Rondell Corporation

Case 15 Rondell Data Corporation

Teaching Notes

Copyright © Gareth R. Jones, 1994

Synopsis

The Rondell Data Corporation is an innovative electronic products company that manufacturers twomajor lines of electronic products, broadcast equipment and data transmission equipment. The companyhas grown from 100 employees in 1947 to over 800 employees in 1978. As it has grown and increasedthe number of new products developed and manufactured, it is having problems coordinating activities.The company structure is not sufficient to manage the breadth and depth of activities. As functions havegrown and differentiated, each has developed subunit orientations. As different functions pursue their own goals and fight for their own interests, the level of conflict in the organization increases, and theengineering department, finds itself in the crossfire.Engineering handles all conflicting demands and interests of the other functions and integrates activities, but without power. Power results from informal working relationships built up over time. The president,Bill Hunt, attributes the lack of cooperation to problems with the head of engineering, not to the failureof organizational structure. The issue is that the company needs a new structure to coordinate itsactivities and reduce conflict.

Teaching Objectives

1.To examine how conflict can emerge between functions because of poor organizational design.2.To analyze the different sources of conflict in an organization.3.To analyze how different kinds of structure can be used to reduce conflict and speed productdevelopment.This case is best used after the lecture on conflict, so students can pick out the sources of organizationalconflict. It shows how the interests of functions differ and defines differentiation. Discussion can fill anentire class period if attention is given to redesigning the structure. Students sympathize with Frank Forbus, Rondell’s last director of engineering (Rondell has had three directors in four...