CASE STUDY
: From the view of organization theories to
study the Yubright Company
Course: Organization
theory and management
By: Dr. Gary G. Hu
Student name: 涂昱銘
Student ID: N924010020
Date: 2004-01-03(Semester=92-1/ NSYSU)
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Index
1.
2.
3.
4.
5.
6.
Abstract
Main theories & concepts review
Introduction of the company
Analysis & discussions
Conclusion
Reference
2
1. Abstract
This study ( report) is based on the course
“ Organization theories & management” by Dr. Hu
at NSYSU-Taiwan in semester 92-1 (2003~2004). The
major textbook is “Organization Theory &
Design,8th. ed.”, 2004, Richard L. Daft, published
by South-Western, a division of Thomson Learning,
Ohio.
This paper is following the basic theories
& concepts’ structure of this book to study and
analysis the following mentioned company. The
main purposes are; (1) trying to find the advantage
& disadvantage of this company by the tools of this
book & course, (2) trying to examine how matching
are these organization theories with this
company’s practices, and (3) discussing and try
to provide the advisement/ suggestion to this
company to improve its performance.
Please note that all relevant theories are
mainly come from the above mentioned textbook and
supplements by Dr. Hu in the course. And all
relative data of this company are strictly come
from the author with reliable sources of the top
management.
2. Main theories & concepts review
In Daft’s book’s structure, he initially
views from the organizational purpose & structure
design, including the strategy and effectiveness,
then illustrates the external factors ( open
3
system design elements) & internal factors
( internal design elements) which influence and
impact the organizations, finally he also
interprets the managing dynamic processes,
including the culture, innovation & change,
decision making, conflicts, power and politics.
Hereby below are the review of the key terms,
concepts, theories & models;
2.1 Organization design
Organizational dimensions fall into two
parts; structure & contextual. Structure
dimensions provide labels to describe the
internal characteristics of organization, they
create a basis for measuring and comparing
organizations, they are formalization,
specialization, hierarchy of authority,
centralization, professionalism & personnel
ratios. Whereas the contextual dimensions
characterize the whole organization, including
the size, technology, environment, culture, goals
and strategy, they describe the organizational
setting that influences and shapes the structural
dimensions.
2.2 Assessing the organizational
effectiveness
The contingency approaches to measuring
effectiveness focus on different parts of the
organization, depended at which parts of the
organization managers consider most important to
measure; (1) The goal approach to organizational
effectiveness is concerned with the output side
of and weather the organization achieves its goals
in terms of desired level of output. (2) The
resource-based approach assesses effectiveness
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by observing the beginning of the process and
evaluating whether the organization effectively
obtains resources necessary for high performance.
(3) The internal process approach looks at
internal activities and assesses effectiveness by
indicators of internal health & efficiency.
However, Robert Quinn & John Rohrbaugh
combined the diverse indicators of performance
used by managers & researchers, which conduct the
“ a spatial model of effectiveness criteria”. This
model is with 2 value dimension as Focus ( internal
& external) and Structure ( flexibility & control),
then conduct to 4 approaches to organizational
effectiveness with different emphasis and goals,
they are open system emphasis, rational goal
emphasis, internal process emphasis and human
relations emphasis.
2.3 Group behavior model by S.P. Robbins
External
Conditions
Imposed
On the
group
Group
Member
resources
Group
Struc
-ture
Group task
Gro
up
Pro
ces
s
Perfor
-mance
& satis
-fac
-tion
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2.4 Environmental uncertainty & organization
response
Daft tried to explain how the ways environmental
uncertainty influences organizational
characteristics; the CHANGE and COMPLEXITY
dimensions are combined and illustrate 4 levels of
uncertainty. The low uncertainty environment is
simple & stable, organizations in this environment
have few departments and a mechanistic structure. In
a low-moderate uncertainty environment, more
departments are needed along with more integrated
roles to coordinate the departments, some planning
may occur. Environments that are high-moderate
uncertainty are unstable but simple, the
organizational structure is organic and
decentralized, planning is emphasized and managers
are quick to make internal changes as needed. The high
uncertainty environment is both complex & unstable
and is the most difficult environment from a
management perspective, organizations are large and
with many departments, but organic; a large number
of management personnel are assigned to coordinate
and integration, it uses boundary spanning, planning,
& forecasting to enable a high-speed response to
environment changes.
2.5 Inter-organizational relationship
From the framework model, the relationships among
organizations can be characterized by whether the
organizations are dissimilar or similar and whether
the relationships are competitive or cooperative.
The first perspective is called resource dependence,
which describes rational ways organizations deal
with each other to reduce dependence on the
environment. The 2nd. perspective is about
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collaborative networks, wherein organizations allow
themselves to become dependent on other
organizations to increase value & productivity for
both. The 3rd. perspective is population ecology,
which examines how new organizations fill niches
leftopen by established organizations, and how a rich
variety of new organizational forms benefits society.
The last approach is called institutionalism which
explains why & how organizations legitimate
themselves in the larger environment and design
structures by borrowing ideas from each other.
2.6 Core technology
Technology refers to the works process,
techniques, machines and actions used to
transform organizational inputs (materials,
information, ideas) into outputs ( products &
services). The core technology is that which are
directly related to organization’s mission. The
non-core technology are which also important to
organization but not directly related to its
primary mission.
2.7 Department Technologies Framework
From Charles Perrow’s Department Technologies
Framework, he specified 2 dimensions of
departmental activities which were relevant to
organization structure and process; variety ( the
frequency of unexpected evens occur in conversion
process) & analyzability ( the degree of work can
be reduced to mechanical steps, for further
following & problem solving purpose.) This
results 4 major categories of technology; routine
(low-variety + high-analyzability), non-routine
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( high-variety + low-analyzability), craft
( low-variety + low-analyzability) & engineering
( high-variety + high-analyzability).
