DELL CASE STUDY

A report that explains the success story of Dell cooperation

through organizational behavior theories.
Contents
INTRODUCTION...........................................................................................................................................1
IDENTIFYING THE ASPECTS OF HIGH INVOLVEMENT MANAGEMENT CONTAINED IN THE SOUL OF DELL
VISION STATEMENT.................................................................................................................................1
HOW DELLS APPROACH TO GLOBAL MANUFACTURING REFLECTS AN AWARENESS OF CULTURAL
DIVERSITY ISSUES....................................................................................................................................1
ADVANTAGES OF CULTURAL DIVERSITY AT DELL.................................................................................2
THE IMPORTANCE OF GLOBALIZATION IN DELLS GROWTH STRATEGY...................................................2
THE PROBLEMS THAT MIGHT ARISE DUE TO GLOBALIZATION FROM A FILM THAT IS DEDICATED TO
DIRECT CUSTOMER SALES.......................................................................................................................3
ANALYSIS OF STRATEGIC IMPORTANCE OF LEADERSHIP AT DELL...........................................................3
HOW THE LEADERSHIP THEORIES DISCUSSED IN E BOOK APPLY TO DELL...............................................5
AN ILLUSTRATION ON HOW DELLS MEETING AND COMMUNICATION PROCEDURES WOULD RESOLVE
CONFLICTS WITHIN THE ORGANIZATION.................................................................................................5
HOW CAN THESE MEETINGS RESOLVE CONFLICTS WITHIN THE ORGANIZATION?..............................6
STRATEGGIC ANALYSIS OF THE IMPORTANCE OF DELLS NONHIERARCHICAL STRUCTURE......................6
ASSESSING HOW DELLS STRUCTURE IS REFLECTEDIN ITS ORGANIZATION..............................................7
A REFLECTION ON HOW DELL HAS BENEFITED FROM THE MATRIX STRUCTURE.................................7
HOW WELL HAS DELL MANAGED CHANGE..............................................................................................7
CONCLUSION...............................................................................................................................................8
REFERENCES................................................................................................................................................9
INTRODUCTION
Dell Inc. is one of the successful computer companies in the world. A college student dream of
developing a computer selling company became one of the biggest economic business players in the
world. Therefore, this essay will answer and explain questions of Dells integrative case study by mainly
focusing on organizational behavior theories such as, leadership, globalization, cultural diversity,
communication and organizational structure.

IDENTIFYING THE ASPECTS OF HIGH INVOLVEMENT MANAGEMENT

CONTAINED IN THE SOUL OF DELL VISION STATEMENT
Dells vision is based on their mission statement. Which states that the organization is committed at
delivering a quality experience at a great value to its customers. Dells management experts to achieve
this through open communications and building effective relationships with customers and suppliers
(Fisher, 2004). Below are some of the policies used by Dell that shows high involvement of management

A. SELECTIVE HIRING
 When hiring employee’s dell goes for the best. In their vision statement the plan is to
offer great value to customers therefore having the best employees in the market is
one of the ways to achieve this.
B. TRAINING AND DEVELOPMENT
 The company believes in continuous improvement and growth therefore investing in its
employees through job learning, skill adjustments, and coaching is one of the core
values of making their vision statement a reality.
C. DECISION MAKING POWER
 Dells model believes a nonhierarchical leadership style rewards are not based on
positions rather work rate. This helps Dells leaders to be closely involved, aggressive on
work, responsible and accountable.
D. Strong communication approach
 Dells communication system is another way that shows high involvement of
management. Dell conducts townhall meetings once a month but also employees are
given a chance to speak to any leader about a topic this shows how omitted Dells
management is towards employee success.

HOW DELLS APPROACH TO GLOBAL MANUFACTURING REFLECTS AN

AWARENESS OF CULTURAL DIVERSITY ISSUES
Dell is one of the companies that is a giant in global manufacturing. Dells global business operations are
found in 180 countries. It manufactures in 25 locations and has more than 40 distribution and
configuration centers.

According to Lawton (2006), Cultural diversity in the workplace is hiring employees from all sorts of
different backgrounds. This sort of hiring is regardless of race, religion and culture.

ADVANTAGES OF CULTURAL DIVERSITY AT DELL

A. Cultural diversity can increase productivity levels
 A diverse company like dell leads to greater productivity. Dell is able to gather different
talents from 180 countries to work towards a common goal.
B. Cultural diversity can increase creativity
  Another advantage of a diverse workforce Is the increase in creativity among teams
which also goes hand to hand with having more diverse set of solutions to specific
problems.
C. Cultural diversity can increase profits
 Increased cultural diversity in the workplace can lead to increased profits in the
company. In 2009 Forbes conducted a survey and found out that another reason why
dell might be successful is its diversity at senior management level.
D. Cultural diversity can improve employee engagement
 There cannot be any other best way to learn about other cultures and ethnicity than
from your colleagues coming from different backgrounds than your own.

