Case 7.0
Toyz, a seven-year-old manufacturing company in a small valley town, produces three plastic toy lines that it judges will be "hot" items for children. In their first two years, even though start-up costs were high, the company did well because it judged the unpredictable market well and even set the pace within its region for popularity of a new bubble maker. By the third year, however, similar, cheaper bubble makers were commonly imported from Taiwan, and the owner's judgments on other "hot" items were not on target; consequently, Toyz operated at a loss for two years. Three years ago Toyz added a small new product line that it thought might bring some stability to the company. In addition to the "hot" items, Toyz added a small "cash cow" line of plastic furniture for children. Last year the furniture line constituted 25% of total revenue, and Toyz would like to keep the line at about 25% of total revenues.
The design department consists of five employees who are highly educated and held responsible for safe engineering of a product that can realistically be manufactured. Toyz designers gear up annually in January for that year's Christmas season. As professionals, they make a point of keeping informed of government standards that are occasionally issued.
Some organization leaders feel that marketing is missing the boat by catering more to Toyz's end users rather than to the company's wholesale buyers. Toyz deals with only two major distributors to handle all warehousing and distribution. Frequently their orders are not filled correctly because sufficient quantity cannot always be produced on time.
Although top management is giving some consideration to outsourcing part of its manufacturing operations overseas (where labour is less costly), at present 80% of employees are in manufacturing. The manufacturing area is kept very clean, but the odour on the premises is so bad that many people in town will not accept jobs there even though entry-level pay is somewhat above minimum wage.
-Refer to Case 7.0. Place Toyz's manufacturing, marketing, and design departments in Perrow's framework for departmental technology. Then, on the basis of your analysis, make recommendations to management on any differences in how each of those departments should be managed.

Question

Quizplus · Accepted Answer

The Answer of Case 7.0
Toyz, a seven-year-old manufacturing company in a small valley town, produces three plastic toy lines that it judges will be "hot" items for children. In their first two years, even though start-up costs were high, the company did well because it judged the unpredictable market well and even set the pace within its region for popularity of a new bubble maker. By the third year, however, similar, cheaper bubble makers were commonly imported from Taiwan, and the owner's judgments on other "hot" items were not on target; consequently, Toyz operated at a loss for two years. Three years ago Toyz added a small new product line that it thought might bring some stability to the company. In addition to the "hot" items, Toyz added a small "cash cow" line of plastic furniture for children. Last year the furniture line constituted 25% of total revenue, and Toyz would like to keep the line at about 25% of total revenues.
The design department consists of five employees who are highly educated and held responsible for safe engineering of a product that can realistically be manufactured. Toyz designers gear up annually in January for that year's Christmas season. As professionals, they make a point of keeping informed of government standards that are occasionally issued.
Some organization leaders feel that marketing is missing the boat by catering more to Toyz's end users rather than to the company's wholesale buyers. Toyz deals with only two major distributors to handle all warehousing and distribution. Frequently their orders are not filled correctly because sufficient quantity cannot always be produced on time.
Although top management is giving some consideration to outsourcing part of its manufacturing operations overseas (where labour is less costly), at present 80% of employees are in manufacturing. The manufacturing area is kept very clean, but the odour on the premises is so bad that many people in town will not accept jobs there even though entry-level pay is somewhat above minimum wage.
-Refer to Case 7.0. Place Toyz's manufacturing, marketing, and design departments in Perrow's framework for departmental technology. Then, on the basis of your analysis, make recommendations to management on any differences in how each of those departments should be managed.

Case 7.0 Toyz, a Seven-Year-Old Manufacturing Company in a Small Valley Town