2.8 Interdependence
James Thompson (1967) defined 3 types of the
interdependence ( the extend to which departments
depend on each other for resources or materials
to accomplish their tasks) that influence
organization structure; pooled interdependence/
mediating technology (work does not flow between
units, each department work independently, the
coordination is low, and the task is
standardization), sequential interdependence/
long-linked technology ( one’s output became
another’s input, the coordination is medium and
task tends to be planning.) & reciprocal
interdependence/ intensive technology ( A’s
output became B’s input, but it again back to
became the input of A, the coordination is high,
task tends to be mutual adjustment.).
2.9 IT & Knowledge management
KM is a new way to think about organizing and sharing
an organization’s intellectual & creative resources.
It refers to the efforts to systematically find,
organize, and make available a company’s
intellectual capital and to foster a culture of
continuous learning and knowledge sharing so that the
organizational activities built on what is already
known. The company’s intellectual capital is the sum
of its knowledge, experience, understanding,
relationships, processes, innovations &
discoveries.
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A primary goal for IT system today is to support
efforts to manage and leverage organization
knowledge.
If we put the management level from first line
( operational, past, programmed) to top ( strategy,
plans, non-programmed), and system complexity from
low to high, we may find the evolution of IT
application to be (1) Operations  (2) Decision
making & control  (3) Strategy weapon.
2.10 Organization size
The large companies are with the advantage of the
economic of scale, global reachable, stable market
which creates the organization men. Contrary, the
small companies are with advantage of the rapid
response, flexible, simple, organic and niche
finding which conducts the entrepreneurs. Jack welch
provide a good thinking by Big/Small company Hybrid
which might be a new solution for this paradox.
2.11 Life cycle
Robert E. Quinn & Kim Cameron ( 1983) lead the concept
of the organization life cycle, providing a model of
organization evolution by Entrepreneur stage 
Collectivity stage  Formalization stage 
Elaboration stage, together with the stagerial
emphasis and relevant crisis.
2.12 Max Weber/ Bureaucracy
Max Weber predicted the triumph of bureaucracy
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because of its ability to ensure more efficient
functioning of organization in both business and
government settings. He also lead six dimensions of
bureaucracy and three legitimate bases of authority.
2.13 William Ouchi/ Control strategies
William Ouchi suggested three control strategies
that organization could adopt, they are bureaucracy
control, market control and clan control.
3.Introduction of the company
3.1 Company name: Yubright Co., Ltd. (DBU,
registered in Taiwan.) & Yubright Overseas
Corp. (OBU, registered in British Virgin
Islands.)
3.2 Capital: NT$10,000,000
3.3 Established: 1977
3.4 Business activity: Exported wide range of
electronic components & parts to more than 32
countries. Acted as trading company, buying
and selling both passive & active components,
also acted as OEM factory, layout tooling,
PCBs & customized parts…,etc via
subcontractors, semi-assembling works for
cable assemblies.., and so on. Customers
including manufacturers, wholesalers,
retailers and some government bids in the
third world countries. Promotion tools
including international exhibitions ( at
least 4 in a year, for instance Taitronic
Taipei, Electronicasia H.K., Electronika,
Munich,..,etc.)
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, web as well as the 26 year well reputation.
3.5 Number of employee: 12
3.6 Revenue of 2002: USD3.28 millions
4.Analysis & discussions
4.1 Measuring the 6 structural dimensions of the
company
Note: We didn’t use the score ( 1~10) as the
textbook but instead with “high” – “middle” –
“low” or some proper adjectives to state and
analysis the various dimensions, because
there is not any available scale, population
norm, nor scoring formula to quantify.
4.1.1 Formalization: As this company has its
own employee manual, operation manual
for various tasks, standard form files
as well as the quality manual, but still
not cover all jobs, thus we state middle
for this dimension.
4.1.2 Specialization: This company trends to
be low specialization because the
number of employee is quite little and
most of the employee are deployed to at
least 2 or more of the different jobs
which were overlapping with the others.
For examples, the sales department is
also in charge of the procurement works,
the logistic staffs have to support the
warehousing & quality assurance
works,…,etc.
4.1.3 Hierarchy of authority: There is only
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one general manager and one sales
manager in this company, so this
organization is quite “flat”, of course
this is also because of its size is
small. Thus we state this company
trends to be flat organization. ( Again,
small size is also a important reason
for this.)
4.1.4 Centralization: There are only 2
management persons in this company as
described earlier, but the decision
makings are mostly done by these 2
persons. Therefore we state this
company to be a centralization
organization.
4.1.5 Professionalism: There is only one time
per week, for approximately 20 minutes
lecture. The content is including
product specification, sales skill and
some critical operation notes. There is
not formal education or training
program, but only the random and loose
lectures by the managers in the last 20
minutes of the routine weekly meeting.
So it is in low professional training
& education.
4.1.6 Personnel ratio: In the total 12
persons of this company, there is one
general manager, 7 in sales &
procurement department ( including one
manager), one in finance dept., 2 in
logistic dept., and one in quality
assurance dept. So the ratios are:
1/12 (top management), 7/12 (sales &
procurement), 2/12 ( logistics), 1/12
12
( finance) and 1/12 ( quality
assurance).
4.2
Company goals and strategy
4.2.1 The officially stated goals ( i.e.
mission) of this organization are:
(A)Providing the total solution.
(B)Creating the mutual benefit.
(C)Continually customer satisfaction.
4.2.2 The operation goals are:
(1)Develop new vendors, with lower cost,
better quality and shorter delivery
time…………to achieve the above
mentioned (A) &(B)…………this is the
input end
(2)Extend products lines quickly and
continually………to achieve the above
mentioned (A) ……………….. this is also
the input end
(3)Efficiency internal operation………to
ensure the (1) & (2) work
effectiveness and achieve the above
mentioned (C) ……………this is the
transferring process
(4)Maintain good relationship and well
communication with customers………to
achieve the above mentioned (C)……… this
is the output end
Let’s summarize the above by the Fig.1;
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Vendors 
Yubright
Operation
(internal
process)

Profit,
benefit

customers’
satisfaction
Products 
<< INPUT>>
<< Transferring>>
<<OUTPUT>>
<Fig.1> IN-OUT put model of the YBC goals
4.3 Organization effectiveness
We evaluate this company’s organization
effectiveness by the following 2 views;
4.3.1 By contingency approaches:
We can use the resources-based approach
to measure it’s resources input, such as
the increased effective new vendors, new
components and new subcontractors. Of
course we can also use the internal process
approach to measure if its internal
operation is more and more efficiency? Or
may use the Goal approach to measure if
customers more satisfied( by
questionnaire or telephone communication,
even by the repeated orders ratios.) and
profit increase?
