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ACTIVITY # 1: CASE STUDY 1: THE SUPPLY CHAIN DIVISION OF SUPERIOR
MODULE ELECTRONICS, INC
Activity #1: Case Study 1: The Supply Chain Division Of Superior Module Electronics, Inc.
MAN-701-AP1
Diego Alvarez
Suyin Escalante
Nicolo Dallomo
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St. Thomas University
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ACTIVITY # 1: CASE STUDY 1: THE SUPPLY CHAIN DIVISION OF SUPERIOR
MODULE ELECTRONICS, INC
Use the Star model to identify each point of the start in the case. Give examples of each
point (Diego Alvarez)
Strategy
Strategy is the first set of policies to be tackled in the Star Model. Strategy defines the direction
of the organization. It is important to tackle strategy first because any organizational form we
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end up with will involve compromise, so by setting the strategy first it enables us to make the
right compromises.
Example:
“Carl recently called in a consulting team to understand the reason behind the department
problems.” He provided the consulting team with the current organizational chart for the division
and recommended that they hold personal conversations with each leader. Excerpts from the
interviews with the members of the leadership team are included to explain their perspective
about the problems that the supply chain division is experiencing.
This example confirms that the CEO of the organization after realizing that his organization had
problems in different departments, he decided to put a strategy in place that was to hire a
consulting group to analyze and conclude which is the exact problem of his organization. In the
same way, the CEO has already determined the problem that exists in the organization, but with
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the consulting team he would confirm the exact problem and have an external feedback that
would help to make a better decision to improve the departments in the organization and have
better results in the organization.
People
These policies relate to how people are recruited, rotated and trained etc. to ensure the
organization has the talent to follow the strategic direction in an efficient manner.
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ACTIVITY # 1: CASE STUDY 1: THE SUPPLY CHAIN DIVISION OF SUPERIOR
MODULE ELECTRONICS, INC
Example:
“I have a bunch of weak managers reporting to me. They bring all of their problems to me rather
than sorting them out among themselves. The problem is that they’re not working together
effectively; there are problems in the attitudes of people. When I go around meeting members of
the team, they just don’t seem to have any bigger aspirations or commitment. They don’t seem
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amped up or energized.”
This example confirms that the organization is structured in departments and that each work
team has a leader who is a manager. The problem is that the managers are not committed to the
organization, the managers are aware that the problem exists they do not make the decision to
solve the problem. There are people who belong to work teams. But they are not the right people
to play the role of the position in which they are.
Process
Process policies determine the flow of information and decisions in the organization. We can
tradeoff between processes which are vertical (budgeting and planning) and lateral (collaboration
based).
Example:
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“The Manufacturing plan is published every day at p.m. when Louis’s team is leaving for the
day. Jacob’s team works until 8 p.m., and then my team comes in and works until 6 a.m. A
“planning day” is measured at 6 a.m.”
This example confirms that there is a process in the manufacturing department. Workers must
follow a process or plan so that product development can be accomplished. The case does not
mention exactly the processes in the departments. The case focuses on the problems that the
organization has but does not specify the processes that departments have.
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ACTIVITY # 1: CASE STUDY 1: THE SUPPLY CHAIN DIVISION OF SUPERIOR
MODULE ELECTRONICS, INC
Rewards
Reward related polices aim to ensure that the goals of the employee are aligned with
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organization. This provides motivation to employees to move the organization towards the
strategic goal.
Example:
“As an incentive to negotiate better rates with our suppliers, my team is compensated with a
bonus based on supplier performance, specifically their cost. It is a simple formula: for every
percentage decrease in cost, my team gets an equivalent salary bonus. A ten percent reduction in
supplier cost is a 10 percent annual bonus.”
This example confirms that one of the departments of the organization exists a type of reward for
production. It cannot be determined if it is the ideal reward for the department, but at least the
manager motivate the workers by giving them a reward.
Structure
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Structural policies determine the location of decision making power. Structural policies can be
divided into four areas:
Example:
The organization is divided into six departments. In other words, the organization has an
organized structure. The departments are: Supplier Contracts, Manufacturing (Night and Day
Shift), Warehousing and Shipping, Advanced Manufacturing and Planning Project Management
office.
