Introduction The purpose of this paper is to answer the following questions posed in module three case study assignment: “Can Michael Dell be successful in turning around Dell Computers? What are some of the main initiatives (related to Organizing) that Dell has implemented in order to turn Dell Computers around? ”. To answer these questions we must determine what organizational design is and what Michael Dell has done to his company with regards to Organization Design. Organization Design What is Organization Design?
It is “is a formal, guided process for integrating the people, information and technology of an organization. It is used to match the form of the organization as closely as possible to the purpose(s) the organization seeks to achieve. Through the design process, organizations act to improve the probability that the collective efforts of members will be successful” (McNamara, 1996). Turning around Dell Computers With the return of Michael Dell to the helm of Dell Computers in 2007, the company has been making a record turnaround.
It has gone from stagnant sales and losing money in the PC business to such companies as Hewlett Packard, to a new and improved company with new directions. Michael Dell has been “making sweeping changes in everything from personnel and partnerships to acquisitions and distribution” (Edwards, 2009). One of the organizational ways that Mr. Dell is achieving this is by shifting away from simply making good reliable and relatively inexpensive PCs to Research and Development and offering more services.
He also “has used acquisitions to offer a broader range of storage, software, security and services, which often carry higher profit margins than PCs. ” (Ricadela, 2011). Another way Mr. Dell has utilized organizational design is by completely overhauling his management team; this company restructure is now focused more intently on the customer, as well as branching out to other services such as Smartphones and tablet devices. “The new Dell requires completely different skills—flexibility, customer focus, and innovation. ” (Edwards, 2009). And with the hiring of Garriques, former head of Motorola’s mobile devices usiness, the company is now adding a personal style with the products they are selling. Garriques also sent a message to employees of Dell that consumer business was going to be a priority. Dell also broke away from the more traditional form of direct to customer sales to a plan to sell Dell computers at Wal-Mart in an effort to reach customers (Edwards, 2009). Another area that Michael Dell wanted to change was the company’s management culture. So he brought on board Brain Gladden. One of the things that Gladden noticed was a lack of structure within the company.
After months of study, Gladden determined that the company should be restructured around its customers and not the more traditional way of most tech companies that “organize around the products they sell” (Edwards, 2009). This restructure resulted in four customer groupings: “consumers, corporations, small and midsize businesses, and governments and educational buyers. ” (Edwards, 2009). As a result more consumers have benefited from this organizational design change. In the small and midsize business section his sales people were given “incentives to offer a broad range of solutions, instead of just hardware. (Edwards, 2009). For example, at GA Communications in Georgia, Dells regional sales manager showed up within hours of them making an inquiry. Though only a million dollar deal, Dell offered to help the company integrate its Macs computers into the offer and agreed to talk to software providers to include their products as part of the purchase (Edwards, 2009). Conclusion So in conclusion while it is a “wait and see” time for Dell, its founder, Michael Dell is “convinced he can prove the skeptics wrong.
He understands that only a handful of former chiefs have returned to lead their companies to brighter futures. ” (Edwards, 2009). And in Michael Dell’s own words about the future: “The epicenter of the company has really shifted to these other areas and away from the PC,” Dell said. “If fiscal year ‘11 was about getting operationally fit, then fiscal year ‘12 will be about leveraging this strength. ” (Ricadela, 2011). References Edwards, Cliff (October, 15, 2009). Bloomberg Business Week, Title of article: Dell’s Extreme Makeover”. Retrieved May 21, 2011 at: ttp://www. businessweek. com/magazine/content/09_43/b4152036025436. htm McNamara, Carter (November 19, 1996) Free Management Library, title of article: “Guidelines for Organizational Design”. Retrieved May 21, 2011 at: http://managementhelp. org/org_thry/design. htm. Ricadela, Aaron (February 16, 2011). Bloomberg Business Week, title of article: “Dell Jumps After Company Gains in Data-Center Market”. Retrieved May 21, 2011 at: http://www. bloomberg. com/news/2011-02-16/dell-jumps-after-profit-tops-estimates-company-makes-data-center-headway. html.