4.3.2 By the Spatial Model of Effectiveness
Criteria (Robert E. Quinn & John
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Rohrbaugh):
This company’s focus trends to be
external, and the structure trends to be
control, so we may evaluate its
effectiveness by measuring efficiency
and profit.
4.4 Organization structure
4.4.1 The organization chart is as Fig.2 below;
General Manager
Sales/procurement
dept. (manager)
Logistic
Finance &
personnel
staffs
Warehousing & QA
<FIG.2> YBC organization structure chart
The above structure illustrates the
required works activities. As previous
mentioned that this is a small company and
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mainly trade based on outsourcing of its
products. Thus the sales & procurement
department plays a main role of it.
From the vertical line, we can also find its
reporting relationship as shown, while the
sales staffs report to manager and then
general manager. But for the other 3
departments, as there is no manager
installed, the report is directly toward
general manager.
Obviously, in this organization, the
employees were placed together whom perform
similar functions, and work on their special
knowledge and skills. The departmental
groupings is functional design.
From the above mention, we may categorize
this organization is functional structure
and it is a typical functional grouping.
4.5 Group behavior & the work team
4.5.1 Base on the Group-Behavior model of Stephen
P. Robbins ( p.223, exh. 8-4 from the
textbook), let’s review the major components
that determine this group performance and
satisfaction;
The external conditions imposed on the group:
As described previously, this is a small
company, so even the resource is limited,
formal regulation is not completed, but it’s
strategy trends to select the minimum
Bachelor degree employee with up-level
salary and with a well performance
evaluation & reward system.
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Also due to its flat authority structure,
and trusty temperature fulfill its
organization culture, so the overall
conditions trend to be O.K..
The group members resources;
As it focus on the selection criteria ( as
with its recruit qualifying manual), as
above mentioned, so all the employees tend
to be skillful, well educated, positive
personality and good interpersonal skill.
The group structure;
The formal leadership & role is well
defined by its operation manual, also the
performance norm was well set ( in
operation manual). By the way, this company
established ( please refer to previous
illustration) since 1977, so the
reputation is good enough to let employees
have the satisfactory of status which keep
the most of employees to stay in
organization. It is also very seldom to
happen the deviant-workplace-behavior in
its records.
Regarding the size, the maximum member
number of the department is less than 7 ( as
previous illustration).
In the last, according to the very similar
group demography attribution for each
member to the composition, they tend to
cohesive.
Note: according to the Robbins model of
cohesive-performance norms & productivity,
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this company tends to be with high
productivity due to its high performance
norms and high group members’
cohesiveness.
The group process & task;
As the organization size is small, thus most
stuffs worked in the different department,
we may easily see the positive synergy effect,
instead of the negative one, i.e. social
loafing. Further more, as the task
performance is quite complex ( for example,
computer skills, minimum 2 foreign language
skills, extreme long/ width of the products
line, mathematic,…,etc.), by the way, the
physical setting is separated ( by OA
furniture), so the performance is quite well
( referring to annual revenue), due to no
outsiders presence.
From the above, we may find the group
performance is well ( USD3.28 millions by
12 peoples) and members are in satisfaction
( the employees turn over rate is very low,
which is 1.1 persons/ year only.
4.5.2 Let’s back to the organization chart ( as
previous illustrated), we found the work
group is small ( for examples,
sale/procurement dept. is 7 persons and 2
persons in logistic dept.); so we may find
each department of it is just as a work team
and with the following characters;
They have the goal of the collective
performance instead of only information
sharing.
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The positive synergy effect is significant
found.
The accountability is not only individual,
but also mutual.
The skill of them are complementary instead
of random & varied.
4.6 External environment impacts
There are mainly 3 impacts for YBC as following
illustration, they all come from the task
environment, (1) is from both industry &
government sectors (2) is from raw material
sector (3) is from both technology & market
sectors (4) is from human resource sector (5)
is from technology sector, here are their
details;
Labor cost is getting higher and higher in
Taiwan, when compare with other Asian
developing countries. This cause the cost of
most labor-intensive-components ( mainly are
those low end parts, passive parts, approx.
40% of the company products) increased, and
lost the competitive advantage very much.
Thus how to obey Taiwan government regulation
and set up a purchasing-liaison-office in
China as soon as possible?
The more and more vendors ( same as 1.1 the
labor-intensive components makers)is moving
their factories from Taiwan to China day by
day. This causes 2 problems, one is the
shortage of supply from Taiwan, another is
the increase of the logistic cost for even
they still supply to YBC from China.
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The glorious internet releasing the
information worldwide well, this cause the
marketing/ sales more and more competitive.
As YBC ( target company) main activity is
international trading, the information is
its core competitive advantage since 20 years
ago, but this is going on its way to history.
So how to retent/ maintain the existent
customers and how to attract/ develop the new
customers are the urgent tasks for YBC.
As the size of YBC is quite small, but the
international trading task becomes very
different than before ( for examples, the
triangle trade which receiving order in
Taiwan but shipping from China,…,etc.), so
the employee training, learning &
globalization become very important.
Same situation as (4), the powerful MIS is
also urgent need to improve the operation
efficiency and achieve organization
effectiveness.
Except the above mentioned task environment,
of course we shall also consider the general
environment ( such as socio-cultural, general
economic conditions and financial
resources,…,etc.) and the current
international context, however, hereby we
only focus on the main and specific impacts
which need to be solve immediately, and ignore
the general situation as equity for all other
relevant organizations.
