A dysfunctional company is a fast-growing company but its existence into the future is not guaranteed. It often develops bad politics internally, breakdown of communication, bad management, lack of commitment, and also there is no collaboration when working. There is low productivity and the company is often in crisis. What these companies need is a change in their organizational designs and also create a conducive environment that will enable creativity and innovation.
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My organization is Repron Manufacturing Services, which is an example of a dysfunctional organization. The organization deals with beauty products for ladies, there has been a proposal to manufacture and market men’s cosmetics. There is an argument whether to develop the line through an internal corporate venture by a virtual company or keep it within the organization. This has led to a lot of conflicts, too much internal competition, and the resources being tightly controlled.
Goold and Campbell (as cited in Robbins, 2007) have provided a framework for changing organizational designs, which involves nine tests: The first four known as fit tests; they are applied to determine whether the organization’s design is appropriate for the company’s strategy. Importantly, the company should change its design because it is inappropriate for its marketing strategy since the defined market segments do not give attention to each segment.
The other element is the corporate-level activities of this company; they should be stratified and be adequately structured. They should also make sure the major players in the company undertake their responsibilities well. There should be an examination of all other elements creating problems in the organization’s design and changes to be made, to improve the organizational design.
The other tests are known as good design tests, and ensure that the new design adopted is refined. Departments with unique cultures maintain them, communication is improved, and adequate governance is established, although flexibility should also be allowed in some situations. The good design test can be applied in our company to improve communication and good management (Robbins, 2007).
Looking at Repron, the argument is whether or not to launch the new product line through the internal corporate venture method or through the existing company. Internal corporate venture is utilizing new ideas within an existing business entity by transforming them into new ventures and commercializing them into new small businesses. The established business gives the new, direction, focus capital, market, and also a stable human resource base.
The advantage is that the small entity can grow to a big business empire and bring more profits than it would have done as a mere department in the old business. It allows the focus to be on one core venture hence better quality, there is access to a larger talent through new employees, and it also spreads the risk in business (Gummesson, 2002). However, this is risky because the new venture can fail or take long to develop leading to losses which either way would happen even if it was developed in the parent company though it would have been smaller. The new venture would also call for vibrant and effective marketing strategies.
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In conclusion, every business is a risk so I would opt for an internal corporate venture for the new line if it succeeds it would be more profitable and also it opens up more opportunities for the company. Also, the venture capital option is viable because the new line gains market through the already established business. Dysfunctional companies need to change their organizational designs to match their strategies otherwise they put their employees at risk of being jobless in case the company collapses.
Gummesson, E. (2002). Total Marketing Control. New York: Butterworth-Heinemann.
Robbins, S. F. & Judge, T. A. (2007). Organizational Behavior. 12th edition. MA: Pearson Education Inc.