In short Dells approach of global manufacturing has helped in developing cultural diversity issues in the
working environment in different ways as explained above.

THE IMPORTANCE OF GLOBALIZATION IN DELLS GROWTH STRATEGY

Globalization is the speedup movement and exchange of human beings, goods and services, capital,
technologies and culture all over the planet (Hill,2000). Below are some of the major important aspects
of how globalization has helped dells growth strategy.

A. Cheap labor
 Labor prices vary in different states and countries. Dell has offices in countries like
Malaysia, China, Poland, India, Ireland, Brazil and South Africa. A survey conducted by
the world bank financial department shows that the united states has the highest
employee salary expectancy followed by Great Britain then France. Investing in other
countries like Asia helps Dell to produce high quality products at a lower price reducing
the expenditure cost.
B. Reducing competition pressure
 In the united states dell competes with companies like IBM, Acer, Hewlett Packard and
many more. Even though Dell still stands out as the biggest of them all, competition is
stiff and tough. Expanding and Selling outside the united states means new customers
and new competition. Investments in Asia and some parts of Africa has made them to
have complete control as competition in those parts of the world is not as tough as that
in the USA helping Dells growth strategy to work to their advantage.
C. Different Rules and regulations
 Doing business outside the united states means different rules, regulations and
cultures. In some countries like Malaysia the governments business rule is to build a
free trading economy towards big investors. This has helped companies like Dell to
enter into the market freely without a lot of implications from the government or
industry. Dell is welcomed in Malaysia and a report shows that the taxation rates
imposed on them is 2 times lower than that of their home country the united states
since the government’s policy is to allow foreign companies help increasing
employment and fasten technological development in the country.
THE PROBLEMS THAT MIGHT ARISE DUE TO GLOBALIZATION FROM A
FILM THAT IS DEDICATED TO DIRECT CUSTOMER SALES
As earlier defined globalization is the movement and exchange of all things around the world. But like
many things globalization also has its setbacks on films like dell who perform based on direct customer
sales. Below are some of the setbacks that Dell has experienced due to globalization.

A. LACK OF ECCOMERCE
 The internet has simplified business in a lot of ways. In the united states, Amazon ships
its products to the customers house helping the customer to skip the process of going
to the store. Instead he can purchase a Dell laptop on amazon and it will be delivered in
within two days. Unfortunately, this simplicity of life is not found in all continents
around the globe due to differences of financial and technological conditions in
countries. Companies like Dell have been given a chance to grow through globalization
but find it difficult to make direct sales to customers as in some continents like Africa, E-
commerce is very behind. Therefore, it simply means Dell needs to have physical
warehouses and stores in order to make sells which is a challenge (Kumar, 2004).
B. High investment costs
 Globalization presents challenges for companies which rely on direct customer sales
like dell. This is so as direct sales requires substantial upfront capital or infrastructures,
and other services. In developing countries, the situation is worsened as roads,
electrical grids, internet broadband, water and sanitation may need to be upgraded
from scratch. In adition sometimes environments might have the market, but to retain
managers who have the expected skills might be difficult (Kumar, 2004).
C. Armed hostilities, terrorism, natural disasters, can harm direct customer sales business
 Armed hostilities, terrorism, natural disasters whether in the united states or other
countries can cause damage or disruptions to suppliers and customers. In some
instances, they create political or economic tensions which harms businesses as well. In
recent years tornadoes in Tennessee, wildfires in California and typhoons in the
Philippians has disrupted Dells operations in those areas causing reductions in sales,
earnings and productivity (Kumar, 2004).

ANALYSIS OF STRATEGIC IMPORTANCE OF LEADERSHIP AT DELL

Leadership serves crucial functions to the success of the company. For a company to act, respond, or
hesitate it is all because of the decision of management. At Dell Inc, Michael Dell is The Chief Executive
officer, Jeffrey Clarke is the chief operating officer and Allison Dew is the Chief Marketing Officer and the
list goes on from top officers to the employees. While organizational talents and capabilities are
important for the growth of the company it is the importance of leadership that harnesses individual
efforts. There by below are some key points that show how dell has benefited from leadership.