4.7 Response & adapt to Environmental uncertainty
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We would like to discuss the uncertainty issues
of YBC by the model of “framework for assessing
environmental uncertainty” ( R. L. Daft,
adapted from Robert B. Duncan, 1972) as follows;
In the Dimension of ENVIRONMENTAL COMPLEXITY;
we may find from the above mentioned impacts that
the number of external elements are not large
( from the above five main impacts analysis, only
six sectors/ elements which are industries,
government, raw materials, market, HR and
technology.), also the similarity level is very
high ( mainly is related to the China supply and
technology/computer), so we categorize this
dimension to be “ SIMPLE”.
In the Dimension of ENVIRONMETAL CHANGE, from
the above elements analysis, we found the change
is frequently and unpredictably, for examples,
the supply and alternative China supply,
further more, their customers ( electronic
components users) change their designs rapidly
and frequently. So we categorize this dimension
to be “ UNSTABLE”.
Summarizing the above discussion, this company
is located in HIGH-MODERATE UNCERTAINTY
( simple + unstable) position. And we may also
find its response characters to adapt the said
uncertainty tends to be:
a. Organic system: In YBC, there is not much
written rules & regulations, the hierarchy of
authority is not clear, structure is flat, and
decision making is general decentralized. By
the way, it focus on the teamwork and
participative, such as the frequently oral
communication, informal meeting &
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discussion.
b. Few departments: There are only 4 functional
departments as previous described, as in the
open system, not too much different external
environment sectors influence it, most of
them are very similar, the few departments are
able to deal with them sufficiently. Also the
few departments will not increase the
internal complexity.
c. More boundary spanning: In YBC, the
information related to the external
environment is more and more important, for
examples, the suppliers’ activity of products,
customers’ demand, currency exchange rate,
banks’ interest rate for the L/C negotiation,
China’s new regulation and custom
tariff,…,etc. It’s not only get information
from outside of organization, but also need
to send the information out, they are
information linking, coordinating and
exchanging.
d. With planning orientation and fast response:
As we may see the rapid change in the
electronic industries, the plan become very
important to YBC, for example, it has to
estimate, calculate and decide how many IC,
for particular PCB, to purchase in February
in order to meet the 2nd. quarter’s demanded
with enough large quantity for negotiating
the price with vendors, but not overpay for
cost if the market price was drop down later,
and/or be able to handle the extra parts if
customer suddenly drop/decrease the order
quantity when due. It also keeps and trains,
in many different way such as lecture &
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courses, all employees to be able to spot the
treats & opportunities in the environment, to
make sure the organization may always
response immediately.
4.8. Control the resource dependence
The environment is the source of scarce, and the
valued resources are essential to
organizational survival. From the resource
dependence perspective, we discuss from the
need and relevant dependence for financial and
material resources;
Financial resource: Actually this is general
and same for all organization, but in the small
company as YBC, it is more as the vital part.
For example, in experience, when doing business
( purchase from)with Nan-Ya ( a local public
company), they requested the pre-payment, they
only arrange the production upon receiving the
payment. Today, many larger public companies do
the same thing to the small trading companies.
But we must consider the payment from foreign
customers are generally by L/C which will be
negotiable only after the commodities were
shipped and documents were collected, except
the banker may accept the loan by L/C or other
real estates.
Material resource: Acted as a trading company,
generally purchased commodities from vendors/
suppliers for all. But sometimes, the vendors
will be not able or not will to supply when they
facing another bigger customers, or have
negative stress from another relative more
important customers than YBC. In other
circumstance, maybe the vendors discontinued to
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supply due to bankruptcy or moving their
facilities to other countries…,etc.
The current solution of YBC to control these
resource dependence are;
(a.)Established the ordinary and legitimate
relationship with two major banks, by
providing the beautiful statement & balance
sheet through buying a 400 square meters
office in a commercial building located in
downtown, the name of organization.
(b.)Always, if existed, find and establish the
relationship with minimum 3 vendors for all
core products, in order to avoid the
uncertain supplying risk of the materials,
including the assembling facilities.
In the last, let’s put some additional
discussion below for the ending of this part;
First, regarding the organizational response to
adapt to the uncertainty of environment, we
found this company plays almost nil of both
differentiation & integration roles. We suppose
this is not the vital necessity or without
significant function for such small size of the
company instead of lack of these kinds of
response.
Secondary, regarding the resource dependence,
we found its controlling methods are
characterized to be “ ESTABLISHING THE
INTERORGANIZATIONAL LINKAGES”, but not
belonged to any of the 5 main techniques
( ownership, formal strategic alliances,
co-optation & interlocking directorates,
executive recruitment and advertising & public
relationship.) We suppose they are mainly
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workable for those related larger companies.
Thirdly, we also didn’t find its effort to try
to change the environment by “CONTROLLING THE
ENVIRONMENT DOMAIN” ( 4 main techniques, as;
change of domain, political activity,trade
association and other illegitimate
activities).
Obviously, it didn’t have the ability to do so
in the current stage.
4.9 Inter-organizational relationship
Firstly, we categorize the other organizations
into SIMILAR & DISSIMILAR. According to the
background and activity of YBC ( abbreviation
of the target company), they are;
(1)SIMILAR:
Including the (a)competitors whom also act as
the electronic components & parts trading
( exporting) company with export orientation in
Taiwan & China. (b)vendors whom supply to YBC
but themselves also active in exporting their
own products ( made in China or Taiwan) to
international markets. (c) vendors whom supply
to YBC but without their own factories, means
basically they act as trading companies or
distributing agents also for supplying to the
domestic or international markets.
