Chapter 13 – Bagby Copy Co

Bagby Copy Company is a worldwide producer of copy machines. It manufactures 10 different copiers, ranging from low-end desktop copiers that sell for a few hundred dollars to high-volume document machines that retail for over $200,000. Each copy machine requires a wiring bundle. Each bundle contains several hundred wires and connectors that provide circuits connecting the paper-flow units, scanner, and photoreceptor to the internal computer logic. The wire harness is plugged into various components during the assembly process. It is possible to assign each major task in this process to different employees. For example, a given employee might focus on one of the many connectors or on testing the completed wire harness. Alternatively, one individual might be assigned the task of producing and testing a completed harness. In either case, there is a group of employees that is assigned individual tasks to produce a wire harness for a particular copier. In total, there are 10 subgroups of wire harness makers. One alternative is to place all 10 groups in one wire harness department. Another alternative is that each of these 10 subgroups can be assigned to and report to a manager responsible for a particular copier. Bagby operates in five European countries. Currently, it has separate subunits in each country, where a country manager handles the manufacturing and marketing of all 10 copiers. The company is considering two alternatives. One would be to organize its foreign operations around products. In this case, there would be 10 international product managers with decision rights for managing the manufacturing and sale of a particular copier throughout Europe. The company also is considering a matrix organization, organized around product and country.

1. What are the trade-offs that Bagby faces in choosing between specialized and broad task assignment?

2. What are the trade-offs between these two methods of grouping wire harness makers into subgroups?

3. Which trade-offs does Bagby face in choosing among the country, product, and matrix forms of organizing its international operations?

Smith Jr., Clifford W.; Jerold Zimmerman; James Brickley. Managerial Economics & Organizational Architecture (Irwin Economics) (Page 431 – 432). McGraw-Hill Higher Education. Kindle Edition.

SAMPLE SOLUTION

Bagby Copy Company

Question One While selecting between broad task and specialized task assignment, Bagby Copy Company experiences various tradeoffs. The company places emphasis on narrowing tasks assignment in order to concentrate one specialty. On broad task, assignments require an employee to handle a variety of tasks (Brickley et al., 2004). As such, when the company chooses to use specialized task assignment, it will enjoy the benefit of specialization which minimizes training expenditure. On the contrary, employee’s skills and knowledge is limited to that particular task. Therefore, in case of new roles and duties that require unique skills, the company will be forced to hire specialists. Thus, the company will face limitations in terms of rate of productivity and technological competitiveness. Limiting…