OD assignment

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Introduction
The main aim of this paper is as an
organizational development practitioner :
 Study the case of Steinway & Sons
Musical Instruments manufacturer
Company.
 Diagnose the case
 To apply appropriate organizational
development interventions

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Short story of the case
Steinway & Sons is the piano division of
the Steinway Musical Instruments
Company, Founded in1853 by the
Steinway family.
The firm was sold to different companies
in different years. The manufacturing
plants are in New York and Germany.

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Overall Environment Of The Sector
 The piano market is typically segmented into
grand pianos and upright pianos.
 In 1995, the upright pianos sold 11times than grand
pianos.
 customers can also be segmented into two
 1) private (professional artists & amateur pianists)
 2) Institutional customers (con-cert halls,
universities, and music schools)
The upright piano and the grand piano more
purchased by private customers compared to
Institutional customers.

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 The traditional piano sector challenged by :
increased electronic keyboard sales
ups and downs of the global economy
 As a result,
 Competition in the piano industry has also
changed.
 it forced In the United States, several
hundred piano makers at the turn of the
century had consolidated to eight by 1992

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Global and Local competitor
companies of Steinway’s
 The Baldwin Piano and Organ Company is Steinway’s
primary U.S. competitor. It offers pianos through a
network of over 700 dealers. Similarly, Steinway & Sons
offers several different pianos including handcrafts sell
through more than 200 independent dealers in New York
and Germany.
 Bösendorfer of Austria and Fazioli of Italy remain as
legitimate Steinway competitors.
 Several Asian companies collectively held about 80% of
the grand piano market in terms of units and 75% of
global sales in 1995.
 Yamaha is the world’s largest piano manufacturer through continuous and
consistent piano quality improvement.

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Internal Operation of Steinway &
Sons Company
 Two years are required to make a Steinway grand as opposed
to a mass-produced piano that takes only about 20 days.
 There are three major steps in the production process:
1. wood- drying (which takes about a year),
2. parts making and
3. piano making.
 in the processes of making grand piano Steinways follows
100% inspection.
 in the drying process, the workers reject approximately 50%
of the defect.

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In 2002
Retaining workers has proved increasingly
difficult.
well-trained Steinway craftspeople are
coveted by other manufacturers.
Observed weak sales and excess inventories.

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Overview of Organization-Level
Diagnosis for the case
 The organization level of analysis is the broadest systems
perspective typically taken in diagnostic activities.
 The organization organizes itself within an environment to achieve a
specific results.
A model for diagnosing a system at organizational level

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Diagnosis of the inputs in relation
to Steinway & Sons
 General Environment
Politically
Steinway is a global company must respect countries trade code
and laws.
Socially
an important part of a country’s artistic culture & the fine arts.
Technologically
Aware of breakthroughs but preferred the classic method

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Ecologically
 Steinway must be mindful
 Environmentalists would express concerns over their
wasteful trend of lumber
Together, these environmental forces paint a relatively
moderate level of uncertainty and not very complex
environment.

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Task Environment
The threat of entry is fairly low
 Strong brand names and dealer networks make it
extremely difficult for new entrants
The threat of substitute products is moderate
 Electronic keyboards have made considerable
advancements to replace grand and upright pianos.
• sophisticated nature of many of the artists & audiences
suggests that there are not many substitutes for a concert
grand piano.
Porter Five Force is used

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The bargaining power of suppliers, such as providers
of labor and raw materials, is high.
 Labor union has much sought-after craft workers and
lumber suppliers exert significant influence
The bargaining power of buyers varies by segment
 High end segment the number of buyers are small and
hence customer can put pressure.
 In the middle and lower end customers are scattered
and unlikely to exert influence.

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The rivalry among firms is severe.
 A number of well-known and well-funded
domestic and international competitors exist
powerful buyers and suppliers as well as keen
competition make the piano industry only
moderately attractive
Overall, Steinway executives’ perceptions of the
general and task environments seem to be
accurate

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Company’s Strategy
 Core strategy is differentiation & a sophisticated
niche. Offer unique and high-quality product to
sophisticated artists
 No formal mission or goals are mentioned
this makes it somewhat difficult to judge the
effectiveness of the strategy.
 It seems reasonable to assume a clear intent to
maintain its dominance in the high-end segment.

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The designing components
 Steinway’s core technology
 is highly uncertain and moderately interdependent. The
manufacturing process is craft-based and dependent on the
nature of the materials. The major steps in the process are
not closely linked in time.
 The corporate structure
is divisional (pianos and band instruments), the key functions
are manufacturing, distribution, and sales.
 Management processes
are focused on the production system, Critical to quality and
100% inspection is in place
 There must be some system of keeping track of work-in-
progress, finished goods, and concert bank inventories

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 The human resources system is highly developed
 reward system
 compensation,
 benefits, and
 training programs.
• Culture
 Concert bank systems and long history of family influence all
point to a culture of quality, craftsmanship, and
responsiveness
 These values are manifested in raw material selection, care
in the production process, and the image it works to retain

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Alignment of Steinway’s inputs and
designing components
 The fit between the environmental inputs and the
strategy
intends to differentiate its product by serving the
high-end segment with unique high-quality pianos
Steinway’s moderate product line breadth gives it
some flexibility and efficiency
 In general, the alignment between Steinway’s
environment and its strategy looks sound.

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The alignment of the design
components to support the strategy
 There appears to be a good fit between Steinway’s
strategy and the organization design components.
 flexible structure, formal inspection systems, and
responsive culture seem well suited for that purpose.
 Steinway’s technology appears aligned with its
structure.
 The production process is craft-based and deliberately
not standardized

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OD interventions
Increasing the clarity of Steinway’s strategy.
Formalization of strategy rather than changing it
is necessary; because
the culture would likely resist strategy change
Steinway could focus on better coordinating its
structure, measurement systems, and human
resources systems
To codify and retain key production knowledge in
case workers do leave

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