Analysis of the Dynacorp Case Through Political Lens Essay
Analysis of the Dynacorp Case through political lens Dynacorp is a worldwide information systems and communications business. In 1990 the company started to have fewer earnings than in the past, so the CEO tried to change the design of the company to run better. In this paper, I analyze this organization though the political lenses to better understand how changing the structure can help improve revenue and quality. As discussed in the book, the political lens sees the organization in terms of conflicts of interests, power, and goals among individuals and groups within the organization.
The way to understand the dynamics of political conflict is to understand who has power, from where that power comes, the basis of the power and how much power the different parties in the organization have. “In the political perspective, the roots of conflict lie in different and competing interests, and disagreements require political action, including negotiation, coalition building, and the exercise of power and influence.
” The key concerns of players in the political perspective of the organization revolve around who defines the problems and the agenda, and where they get the power to do so; who the parties advocating solutions are, and why they are advocating such solutions; how a particular group is to procure an outcome or outcomes that are favorable to its own interests (Ancona et al. , 2009: M-2, 33). Stakeholder, Power, Interests At the very top of the organizational hierarchy there is the CEO and the functional heads, who are executive vice presidents representing marketing, manufacturing, and engineering.
These constitute, individually, four different sets of stakeholders, each with their own interests, as well as power. The CEO has his interests in making Dynacorp more competitive and profitable, as reflected in his listed challenges: costs that are high, product development cycles that were slow, and value creation for customers that needed to be elevated. These are some of his most important motivations for instigating such actions as forming the task force to draft recommendations on the design of the organization.
These recommendations are to be presented to senior management. The CEO’s power is immense, and covers all of the functions and operations of the firm. The powers of the function heads, on the other hand, are likewise immense, but are capped by the power of the CEO, and are limited directly to their own functional groups, even as they are able to influence company decisions and strategies as members of senior management. Their key interests obviously lie in the areas of advancing the interests of their own functional groups and protecting their own turfs.
These are the underlying interests that inform their explicitly-stated interests [(Ancona et al. , 2009, pp. M2-28- M2-29)]. Ten groups within the engineering division constitute their own sets of stakeholders, and there is the grouping too, between the technical and the technical/management people on two parallel tracks, that can be construed as forming their own sets of stakeholders. Their obvious underlying interests are in protecting their own turfs too, and advancing their own agenda for the firm.
Dynacorp being a company focused on technological innovation, the engineering function and the 10 groups within hold immense power and influence, being the providers of the technological innovation that is at the heart of the company’s competitive edge (Ancona et al. , 2009, p. M2, 29). The manufacturing function is geographically-based and is also of considerable size, reflecting the fact that Dynacorp has taken on the strategy of intensive in-house manufacturing as opposed to relying on subcontractors to do the manufacturing for them. The manufacturing plant managers are the ground-based members of this large interest group.
Their explicitly stated interests are along the lines of making sure that manufactured products meet high standards of quality. The underlying interests behind these avowed interests for the good of the firm are of course tied to protecting the turf of the plant managers and the manufacturing employees, who obviously will be hurt by movements of manufacturing outside of the plants and onto subcontractors in the Asia Pacific, who may in some cases provide the same or higher quality products manufactured at costs that are competitive to the costs of manufacturing them in-house.
The power of this function is somewhat limited by the fact that they are measured in terms of efficiency and capacity utilization, and the function as a whole is treated as a cost center (Ancona et al. , 2009, p. M2, 29). The marketing function on the other hand also took on the role of the sales function, divided into six regions in the US, and one international group focusing on sales and divided by country. Customer intimacy drives marketing function operations, in particular with the technical people in target organizations, with whom sales reps developed
strong relationships. Technical support was given strong emphasis too. The shift away from technical-led purchases in firms to business-led purchases meant Dynacorp marketing had to adjust to improve relationships with business people, taxing customer support and introducing a host of new challenges- greater emphasis on marketing pitches, and the need to get new products out to the market with no major malfunctions and bugs, among others. There was also an increased demand for systems integration between Dynacorp’s systems and the customer systems.
The explicit interests of the marketing function is of course to make sure that the top line, sales, remains healthy in all geographies and markets. This of course has its roots in marketing wanting to preserve its own turf and to highlight its own importance as a key function within Dynacorp, in possible competition with the two other key functional groups for relevance in the face of possible changes in organization design (Ancona, et al. , 2009, p.
M2, 29). Product managers and cross-functional teams constitute a kind of class of stakeholders within the firm, and cuts across the different functional groups, but as the case notes, the cross-functional teams, and those teams that are focused around certain products and led by a product manager, have members that are often evaluated not on their performance in those teams, but within the context of their competence in their own respective functions.
The product managers, as stakeholders, meanwhile, have their interests firmly along the line of bolstering their own capabilities and their own abilities to influence decision making around products that they pursue, even if their efforts are not always successful, and rewarded. The strong functional orientation of Dynacorp prevents such product management teams and cross-functional teams from ever getting the kind of power and influence necessary for them to be successful.
