and credentials, which ultimately leads to most applicants being rejected. However, Jason Shen (2017) encourages HRs to hire candidates without misinterpreting the aforementioned aspects with ability and competence and instead give opportunities to people who genuinely deserve it because of their hard work and persistence. Therefore, implementing the developments mentioned by Jason Shen could assist organizations in seeking new faces that can transform their company positively and ultimately lead to success. By and large, it is even more effective to employ such a hiring system as employers would be able to select people with great potential and motivation to develop their skills and abilities to help companies strive along with them.

Reference

Shen, J. (2017). Looking for a job? Highlight your ability, not your experience [Video]. TED Talks. Web.

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