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Success Factors M&a

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Institute of Management Development and Research, Pune.

Cases in Organization Design

Case 1

Keeping Things Organic At Ben & Jerry’s

Submitted By :-                                                                 Submitted To :-

GROUP - 2                                                                          Prof. Vipra Tiwari

Simran Boparai (87)

Madhura Chilka (88)

Trupti Gagan (89)

Ayushi Goyal (90)

Satyam Gomasta (91)

Harpreet Kaur (95)

Bhawna Mahajan(98)

Pooja Mundhekar(100)

Executive Summary:

This case talks about an ice-cream parlor known as Ben and Jerry’s which was opened in summers of 1978’s.The goal was to make super premium ice-cream and have fun doing it.

In the Next 10 years company grew into a 45$ million company with 150 employees working but as the organization grew, the culture of the organization began to change as they were losing emphasis on fun charity and goodwill towards the fellow workers.

In 1978 and 1986, The Company doubled its size and there were increase in the competitors in the market. In 1987 it saw a slowdown of around 40% and the company realized that they need growth if they need to survive.

So to cope up with the scenario they hired a chief operating officer which was MBA, as he started doing changes in the processes the pressure increased and employees began to complain. Overall case depicts how structural changes impact the culture.

Questions and Answers:

Q.3 Is Ben and Jerry’s original culture hindering the organization’s effectiveness?

Ans3. Before the expansion of their organization, the culture that was followed in the company was “Clan Culture” The culture was “family” like which emphasized on subordination of goals and objectives. There were two way communications in the structure. The employees were allowed to wear comfortable clothes which were the elements of a social organization that cares about its employees and participation. Organizational structure was decentralized. They had emphasis on including their employees in staff meetings. Company would rely on all employees to participate in company’s decision making.

However with increased pressure of growth and expansion, company had to shift focus from family oriented business environment to the more competitive environment. This led to the cultural changes. Due to this, company started finding it difficult to remain compatible with its old culture.

Reasons and instances from the case which indicates that the culture was hindering their effectiveness:

  • As now, the structure has become “Centralized” therefore the monthly staff meetings, involvement of employees is now nowhere. The information flow is now limited to only the top management.
  • There was stress among the employees because the production goals were so high and also numerous approvals are required before coming to any decision. The main reason was they are growing to sustain in the competitive environment. This leads to major changes in the work culture, organization’s structure, procedures and policies.
  •  With the changes in the work culture like the employees now have to wear Shirts with tie, the communication is now impersonal, the salary structure is also changed, all these events is happening because the employees are not ready for this massive change in the functioning of the organization.
  • Changes in the workings lead the employees disinterest in any decision that is being made without their participation.
  • Top managers are complaining of their salary, the policy is being blamed. This clearly depicts that their culture is no longer “family” type and this is affecting the effectiveness of the organization.

Q5. What type of Structure did Ben & Jerry’s have in its early years? Today? What factors bought these changes?

Ben and Jerry’s culture in

Early years

Ben and Jerry’s culture

Today

  • Focus on social change than just a profit making organization
  • Managers wearing jeans, t-shirts
  • Restricted salaries of executives
  • Employee participation in decision making
  • Hiring socially deprived or physically challenged class
  • Profit sharing for socially responsible community causes
  • Environment where employees were having fun while working

  • Focus on growth attributing to cultural changes
  • Managers wearing ties
  • High pressure of increasing executives’ salary as per market standards
  • Hiring of MBA executives
  • Increased levels of approvals
  • Lack of employee participation in decision making
  • Inclusion of competitive tools in work such as promotions, cost controls
  • Environment of malaise, stress while meeting goals

Thus earlier culture prevalent at Ben & Jerry’s, depicts the characteristics of  “Clan corporate culture” which is a culture that embraces a family-like or tribe-like environment, values consensus and commonality of values and goals.  This type of culture often puts mentoring programs in place to foster employer engagement and loyalty. Clan culture are more collaborative and the least competitive in nature.

  • Clan culture leads to “Organic” model of organization design.

There are 2 types of generic organization design i.e Organic and mechanistic

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