Acme and Omega Electronics

1. Why did Omega discover the design problem, but not Acme?
Omega followed an organic structure where there was high level of coordination
between various departments. Jim Rawls did not believe in organizational charts and
the management team made decisions as a whole. When the prints arrived, all the
department heads sat down together to discuss the project. The organic structure
helped them discover the error in design.

Whereas, Acme had a mechanistic structure. Different departments worked on their

own tasks and they had little contact with one other. Since departments were only
working on what was assigned to them, they failed to look at any defects in design.

2. Why Acme was offered the final order even though Omega helped to rectify the
design?
Omega followed an organic structure which allowed it to adapt to a dynamic
environment. Even though it could complete the order before time, it could not cut
down on the cost of production. However through extensive cost cutting efforts,
Acme could cut its unit cost by 20%. Hence, Acme was awarded the final contract.

3. How do you compare the organizing logic of Omega and Acme?

Omega had an organic structure. President of Omega, Jim Rawls did not believe in
organizational chart. He believed that organization was too small to have a proper
organizational structure. He believed in informal communication within the
organization. Every department worked together and contributed to decision
making.

Acme followed a mechanistic process. There were different departments having well
defined responsibilities. There was very little communication between the
departments. They worked at their own pace. However, due to the proper structure
in the organization, they could cut the cost of production which helped them in
getting the contract.

4. What are your key learning from this case?

Case shows that organizational structure is very important for an organization. It
decides the competencies of the organization. An organic structure helps in better
decision making and helps to catch defects and errors quickly. Whereas, a more
formal structure helps in cost reduction of the production process.