(2)DISSIMILAR:
Including the (a)vendors whom supply to YBC but
not export oriented and not active in the
international markets. (b)subcontractors whom
do OEM ( origin equipment manufacturing) for YBC
as customized
production.(c)non-business-coordinated-compa
nies whom supply equipments or stuffs for
consumption or maintenance materials ( for
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example, cartons, packing tapes, letter
sheets…,etc), or provide service to YBC for its
outsourcing functions, such as
accountants/bookkeepers, custom agents
( custom works & documentation), local
transportation carriers, shipping forwarders,
advertisement agents, banks, inspection
company, MIS project company,….,etc. (d)
supporting-third-parties whom help YBC in
various ways without direct relationship or
charging, such as CETRA, commerce conference,
etc.(e) customers ( importers) whom purchase
from YBC.
Secondary, we illustrate the interorganization
relationship, according to the above category,
by the follows;
(1) For the SIMILAR organizations, YBC tends to
be competitive relationships with them and act
as POPULATION ECOLOGY, they engaged in similar
activity with similar patterns of resource
utilization and outcomes, they compete for
similar resources ( products, vendors,
information, techniques,…,etc) and similar
customers ( all foreign electronic components
& parts importers with demands.). Obviously,
YBC survives by its structure, goals, personnel,
products, techniques and service…,etc, which
might be selected or rejected by the environment.
It seems still struggles in the process cycle
of VARIATION-SELECTION-RETENTION, even it
works and survives in the market for over 26
years.
(2)For the DISSIMILAR organizations, YBC tends
to be cooperative relationship and act as
COLLABORATIVE NETWORK, as they join and work
together to become more competitive and to share
scare resources. They share the risk, reduce the
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mutual cost as possible by the following
examples;(a) When the business environment is
going down, such as the following 18 months after
2000-9-11 New York twin house terrorism attack,
the transportation companies & custom agents
reduce their service rate/fee to support YBC,
after serious and frank negotiation. (b) Their
subcontractors will feedback the assembly cost
& components cost to YBC time by time ( generally
every quarter) to negotiate the new price for
next quarter. (c) YBC will share or completely
stand the tooling development cost with the
vendor for the new products, but vendors also
do the same thing when the quantity quota
achieved economic scale. (d) YBC share the
information to their vendors for new products,
new techniques and new tendency. The vendors
also do the same back to YBC.
We hereby discuss the relevant strategy for the
above;
(1) For SIMILAR organizations, in this case, the
POPULATION ECOLOGY model, YBC is in the struggle
for existence, competition & survival. It is with
a wide niche and broad domain, and there are 2
significant ways to achieve succeed which are
generalist or specialist. Because its size is
very small, resources are constrained and
limited, generalist seems not a proper way. From
another point of view, as it acts and survives
in market for over 26 years, accumulating a lot
of experience and techniques in all, the
specialist strategy seems a proper solution for
its future, that’s to say it must plan and fine
a suitable niche market ( product lines, service
type and customers category) for itself as soon
as possible. This will avoid the waste of
resources and maximize the benefit from the
27
“right” customers & “right” products.
(2) For the DISSIMILAR organizations, in this case,
the COLLABORATIVE NETWORK model, YBC already
understood that the partnerships are the major
avenue for entering the glory future. We found
it works from adversaries to partners, we have
also found the trust, commitment, equity,
information share, resource share and
both/mutual profit…,etc., are all already on
their way to the glory.
4.10 Involve the international environment
4.10.1 International development:
The YBC is export-oriented, as per previous
description of its activity. However, we put
it at the stage two of the international
development, INTERNATONAL, according to the
“Four Stages of International Evolution”
model.(Nancy J. Adler, 2002) Because even its
market is international, but the structure is
still domestic. In another word, this is a
domestic company with the international
markets by exporting.
4.10.2 Current organization structure &
international advantage:
The YBC supply different components to
different markets/ countries to fit the
various demands. Also the customers types are
different, some are manufacturers, some are
wholesalers and even some are the unique
retailing electronic shops. So the
competition in each country is handled
independently of competition in other
countries. Obviously, the appropriate one is
the multidomestic strategy for the moment.
28
4.10.3 In the next, we would like to analysis YBC by
“Model to Fit organization structure to
international advantages” (Roderick E. White
& Thomas A. Poynter, 1989) as follows;
As the business type of YBC, both the forces
are low, we put it into the export strategy
and the structure would be “International
division”. When we review to the organization
chart of YBC in previous section, we may also
find that it is the typical type of the
international division category. ( We’ll see,
its sales department is just equal to the
international division at all.)
4.10.4 Summarization:
As the limitation of YBC size and resource,
it seems still a far way to globalization, in
the other point of view, it seems also without
immediate need to do so. However, the
following challenges about the
internationalization issue still in front of
its way;
(1) Knowledge transferring: Instead of
inter-countries, but inter-persons and
inter-department within the
organization.
(2) Cultural difference: Even not as the
direct impact as the global or
multinational companies, however, it’s
still very important for training staffs
to fit this subject. For examples, the
sales staffs have to understand the
different way to do business with
different country’s customers, the
logistic staffs need to know the proper
and preferred way to accommodate the
29
shipment and other logistic works to
serve different customers.
4.11 Technology used and the influence to
organization structure
4.11.1 The technologies used:
According to the YBC activity as a trading
company, its core technology is the purchase
& sales. It has to always look for the new
products, new vendors and new customers.
Let’s illustrate its major work flow as
following Fig.3;
VENDO

YB
C

CUSTOME
RS
RS
Purchase
(core)
Finance
Personnel
(non-core)
Sales
(core)
Warehousing,
QA ( non-core)
Logistic, shipping (non-core)
FIG.3 Work flow of YBC, core & non-core
From the above, we may find that the purchase & sales
are the core technologies of YBC, as they are directly
related to the mission as “sell customers the reliable
quality, competitive price products with the fast
delivery and good service”. In another way, even the
30
other departmental technologies ( logistics,
warehousing, QA, finance & personnel) are not
directly related to the mission, but they are still
very important to the organization, as they provide
the support to ensure to accomplish the mission.
