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A Case For Restructuring An Organization

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Sarang Bhutada
Sarang Bhutada

TARDEC is the US Army's center for tank and automotive research and development. It underwent a major restructuring in 1989 to address issues as a declining organization. The restructuring involved transitioning to a matrix structure with decentralized teams to increase flexibility, innovation, and decision making. This delayering process transformed the organization from a mechanistic to an organic structure suited for its environment of rapid technological change.

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A study of a defense organization -TARDEC Sarang Bhutada DoMS, IIT Madras [email_address]
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Customers Suppliers Government/ Fed Agencies Competitors Armed Forces Auto Industry Academia International Markets Demographic, cultural and social forces Economic Forces Technological Forces Political Forces Specific Environment General Environment TARDEC
 
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Corporate Level Strategies Business Level Strategies Functional Level Strategies ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
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[object Object],*Source: J Woodward, Industrial Organization: Theory and Practice. London: Oxford University Press, 1965 Levels in the hierarchy Span of Control of CEO Span of Control of team leader Structure of organization Type of structure Ideal Small Batch and Unit Tech* 3 4 20 Relatively flat, with a narrow span of control Organic Before Delayering 8 6 4 Tall Mechanistic After Delayering 3-4 5 NA Relatively flat, with a narrow span of control Organic
[object Object],Cease dependence on mass inspection to achieve quality. Quality should be a team responsibility. Break down barriers between departments. Put everyone in the company to work to accomplish the transformation Benchmark the organization against the best in industry. Alternatively, set benchmarks for industry to follow. End the practice of awarding business on price tag alone. Instead, minimize total cost
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Mechanistic Organizational Structure Organic Low Environmental Uncertainty High Mechanistic Structure Simple Structure Low Differentiation Low Integration Centralized decision making Standardization Organic Structure Complex Structure High Differentiation High Integration Decentralized decision making Mutual Adjustment TARDEC before Delayering TARDEC after Delayering
[object Object],[object Object],Openness Confrontation Trust Authenticity Proactivity Autonomy Collaboration Experimentation Effect of Delayering
[object Object],Before Delayering After Delayering People vs. Organization Organization Centric People Centric Control vs. Flexibility Control Flexibility Means vs. Ends Ends Means
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A Case For Restructuring An Organization

  • 1. A study of a defense organization -TARDEC Sarang Bhutada DoMS, IIT Madras [email_address]
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  • 7. Customers Suppliers Government/ Fed Agencies Competitors Armed Forces Auto Industry Academia International Markets Demographic, cultural and social forces Economic Forces Technological Forces Political Forces Specific Environment General Environment TARDEC
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  • 20. Mechanistic Organizational Structure Organic Low Environmental Uncertainty High Mechanistic Structure Simple Structure Low Differentiation Low Integration Centralized decision making Standardization Organic Structure Complex Structure High Differentiation High Integration Decentralized decision making Mutual Adjustment TARDEC before Delayering TARDEC after Delayering
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