Digital Electronics

CASE STUDY 4

Digital electronics was established 20 years ago by Mike with a mission to produce high quality,

innovative consumer electronic goods at lowest possible costs and that catered to the ever changing

needs of its customers.

The organisational structure at Digital was characterised by a tall hierarchy with a number of

managerial levels between the shop floor executives and the CEO. The leadership style that

prevailed was autocratic wherein employees were seldom involved in the organisation’s decision

making process. All crucial decisions were made by top management and merely conveyed to

employees at the lower rungs of the organisation.

Though Digital had been performing well in the industry, its profitability levels and market share

were gradually dwindling. This was a serious cause of concern for the CEO, Noel, who invited top

level managers to give their suggestions to tackle this problem. A discussion that followed the

meeting identified deteriorating quality of their products coupled with lack of innovation as the

main reason for the lowering demand of their products in the market.

Marsh, Director HR blamed the organisation structure for the depressing innovative spirit among its

employees , which in turn, hit the sales. He suggested that Digital introduce the concept of self

managed teams(SMTs) to overcome this crisis. By providing enhanced responsibility and authority

to a group of employees through SMTs, Digital might enhance employee commitment resulting in

improving productivity and efficiency of the workers.

The whole team was taken aback at the proposal of Marsh. Noel also felt that the bureaucratic

culture at Digital might not encourage the implementation of SMTs besides other issues that have to

be dealt with for the success of the SMTs. Marsh, then pointed out recent organisational examples

which had benefited by implementing the concept of SMTs, important being a telecom company

that had witnessed...