4.11.2 The influence to organization structure:
4.11.2.1 According to Perrow’s model, the
variety of work process & task is low,
because there is very few novel task
occurred and seldom to confront the
unexpected events, staffs almost
proceed the same procedures for daily
works such as; communicate with old
customers, develop the new customers,
searching the new products & new
vendors, compare the products’ quality,
price & delivery, checking and
accommodating the payment receivable &
payable, receiving the commodities and
inspect it and storing them, contacting
the forwarders and arranging the
shipment…,etc.
However, the analyzability is high
because there are many different
patterns of customers, such as some are
located in developed countries but some
are in developing countries, some are
manufacturers but some are wholesalers,
some are quality sensitive but some are
price sensitive, some requested the
fast delivery but some may accept longer
delivery. Same situation also happened
in different vendors, different
products and different shipping ways.
31
Thus we categorize YBC in the ROUTINE
type for its department technology.
From the theories, we shall find its
management characters are high
formalization, high centralization,
wide span, vertical & written
communications. However, we didn’t find
the well matching here with our previous
discussion. ( will discuss later for
this significant mis-matching.)
4.11.2.2 According to the Thompson’s model,
even it is mostly designed for
manufacturing firm, but we may find the
YBC tends to be between pooled &
sequential interdependence. Actually
if we only look at the work flow, each
departments work alone. But if we focus
on the products/services flow, we
found it as follows; order from
customers  purchase from vendors 
receiving commodities / payment to
vendors  QA/ warehousing 
delivering/ shipping  payment
collect, whereas we’ll find it tends
to be sequential.
Anyway, from Thompson’s point of view,
the YBC is suggested to use rules &
procedures to standardize activities
across departments, but extensive
planning and scheduling are also need.
4.12 IT & its relevant control system
4.12.1 Current IT infrastructure ( hardware &
networks):
32
The following Fig.4 is the YBC network chart today;
Business partners
3rd. parties
Vendors
Customers
INTERNET
------Physical boundary of YBC-------WAN
LAN
b Cobel-3)
Mail server(Sun
Web server(IBM X-200)
BDS
server(IBM X-205)
s
e
r
v
e
r
Work stations PCs(for all staffs in all departments)
<FIG.4> IT infrastructure chart
From the above diagram, obviously, YBC has well
constructed local area network(LAN) system for
intranet, however, the extranet which connected
vendors, customers & business partners is still
33
lacked as its database server is isolated with the
WAN/ internet, so the communication between them are
still restricted in only its passive website and
ordinary e mails. ( The problem is software which will
be explained in next session.)
4.12.2 The software:
In 1986, YBC first went on its way toward
computerization, they choose a interdependent system
engineer to develop a customized software based on
MS-DOS environment. Everything is fine in the
beginning until the engineer was dead by accident,
5 years later, whereby the company suddenly found
there is nobody may take over to maintain the system
both inside & outside the organization as he didn’t
release the original source codes of the whole system.
The 2nd. generation system software of YBC started
since 1991, almost immediately as the previous
version became bogged down, which was a package
application ( instead of customized project as
previous) purchased from local famous public company,
cost total NTD360,000 not including the training &
consultant fee( this is almost 4 times than it pay
for previous version.). This package is based on MS-NT
and user friendly as it is very famous smart ERP system
for that contemporary. But unfortunately it went to
its mausoleum not lasting for 23 months. This is not
because of the software itself but for its rigid
contexture and extreme expensive modification fee.
( For example, YBC’s products P/N consists of 24
digits, but the software allows maximum 18 digits,
it will cost NTD80,000 for only modify this different
format. Otherwise, YBC has to change its P/N coding
construction for over 50,000 items in its products
line, …and so on.)
It’s an terrible ordeal after these failures and the
34
IT retrograde to old/new systems confused mixture
mess and half manual operation occurred. YBC suffered
for the data inconsistence & low efficiency for the
following 2 years until there was a new manager, even
he is not IT background, participated. Later, since
1995, YBC implemented a brand new customized project
for its IT, by a team work programming company instead
of independent engineer, based on the OS MS-NT
environment, step by step, according to its real
operation procedures and exact demands. So far, it
works in the whole organization through different
departments around all standard procedures smoothly
and efficiently, as intranet. Also it is now in
evaluating & planning for integrating extranet in
order to meet the next coming future.
4.12.3 The overall IT application:
Richard L. Daft defined 3 steps for evolution of
organizational applications of information
technology, according to the management level ( from
first-line/operational, past, programmed to top/
strategy, plans, non-programmed) and system
complexity ( from low to high), as (1.)operations 
(2.)decision making & control  (3.)strategy weapon.
Hereby we would like to follow these steps to examine
the IT applications in YBC;
4.12.4 Operations:
As YBC acts as a trading company, there are many
important conventional paper works, however, it is
almost only very few physical papers exist in office
today, as the internal transaction processing and
procedures are proceeded through computers via data
warehousing & data mining of software, for all
departments, from the inquiry to quotation, from the
products searching to vendors selecting, from
customers’ order to YBC’s purchasing, …,etc.
35
4.12.5 The information for decision making:
(1)Information reporting system is well
proceeding, for example, the
inventory is real time on line, the
shipping schedule including the estimated
time of departure/ arrival is reported as
soon as the order fulfilled, it may report
the sales amount for any period of any
particular customer or compare
inter-customers, it may report the sales
value for any period of any particular
items or make the comparison between
various items, and so forth.
(2)Executive information system is not found
in its system.
(3)Decision support system is not found in
its system.
4.12.6 The information for control:
(1)Management control system is not completed,
as it only established the personnel data,
salary, and bonus for sales department
according to their monthly sales amount,
but nothing else for such as planning,
budgeting, or completed performance
evaluation function, and so forth.
(2)Balanced scorecard control is not existed
in this company at the moment, nor
alternative similar ones.
4.12.7 As strategy weapon?
4.12.7.1 Networking for internal coordination:
(1) Intranet is established as previous
description.
(2) ERP is not converted yet for the
moment.
