Dynacorp

Business Management 706

Managing in a Dynamic Environment

Fall 2010

Case Analysis:

“Strategic Design at Dynacorp”

I. Dynacorp at a Glance

The Dyna Corporation is one of the leading global information systems and communications (ITC) companies. Dynacorp has its roots as an office equipment company and moved into high technology applications.

In the 1980s it became industry leader, being famous for technological innovations and high quality products.

The 1990s were a challenging period for the company. The former rapid growth decelerated and earnings were reduced as well.

Eventually, both inside and outside critics, identified that Dynacorp had problems in bringing new products to market, that costs were too high, and that it reacted too slow and unresponsive to changes in the market. Furthermore, ITC consulting firms entered the market and have become a serious competitor for the simple reason that they offer a higher value to their costumer through additional services and solutions.

II. Identification of Dynacorp´s status quo

Like many new companies, Dynacorp has adopted since their first days the functional grouping structure, as shown in figure 1. The strategic design consisted of three line divisions, namely engineering, manufacturing, and marketing. These were supported by corporate center units, for instance finance and human resource management.

Figure 1: Outline of Dynacorp´s Functional Organization

The engineering division was divided into ten groups of technical areas. In the beginning its personnel was based in one location. But over the time the engineering division was spread across three regions of the USA.

The manufacturing division was organized by location and controlled as a cost center. Like engineering, Dynacorp`s manufacturing division has started in one location, but afterwards it expanded to 12 plants in the USA and in Europe. In the beginning some factories had begun to produce one specific product line, but...