The Paradoxical Twins: Acme and Omega Electronics

The Paradoxical Twins: Acme and Omega Electronics

After reading the case of the "Paradoxical Twins Acme and Omega Electronics", I found Both Acme and Omega produce similar products and offer similar services. Acme president John Tyler is a very tough going individual and he is portrayed to be an autocratic individual because there is one way communication in Acme. The case provides an opportunity to evaluate both Acme and Omega's organization structure of a business. Both companies used to have the same organizational structure but after they were sold to different investors, as a consequence of this, each company has its own procedures and company polices. Following are the some facts about both the company mentioned in the case after they became the separate business entity.

Acme retained original management and promoted GM to president. They have well defined organizational structure and decisions are often taken by top management without consulting manufacturing department. And they have well defined job responsibilities and authority.

Omega hired new president and upgraded several existing personnel within plant. They don't have organizational structure and they believe that Organizational chart seems like artificial barrier. They have participative management style of leadership and they don't have well defined job specification (job authority and responsibility)

Q. No. 1 Which firm should have won the final contract - Acme or Omega? Discuss.

The paradoxical twins describes two organizations, Acme and Omega Electronics that are competing for the same contract for manufacturing a memory unit to be used in a photocopier. Omega, having an organic structure, wins the race because they are able to produce higher quality memory unit. On the other hand, Acme having mechanistic structure seems less competent and less reliable because of its low quality memory unit which they are unable to produce in time and some of its prototypes fail to work. Omega even corrects a design error in the original blueprint, which improves product quality. But, both the company is given half the order, and they were encouraged to find the way to reduce the cost and Acme takes advantage of this opportunity to experiment to find ways to reduce its costs, whereas Omega does not. Finally Acme discovers the way to reduce the cost by 20% and they own the contract. Omega may have won the battle, but Acme has won the war because its mechanistic structure fosters a concern for technical efficiency and cost reduction in what is a routine manufacturing environment. In this particular case, Acme decides to run a "tight ship" (mechanistic structure) in order to increase productivity and efficiency, and to decrease costs. The advantage of this strategy is that they can undersell their competition (Omega) by selling at a lower cost. Omega, on the other hand, is nearly too opposite. They run a more organic structure, which relies heavily upon communication, delegation and teamwork. This strategy allows Omega to effectively compete with Acme by stressing reliability and by placing emphasis on quality.

Omega's decentralized, organic approach allowed for the building of prototypes 10 days faster than Acme, correction of errors, and a highly reliable prototype--much more reliable than Acme's, which had a 10 percent failure rate. Omega was more effective when evaluated by these criteria, although Acme's prices were lower than Omega's because of that Acme won the competition and which was fair result in my opinion. Its mechanistic structure provided it with the management system and incentives needed to improve and reduce its manufacturing process, so that Acme won the final race over Omega.

Q. No. 2 Describe each firm's structure especially the author's explanation of organic and mechanistic structures.

Acme's organizational design takes the form of a mechanistic structure. The term mechanistic structure is used to describe an organizational structure that is designed to induce employees to behave in predictable, accountable ways."(George & Jones, 2005, p. 508). All of the employees working in a mechanistic structure have assigned duties that they must perform and are prohibited to take on additional duties unless they are told so by management. The internal organization is characterized by rules, procedures, and a clear hierarchy of authority. Decision making authority in the Acme is centralized in the top level management and they have top down approach for the communication. All communication flows from the top to bottom and there is clearly defined job description (i.e. authority and responsibility associated with each job). He makes his managers run the organization with strict control, or as he phase it, a "tight ship." The president does what he wants because all the decision-making power is in his hand (centralized). Acme has a very detailed organization charts and job descriptions. This is because Tyler believes that everyone should have clear responsibilities and narrowly defined jobs. Finally, there is vertical communication in the company. Departments don't interact or talk with each other. All the information flows from top management down to lower management and employees. If Tyler wants to communicate to the company about changes or demands, he writes memos that he passes down to his upper management, which passes it down to lower management and maybe eventually down to the employees.

Omega, on the other hand, has completely different organization structure than that of Acme. It has organic structure and the internal organization is characterized by "looser, free-flowing, and adaptive." The term organic structure is used to describe an organizational structure that is designed to promote flexibility so that employees can initiate change and adapt quickly to changing conditions" (George & Jones, 2005, p. 508). This flexible structure is more like a team environment in which all the employees are able to handle any of the tasks.

There are no clearly defined rules and regulations and there is no clearly defined hierarchy