(3) YBC is now doing its most effort to
36
organize and standardize its
intellectual capitals ( knowledge,
experience, process, problem
solving, discoveries,
understanding, relationship, and
so forth.) available on line, to
share to all within the company. So
the Knowledge management is just
under construction now.
4.12.7.2 Strengthening external relationship:
(1) EDI & Extranet are not yet
established.
(2) To be a integrated enterprise is
still impossible before it
established its extranet, because
even the system now may coordinate
within the company but not yet
including the suppliers, customers
and partners.
(3) According to the above, it still a
long road for it being an real
E-Business as the extranet and EDI
exchange network are the important
components of e-business.
4.12.8
Discussion:
From the above illustration, we would like
to point out the main problems of YBC in
the IT field, and try to bring some
suggestion as follows;
(1) It wastes too much time and money in building
its IT as described in the previous software
section. The problem of the previous failure,
especially the 2nd. generation software, is not
exactly the software problem. We must know
implementing information system has
37
consequences for task arrangement, structures
and people, all these components must be changed
simultaneously ( Leavitt, 1965). The failure
was come from the organizational resistance and
failed mutually adjusting relationship between
IT and the organization.
(2) Even till the moment, it only completed the
operations function and reporting system for
middle level decision making function. Despite
the function as strategy weapons, there is also
only very few function in the control level.
However, YBC has been walking on the IT road
for a long time, its hardware infrastructure
is quite well, and it should have enough
experience through previous failures. So the
first priority of the current IT tasks are;
(a) Understand and overcome the organizational
resistance for IT.
(b) Utilize its IT infrastructure to develop the
higher management level functions of
information system, especially for the
decision making and control.
(c) The extranet is very important for YBC,
especially because of its business activity
in the trading/exporting. It must make more
effort to accomplish perfectly
communication and coordination with its
customers and suppliers. The extranet will
help efficiently and effectively.
4.13 Investigation for YBC life cycle staged,
stagerial crisis & its control system
4.13.1 Life cycle:
In virtual world, the business life is not
38
necessary to be followed matching with the
life cycle model. But contrary, the theory may
provide us a good thinking and way to review
the real working business. Hereby we
illustrate the company size by both the annual
revenue and number of the employee as follows;
Revenue (USD: Million)
4
3
2
1
Year
1977
1987
1997
2002
<FIG.5> Revenue in different year
39
Number of employee
30
25
20
15
10
5
Year
1977
1987
1997
2002
<FIG.6> Number of employee in different year
As we have described previously, this company
only has 12 employee at the current time, and
2003’ revenue is over 3.28 Millions US Dollars.
When we compare the revenue and the number of
employee, we found this company’s size is
going down, as in 1997 there were 23 persons
but now only 12 persons. However, the revenue
is approximately 50% up and employee is almost
50% down when we compare the year 1997 and 2002.
Of course there are some other criteria have
to be considered but not our current
concentration, such as the net profit,
business patterns,…and so forth.
As this company is quite small, it’s not
correct to interpret the phenomenon to be
40
down-size or decline …, and so forth, contrary
we would like to explain this situation (23
to 12 persons) is the response for the
technical improvement ( such as IT, internet,…)
and we rather to state that this company is
almost maintain the same size without any
growth.
4.13.2 Stagerial crisis:
From the above mentioned, it seems it still
stayed in the ENTREPRENEURIAL stage,
according to Robert E. Quinn & Kim Cameron’s
(1983) model of Organization Life Cycle.
However, we would rather state that this
company is now at COLLECTIVITY stage, because
its structure is mostly informal, but with
some procedures ( as previous description),
it provides major products and service with
variation ( main products are electronic
components & parts for exporting service), but
the reward and control system still nearly
personal and contribution to success ( see
previous section), the innovation is mostly
come from employees and managers ( procurement
& sales for many new components as previous
description), the goal is growth in sales &
profit ( referred to previous bonus & reward
system description) and the top management
style is direction giving ( every sales people
has her/his own quota monthly and work
independently) without formal delegation with
control.
However, when we come back to investigate its
current stagerial crisis, we may find that in
the competitive environment with finger-tip
information accessible world, it must work
more efficiently and effectively to
41
accomplish the company goal which just need
the more delegation with well enough control
inside the organization. It needs to find the
mechanisms to control and coordinate
departments without direct supervision from
the top management to campaign in the
competitive business jungle.
4.13.3 Control system:
This company is not going forth to the
bureaucracy, at least not now. Because the
size is quite small, the current available
control system is simply by the follows;
(1) Market control:
AS previous description, every sales
( most employees) has her/his own quota of
sales monthly and the bonus and
compensation is according to the profit
she/he earned as well as the revenue she/he
had done.
(2) Clan control:
AS the organization structure is quite
flat and number of the employees is quite
low, all staffs worked together just like
a family daily. The implicit factors such
as shared values, commitment and
traditions are so important and also so
helpful internally.
4.14 The Organizational Culture
According to the Daniel R. Denison & Aneil K.
Mishra’s ( 1995) model of “ the relationship of
environment and strategy to corporate culture”, we
examine the two dimensions of the strategy focus and
42
the needs of the environment, this company is more
focus on the involvement and participation of the
employees due to its trading business as well as the
closed relationship of all members. However, the need
of the environment seems more stable rather than
flexible, as previous described. Under this results,
the organization culture should tend to bureaucratic
culture. However, we cannot see the significant
symbol, ceremonies...,etc, which are matching to
this type of culture.
4.15 The innovation & change
4.15.1 There is a significant change in the
organization as technology change;
the IT, both hardware & software changing the
internal working process. For examples, there
are almost not any typewriter exist in office
which used to be more than 5 sets, also the
papers getting less due to the computer
application.
4.15.2 There is an urgent need of change of this
company as service change. As previous
described, YBC is establishing its extranet
and it will add its service value, not only
for the easier transaction for customer, but
also make the cross-sales possible. Because
it will help customers easy to find all
relevant components on line through YBC, for
over 50,000 items.