A. Communication
  It is the responsibility of leaders to communicate the vision and the mission to their
employees. When the communication is clear enough leaders encourage their
subordinates to act for the actualization of objectives.
 One on One; This is a policy implemented by Michelle Dell himself. The idea is
that any employee can meet with any leader in the company. The employee
just has to follow the proper scheduling and request. Hunter a top manager of
dell says that he alone conducts about 4 or 5 meetings with employees on their
request daily.
 Answer first; In this technique leaders are encouraged to present a problem
and -an answer before going in explanations on how their solutions resolve the
problem. If everyone agrees with the answer the meeting is over saving
employees time hence boosting morale for busy people.
B. Morale
 Leadership boosts staff morale as you win their trusts. Employees gain confidence that
their leaders trust their abilities on the company’s mission and vision.
 In 2001, the company of Dell stopped growing. Its effects were so vast as 4000
employees were laid off. In order to win back the morale of the remaining
employees Kelvin Rollins who was the CEO back then together with Michael
Dell came up with what was called the Soul of Dell. Below is the mission
statement presented to the employees and I quote

“We believe our continued success lies in teamwork and the opportunity each
team member has to learn, develop and grow. We are committed to being a
meritocracy, and to developing, retaining and attracting the best people,
reflective of our worldwide market” (Rollins,2001).

This statement was placed into exercise and slowly morale rose and Dell is
regarded as one of the best companies to work for.
C. Vision

 Another importance of strategic leadership at dell is the vison implemented by Michael

Dell from the start. Mr. Michael dell made it clear in one of his letters sent to the
stockholders that the company was going to forgo profits so that the company can
focus on growth.
D. Growth

 Great leaders create a good working environment where others can grow. They are
always open to new ideas and innovations.
 entrepreneurial culture; where by employees are encouraged by leaders to
take measured risks through their teams by implementing new ideas on their
work. If it works the team is greatly rewarded by management while if it fails
its back to the drawing board with no penalties for trying.
 Training and development; Top leaders believe in training and developing the
employees, helping them to improve their talents and experience since
 consistent Improvement and growth is one of the main goals in the soul of
Dell.

HOW THE LEADERSHIP THEORIES DISCUSSED IN E BOOK APPLY TO DELL

Leadership theories can be defined as ways of how leaders got their traits, skills, and talents to be able
to manage a group of people. We have to understand that not all managers are the same and poses the
same skill. This is due to different theories of how they obtained or use their leadership. Below lies some
of the examples at Dell that shows some of the leadership theories that apply at the company Forbes
(1992).

A. Situational Leadership
 The situational leadership theory proposes that no one leadership style supersedes
others. Just as it is named, the theory implies that leadership depends with the
situation imposed at that time. This statement simply means that how a leader reacts
to a problem depends with how the problem has arrived.
 After experiencing growth challenges in 2001, Dell leaders which includes
Michael Dell and Kelvin Rollins decided to come up with the soul of dell to turn
the situation around by changing the cooperate culture (Forbes ,1992).
B. Behavioral Theory
 In this theory the focus lies on the specific behaviors and actions of the leaders rather
than their traits and characteristics. In short, the theory suggests that for one to be an
effective leader, one has to go through the process of learning different skills and
learning from mistakes. It further goes on by suggesting that individuals need three
skills to lead followers namely; Technical, conceptual and human skill. By technical, the
leader has to know the process. Human skill is the social and interaction of the leader
and employees. Conceptual leadership, enables the leader to come up with ideas that
help I the day to day running of the organization.
 In its first years of operation Dell experienced growth challenges. Dell was
caught with excessive memory inventory and apart from that Dell its
development line produced more sophisticated technology than its clients
needed. Through behavior leadership theory dell leant from its mistakes makes
sure to always have not more than the inventory they need but also paying
close attention to only produce what the customers need (Forbes, 1992).

AN ILLUSTRATION ON HOW DELLS MEETING AND COMMUNICATION

PROCEDURES WOULD RESOLVE CONFLICTS WITHIN THE ORGANIZATION
At Dell meetings and communication procedures are the order of the day. All managers are expected to
hold townhall meetings at least once a month. The meetings are held to discuss projects and to obtain
employee feedback as soon as possible. The meetings are not only conducted monthly but team leaders
also conduct their own meetings with their teams every day for 15 minutes before they start work. The
meetings are conversations of both sides both leaders and employees, hunter says that one of the such
meetings is a one on one conversation where by the employee is free to meet any leader of choice as
long as the employee follows the right procedures. Hunter alone is involved with about 3 or 4 meetings
with employees a day.
HOW CAN THESE MEETINGS RESOLVE CONFLICTS WITHIN THE ORGANIZATION?
A. Improves employee opinion freedom
 At dell Inc., Hunter alone conducts 3 to 4 meetings a day with employees that do not
report directly to him. This approach gives employees the freedom of reporting all the
challenges they experience whether being those that concern their supervisors, fellow
employees or the working environment.
B. Leaders are always under the law of the company
 These meetings help in conflict resolution since employees have the freedom to report
a leader who abuses power. Therefore, with this system in touch, leaders always stay in
line making sure that they should not abuse employees, but work best for themselves,
employees and the company.
C. QUICK RESOLUTION OF CONFLICTS
 The meetings conducted at Dell are done daily by team leaders in the first 15 minutes
before work. This helps team leaders to deal with conflicts at an early stage before they
get out of hand.