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ACTIVITY # 1: CASE STUDY 1: THE SUPPLY CHAIN DIVISION OF SUPERIOR
MODULE ELECTRONICS, INC
This example confirms that there is an organized structure. But managers are not adequate to
lead the departments. There is a lack of communication between departments and there is a lack
of interest and identification with the organization.
Work your way around the STAR and evaluate the design according to each section of the
Star. How would you evaluate how each point of the star is consistent or inconsistent with
the other elements of the Star? (Suyin Escalante)
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Superior Module Electronics had always set out to differentiate itself from competition by
providing customers with the utmost highest quality products and equipment. The company was
founded over 50yrs and took pride in the company’s investment into research and development.
Thus, allowing them to be one highest performing company in its industry. Their strategy was
divided into fractions, one being the business strategy and the second is the organization strategy
which includes the guiding principles and values of the company. The core of its company was
laid around its mission and vision which are included in the organization strategy. This acts as a
pillar around which the rest of the design is formulated.
The overall structure of the company represents how people are organized. Superior Module
Electronics (SME) clearly defines the roles of its team leaders along with their responsibilities.
Along with defined roles, SME has created a guideline of how relationships are determined.
Example would be that it is not appropriate for the head of planning to address the senior vice
president directly without consulting with their manager first. The processes and lateral
capabilities in SME are inconsistent with the rest of its elements. Many departments within SME
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are not working together and overall show a lack of lateral activities. This issue doesn’t allow the
flow of information and decision making to spread cohesively.
Furthermore, there is inconsistency in the company’s reward system. Rewards are implemented
in order to the align the company’s goal and promote individual performance. The last section of
the STAR design which involves people practices. In this organization, it is required to have
highly skilled managers involved in leadership teams in order to run effectively. SME has
managed to acquire individuals who understand the complex nature of the business, therefore,
people practices can be said to be consistent with the other elements of the organizational design.
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ACTIVITY # 1: CASE STUDY 1: THE SUPPLY CHAIN DIVISION OF SUPERIOR
MODULE ELECTRONICS, INC
Propose any improvements or changes to any of the points of the star that you find to be
inconsistent. What Star model points would you change, and why? (Nicolo Dallomo)
The first improvement would be to make a new recruitment plan for new managers that can
better lead the departments. The organization could not have motivated employees that could
produce in the best way in the organization. The fidelity and engagement with the organization is
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very important.
The lack of communication in the organization is a serious problem that must be attacked in a
factory. If the departments are not constantly in communication, production problems are
generated immediately. Senior management should impose that meetings be held at least once a
week of cross function between departments. This type of meetings would help to improve the
production of the departments. Within the organizations the communication must be intruded in
each and every one of the activities of each collaborator, as well as, it is something that concerns
all departments and areas of the organization. Without communication within the organization,
many of the processes would be affected and problems would arise that could affect the
organization. On the other hand, regardless of whether the communication is efficient there are
many barriers that can be reached that affect the content of the messages that are issued.
Communication within organizations is a key element for development and success. Most
activities and processes are first planned and then executed, receiving the information correctly
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favors the organization in the sense that the orders are captured clearly and the activities are
carried out with a high degree of efficiency. This helps the organization generate greater
productivity and helps strengthen the relationships between its employees and can motivate
themselves.
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ACTIVITY # 1: CASE STUDY 1: THE SUPPLY CHAIN DIVISION OF SUPERIOR
MODULE ELECTRONICS, INC
Reference:
Donald L. Anderson Donald (2019). Organization Design: Creating Strategic & Agile
Organizations. Case Study 1: The Supply Chain Division of Superior Module Electronics, Inc.
Gailbraith, J, Downey, D., & Kates, A. (2002). Designing dynamic organizations: A hands-on
guide for leaders at all levels. New York.
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Kates, A., & Galbraith, J. R. (2007). Designing your organization: Using the STAR model to
solve 5 critical design challenges (1st ed.).
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