The Horizontal Corporation It was clear to Mike O’Reilly, president and CEO of Pemberton Lighting that the organizational structure of Pemberton was no longer serving the needs of the company. Pemberton, manufacturer of lamps and lighting fixtures, had developed a hierarchical structure over the years as sales grew and the workforce expanded. The organization had been structured according to specialized functions, creating “silos of excellence”. Pemberton had multiple layers of management and a formal chain of command. The organization’s ability to adapt quickly to change was severely constrained because most key decisions required managerial approval. The hierarchy had become deeply entrenched. Mike was concerned that the structure was no longer appropriate in the increasingly competitive lighting market. The past few years has seen major changes in the lighting indusfry. Inexpensive lamps and lighting fixtures were being imported from Pacific Rim countries, and energy-efficient halogen lighting was becoming an increasingly popular alternative. Mike knew that Pemberton would have to respond to these pressures if it wanted to remain a viable competitor in the lighting industry. After studying the organization for several months, Mike realized that several functional departnents had limited interactions. Frictions between departments (for example, between marketing and sales and believe engineering and manufacturing) had occasionally been intense and had kept the organization from operating smoothly. Mike wondered if a new organizational structure might be in order. After reading several articles on horizontal corporations, Mike and his executive team developed a plan to restructure the organization around the key processes. ASDGRJUKey processes such as new product development, sales, and customer support, were identified and specific performance goals defined for each. Because the lighting market had become very competitive, Mike and his team decided that Pemberton should adopt a customer orientation. Therefore, performance goals were defined in terms of customer satisfaction. According to the plan, teams of functional specialists would work on a given key process toward established performance goals. Following the redesign, teams of employees from different functions would be responsible for every stage of their key process. The multidisciplinary teams would be empowered to make decisions without supervisor input, thereby reducing the chain of command and flattening the organization’s hierarchy. To provide better service, teams would meet regularly with suppliers and customers to learn more about their needs and constraints. The plan looked good on paper, but Mike was concerned about it’s implementation. On his desk was the 150 page plan book that he and his executive team had prepared. They had nicknamed it “the roadmap” because it outlined how Pemberton would proceed from it’s present vertical structure to desired horizontal structure. The restructuring process was to begin in six (6) weeks. But first, Mike and his executive team had to share the entire plan with everyone in the organization. The first meeting to unveil the new structure to upper and middle management was about to begin. With a sigh of both excitement and hesitation, Mike grabbed the roadmap and headed for the conference room. a) Using the elements of design, and relevant OB theory explain the likely impact that the change in organizational structure will have on Organizational Behaviour at Pemberton Lighting. b) What transformational leadership style should be applied in order to achieve the desired result to expand and change the organizational structure. c) As a business solutions consultant, provide advice to the organization’s top management on what should be done within the organization to ensure that the change in organization structure does not impact negatively on productivity and organizational effectiveness. d) What kind of leadership is good to apply for organizational change that will lessen the resistance.(briefly) e) Your opinion in structural change of such an organization. Also explain what kind of stress the employees could face in such a situations and what steps could be taken to prevent the conflict


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