BUAD 304 Final Case Study
Assignment #2 Agem Electronics: Analyzing their
Organizational Structure Issue
By Kristen Rodgers, EJ Kim, Stanley Choi,
Jong We, Yuk Ying Chan, SzuChing Lan, Chi
Kit Chau April 19, 2012
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Kristen Rodgers, EJ Kim, Stanley Choi, Jong We, Yuk Ying Chan, SzuChing Lan, Chi Kit
Chau
BUAD 304
4/19/13
Final Case Study Project The Agem Electronic Corporation, specifically the instrument assembly team in the
Phoenix, Arizona plant used to be a lowperforming, inefficient branch whose production was down and unpredictable. The arrival of Larry Fisher, manager of the assembly department, seemed to have resolved this issue, dramatically improving the instrument team’s performance.
However, upon analyzing the casewriter’s review, we believe there is still a fundamental flaw in
Agem Electronics: no organizational structure. Organizational structure is the way in which job tasks are formally divided, grouped and coordinated. Looking at Agem Electronics, there appears to be no formal leadership, cohesive work environment, task specialization or no real hierarchical structural overall. With that in mind, here are the three causes of this overriding issue, and three proposed solutions which we believe will bring an organizational structure to
Agem Electronics. One apparent cause of the problem in the Agem Electronics Corporation’s structure is lack of specialization and departmentalization. Work specialization is how organization’s tasks are divided into separate jobs. Departmentalization is how these separated jobs in specialization are grouped together according to their likeliness. Both specialization and departmentalization allow increase in production rate and therefore efficiency. Agem Electronics Corporation employees falsely believed that they were being efficient by specializing in one task and meeting the production deadline. Contrastingly, the employees were inefficient for exactly not
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specializing. While it is true that Larry Fisher’s team improved in efficiency since Fisher came to his position, the team can be described as inefficient when viewed from the whole corporation’s perspective on future. While employees described themselves as being specialized, each employee was knowledgeable in at least two tasks in case another employee had to call out sick or for other reasons. However, this caused problems in main production as well as time utilization. Alan Glassman, for example, worked in Room A by himself but also assisted in various production operations since his assignment in Room A did not keep him busy all the time. By Glassman helping others in production, other employees rushed him at times to help them when he would actually have his main job in Room A. In another incident, Betty explains how one part that is made by different people do not perfectly line up as she does her job of putting these smaller instruments together. In addition to these examples of lack of specialization causing delay in production, lack of departmentalization also causes problem. Production team is supposed to be only producing; however, in Fisher’s team, employees were producing, detecting defectives, fixing the problems, and testing the finished products. While there was a separate team of engineers in the Agem Electronics Corporation, the assembly team trusted themselves more than the engineers to fix and test the products. As Sue Mohrman attested as an outsider of the company, it makes no sense that people who make the products also test them for defection.
This lack of departmentalization not only slows the team down by causing them to do more than their main jobs, most importantly, they are risking the company’s reputation. What the production team declares as perfect product as a result of their testing in reality may still have some serious defects and/or smaller problems. When these defective