STRATEGGIC ANALYSIS OF THE IMPORTANCE OF DELLS

NONHIERARCHICAL STRUCTURE
A nonhierarchical leadership structure is a decentralized authority that its decisions spread across a flat
organization instead of a peak vertical organization. According to UNESCO, a nonhierarchical structure
ensures that the organization works best at supporting employee creativity (Kanji, 2002). Below are
some of the importance of using a nonhierarchical structure at Dell.

A. Employees are analyzed based on their skills and talents

 Dells nonhierarchical structure is important since it helps the top management to
analyze employees based on skill and talents instead of job titles. This creates a
competitive environment for everybody as even the least positioned employees have
hope of success in their careers.
B. It increases creativity and innovation
 Since employee rewards are mainly based on work rate, skills, and talents employees
are motived and are always busy trying to create something new that can help the
company’s goals. At Dell well taking well measured risks is encouraged by management
and if employees fail penalties are not given therefore increasing creativity, innovation
and morale.
C. Nonhierarchical structure helps Dell to attract top employees
 The rewards, the freedom to report to any manager of your choice, the employee
development that is followed because of nonhierarchical structure attract employees
around the globe to work for Dell. The benefits are just so huge that in 2004s survey
Dell was voted as the most employee favorite company by the Washington post.
D. Employee Loyalty
 The nonhierarchical structure chosen by management favors employees. Therefore,
there are only few companies that satisfy employees like Dell does. In return employees
are willing to work for the company for years. This is an advantage to Dell as it will have
experienced employees, and those that have become a company favorite. Employees
feel they own part of the company hence helping Dells success story to continue.
ASSESSING HOW DELLS STRUCTURE IS REFLECTEDIN ITS ORGANIZATION
Organizational structure can be defined as the concept of hierarchical subordination that are there to
cooperate and contribute in the service of a common goal. In short it is the hierarchical structure that
defines the position of an employee in the company. Dell uses the matrix organizational structure. It is a
large organization that has a large number of people that need to work in different structures. It is most
useful for appointments especially by companies that work continuously on projects (Greenberg, 2002).

A REFLECTION ON HOW DELL HAS BENEFITED FROM THE MATRIX STRUCTURE

A. The matrix structure makes Dell to be able to dedicate team selection based on merit of their
work and tasks.
B. With the matrix structure in the organization Dell is able to build a standard recruitment of
professionals allowing more opportunities for the people.
C. It helps project managers at Dell to be able to complete on time and within the planned budget.
D. It leads to the appointment of key people since a part of a team also works in the flame work of
another team though cost effectiveness as projects are kept important and successful to Dell
corporate culture.

HOW WELL HAS DELL MANAGED CHANGE

Right from the start Dell has been a success story. Even though it’s a successful company it had to fight
challenges by managing change in the company. Below lie some difficult times for Dell but with good
management they managed to change their situation for the better.

A. Dells excess inventory in the 1980s

 One of the major challenges of Dells history was what happened in the 1980s where
dell had excess memory inventory which violated the company’s credo. The situation
needed change and as a result the company responded by refocusing on their core
values by having only the required inventory and avoiding all the steps that can lead
them into the same situation again.
B. Dell computers stops growing in 2001
 Unexpected change in the business world where by the internet bubble burst made Dell
to lose customers therefore making its stock market price to drop from $58 to $16 a
share. This led to 4000 employees being laid off. Dell managed this change by coming
up with the highly respected Soul of Dell. The soul of Dell was about changing the
cooperation’s culture into a win at all costs business model. Today Dell celebrates as
the fourth company in the USA as an employee job secured company.
C. Dell clears its inventory between 1993 to 2004
 The mistake of keeping excessive inventory and internet bubble bust made Dell to think
outside the box. In 1993 Dell carried 20 to25 days inventory in its warehouses. By 2004
Dell had no warehouses. The company worked hard that in that same period it
assembled 80 thousand computers a day. Speed is crucial in such operations and the
company adapted to the speed of the internet business hence managing change.

CONCLUSION
In conclusion Dell Inc, success has been made possible by good leadership theories. On their road to
glory the company has experienced many setbacks but has been able to bounce back by correcting its
mistakes and making sure there are never repeated again. It strongly believes in employee
development, growth and global manufacturing to promote cultural diversity. Michael Dells dream is a
huge inspiration to many startup companies in the world as it strongly follows organizational behavior
theories for its success.
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