4.16 Decision making processes
As the simple structure & small size of the company,
the organization decision making is almost as the
individual decision making by the general manager.
There is not formal decision making procedure, nor
43
team for solving the problem.
However, if we must use the “contingency framework
for using decision model”, we found the company tend
to be in the cell-three position ( for individual
is judgment, trial & error, for organization is near
to the incremental decision process model.),
because in many situation, the problem and standards
of performance are certain, but alternative
technical solutions are vague and uncertain.
We may find the crisis here, by the example of the
several MIS software failure.
4.17 Conflict, power & politics
4.17.1 Conflict
If we review the possible sources of the inter-group
conflicts from goal incompatibility,
differentiation, task independence and limited
resources, we may find the main conflicts ( even not
much) are come from task independence, for example,
sometimes the sales staff has complain from customer
for delay of shipment which is due to the logistic
staff cannot accomplish on time. However, as
previous described, the goals are same for all
members and everybody may share the bonus from the
total sales, all members are with the same educated
degree with similar majors, also there is not
resource mis-distribution problem, even the
resources are limited.
4.17.2 Power
When we review the possible sources of the power from
coercive, reward, expert, legitimate, referent and
information power, we find the power inside the
organization mainly are legitimate & reward for the
vertical, and expert for the horizontal.
44
4.17.3 Political activity
Non political activity was found in this case.
5.Conclusion
5.1 This is a middle formalization, low
specialization, low professionalism,
centralization and flat organization. The
personnel ratio was as shown above.
5.2 According to the previous description of this
organization’s business activity and the
analysis of its statement of goals, we can
understand that this company works through its
wide capability of various components, but
sells according to customers inquiry. From the
Porter’s competitive strategy view, it trends
to be low-cost-leadership. But from Miles &
Snow’s strategy typology view, it trends to be
the defender strategy. They are; seeking for
lower cost, lower overhead and emphasize the
operation efficiency.
5.3
Review the strengths & weaknesses from this
organization structure shown;
5.3.1 Strengths:
5.3.1.1 It allows only very few peoples in the
functional dept., such as
finance/personnel, logistic and
warehousing/QA. Here we cannot say the
economies of scale as this is a quite
small organization, but we can see the
capacity of the workers are huge.
45
5.3.1.2 It enables the organization to
accomplish functional goals more easily.
As we can see the employees focus on their
special functional works with well
performance.
5.3.2 Weakness:
5.3.2.1 We didn’t fine the typical weakness of
functional structure here, such as
hierarchy overload & poor horizontal
coordination, this might be due to its
small size. Contrary, we found the
horizontal communication & coordination
is well and authority hierarchy is quite
efficient due to its small size.
5.3.2.2 But indeed, it results in less innovation
and slow response time to environmental
changes.
5.4
This company is almost with the same size after
26 years of establish. However, the size must
be growing and approaching to the bureaucracy
way, according to Max Weber’s prediction. But
in fact it doesn’t. The reason might come from
the follows;
5.4.1 It already found its niche market and core
competitive advantage in the international
electronic components market. As we may find
its market distributing to almost 40
countries in the world and many of them are
the developing countries or third world
countries, which the margin & profit will
be better and market atmosphere is stable
and higher royal.
46
5.4.2 The IT helps it to grow in sales without
adding, even cutting the number of employees.
By the way, the recruiting policy for this
company is searching the right person for
right place whom are all well educated
knowledge workers. This also burdens the
necessity to expand the company size with
the better performance.
5.5
This company now faced a urgently need for
delegation & coordination internally, as well
as the better control, in order to work more
effectively and efficiently to campaign in the
market.
5.6
When theories meet practices:
In the field of management, we have studied
a lot of the theories and also experienced a
lot of the practices. How matching they are?
When we study the theories, everything seems
logical, reasonable and understandable. But
sometimes we confronted the conflict &
contradiction while try to lead them to fit
the practices.
Hereby we try to discuss the possible reasons
for the incompatibility;
5.6.1 As the theories are mostly come from western
scholars which, we shall consider the
culture difference as the variance factor
while apply them to other countries.
5.6.2 Same as above, we shall also consider the
contextual factor.
5.6.3 The organization size might also be the
influenced factor. ( shall we select the
47
similar size for study?)
5.6.4 Missing the correct indicators due to the
lack of strictly quantify procedure.
We shall always keep in mine that the theories are
not necessary to fit to the practices. However, in
any situation, the theories still provide useful
structure & model to examine the practices.
6.Reference
6.1 Richard L. Daft, Organization Theory & Design,8th.
ed., 2004, Ohio, South-Western, a division of
Thomson Learning.
6.2 Stephen P. Robbins, Organizational Behavior,10th.
ed., 2003, NJ, Prentice Hall.
6.3 Kenneth C. Laudon & Jane P. Laudon, Management
Information Systems: Managing the digital firm,
7th. ed., 2002, NJ, Prentice Hall.
6.4 Richard B. Chase, Nicholas J. Aquilano & Robert
Jacobs, Operational management for Competitive
Advantage, 9th. ed., 2001, NY, McGraw Hill.
6.5 Stephen P. Robbins & David A. DeCenzo,
Fundamentals of Management, 3rd. ed., 2000, NJ,
Prentice Hall.
6.6 Richard L. Daft, Management, 6th. ed., 2003, Ohio,
South-Western, a division of Thomson Learning.
6.7 Stephen P. Robbins & Mary Coulter, Management,
48
7th. ed., 2002, NJ, Prentice Hall.
6.8 許士軍, 管理學, 十版, 1990, 台灣, 東華
6.9 伍忠賢, 管理學, 初版, 2002, 台灣, 三民
6.10 鞏平邦, 管理學, 初版, 1991, 台灣, 三民
6.11 鄭伯勳…,等, 組織行為研究在台灣: 三十年回顧與展望,
初版, 2003, 台灣, 桂冠
6.12 林子銘…,等, 研究生論文成功指引: 學術生涯的規劃管理,
初版, 1999, 台灣,華泰
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49