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Dyncorp case study
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| Words: 551 | Submitted: 10-Jun-2013
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DescriptionIt's HBS case study of organizational behavior class.
THE CASE OF DYNACORP
The Dyna Corporation (Dynacorp) operates global information and communication systems. Dynacorp became the industry leader in 1960ís and 1970ís by producing the technological innovations. Dynacorp was known as a company whose products were innovative and high-quality. Thatís why, Dynacorp grew rapidly and spreaded to international markets in that period. In 1990ís, the industry and market changed, Dynacorp couldnít recognize the changes in the market and handle the high-costs. Dynacorpís competitors closed the technology gap, even they were faster and more innovative than Dynacorp about new markets and products. Dynacorp lost the leadership of the industry.
The CEO and some executives believed that the main problem was Dynacorpís organizational structure. Dynacorp was designed as a functional organization since it was founded. There were three line divisions: engineering (organized by technical area), manufacturing (organized by location) and marketing (organized by geography). The CEO assigned an small internal task force. The task force determined a lot of problems in Dynacorp and looked for what was causing them and on how to fix them. The task force interviewed all divisions. The all divisions were aware of the problems but they was blaming continuously each other. The task force focused on eventually the alternative organizational structures. The task force introduced five organizational models to The CEO: product division structure, customer division structure, functional/product matrix, front/back and functional structure with stronger linking mechanism.
Even if it has some weakness, comparing with the other alternatives, the product division structure is the best model for Dynacorp. Dynacorp has three problems; high cost, slow pace of getting new products to market and the need to generate value-added services for customers made the company vulnerable.
Because the product division structure creates the transparency of performance, costs and profits of each product is clearer than the functional structure. Each division performance will be monitored closely and the costs or profits of each product will be clear for the Dynacorp management. Thus, with the product division structure, Dynacorp can control and reduce the high costs. In addition, product division structure provides the managers the clear strategic focus. Thus, the managers can know how to manage and direct their employees to the companyís goals. When the managers has the clear strategic focus and manage their employees in line this focus, Dynacorp can meet the value-added demands of customers. On the other hand, one of the reason of these problems is that the devisions donít understand each other. At the product division structure, the people in the group perform a variety of different task such as engineering, manufacturing, and marketing. Because the people who have different background work together and understand each other, they will focus ...
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