The line managers and the functional managers in each of the three core functions basically hold more power and influence by dint of the strong organizational and traditional inertia present in Dynacorp, which had worked along such functional groupings for a long time. It is part of the firm DNA [(Ancona, et al. , 2009, pp. M2-29 – M2-32)]. * Assessment of Relationships among Stakeholders It is obvious that coalitions exist along functional lines, so that marketing people stand up for one another, and so do manufacturing and engineering people.
In cross-functional teams, for instance, people within functions resolve conflicts and work-related input differences among themselves, and go to cross-function team meetings with a common front. Product managers, meanwhile, are all too aware that functional managers determine performance evaluations of their own people more than they do, or more than managers from any other function, underlining the power balance and the precarious nature of the relationships among the different functions.
These are all reflective of the kind of organizational structure and the kind of power relations that the functional organization design has wrought through the years at Dynacorp [(Ancona, et al. , 2009, pp. M2-28- M2-32)]. The nature of the relationships among the different stakeholders can further be gleaned from the way they point to each other as the cause of major and minor problems in workflow, in the procurement and fulfillment of business, in interactions with customers, in product design, and in similar such other matters.
Product managers, as earlier discussed, point to line managers having more teeth in employee evaluation of their own staff in cross-functional projects and product-centered team undertakings. Manufacturing and engineering both point to marketing as the culprit behind thinning margins for products, owing to how marketing basically gives large discounts to customers to be able to meet sales targets, regardless of how deep those discounts cut into margins.
Such jeopardizes manufacturing and engineering efforts to optimize design and manufacturing to optimize product development and manufacturing costs, because whereas those two are intent on lowering costs to improve margins on sales, marketing is intent on lowering margins to drive up revenues on the other end. Meanwhile, between manufacturing and engineering lies a large gap brought about by conflicting aims between the two groups as well.
Engineering’s focus is on design, while manufacturing gripes that such focus does not take into consideration manufacturing aspects that can for instance bloat manufacturing costs. Manufacturing complains that engineering does not factor in common elements/parts when designing products. Engineering, on the other hand, complains that marketing comes up with too many ideas and changes to product design, which jeopardizes design efficiency and viability from the technical and commercial standpoints. Everywhere you turn, along functional lines,
there are conflicts of interests, as can be gleaned from the above mapping of gripes and problems presented by different functional managers with other departments and functions within the organization. Within functions too, managers and employees down the line, as stakeholders within the functions, complain of such issues as having too many layers of management crippling innovation, communication and change. Clearly along functional lines and within functions there are major conflicts of interests among the stakeholders here identified [(Ancona, et al. , 2009, pp. M2-28 – M2-32)].
This is not to say that all is conflict among divisions. There are large examples of cooperative behaviors on the level of management and especially senior management across functions too, as typified by quick deployments of engineers to product teams in need of them, and quick recalibration of manufacturing lines to accommodate surges in product demand (Ancona, et al. , 2009, p. M2-32). * Assessment of Individual Stakeholder Power- Type, Source, Amount The manufacturing managers, headed by the external vice president and head of manufacturing, wield different types of power, owing to the nature of the work.
One type of power draws from the large installed capacity and manufacturing capabilities of Dynacorp, in key regions across the United States, that need to be utilized. This is a kind of financial power owing to the fact that the manufacturing facilities represent sunk costs and an organizational inertia that is difficult to reverse. This is an investment-derived power, and is quite large. The power is also sourced from the culture within the company that has relied on vertically-integrated product development from engineering to manufacturing to sales and marketing all within the company, and done along functional lines.
Viewed another way, the power comes also from manufacturing being a pillar of the company’s backbone, as one of the three functional legs on which the entire company stand on [(Ancona, et al. , 2009, pp. M2-28- M2-58)]. The engineering personnel, from the cadet engineer all the way to the external vice president heading the functional group, wield similar kinds of power as manufacturing, even as their sources are different in one radical aspect.
Whereas manufacturing source some of their power from the fact that the manufacturing facilities constitute sunk capital costs that need to be utilized and are therefore indispensable in some respects, engineering on the other hand derives or sources its power from the knowledge capital that it wields, non-tangible in nature and is made up of the knowledge stored in patents and implicit knowledge held by the design engineers, especially those who have been with the company for a long time.
This vast knowledge informs design and innovation, and without this the company has nothing to manufacture and market. The type of power is not physical, but it can be said too that it is something that the company likewise has made considerable investments over time, reflected in the engineering payrolls, and in the investments that have been made in patents creation and buildup, as well as in the retention investments for key engineering talents that make up its engineering teams.
Among the three functional legs that prop up the firm, this can be said to be the most formidable, it being the source of the company’s competitive advantage, and the key source of its innovations. This power is very large [(Ancona, et al. , 2009, pp. M2-28- M2-58)]. Marketing’s power likewise derives from the fact that it is a key pillar of a proven if creaking organizational design that has served Dynacorp’s vertically-integrated business model well for many years. It is a kind of inertial, organizational power where the firm has come to rely on marketing to provide the revenue numbers and to connect with customers.
This connection with customers and this large and focused functional effort to market and sell the company’s products is the source of its power. Part of this also stems from the expertise that the functional group has developed through the years in that line of work. The historical connection with customers is a large power, without which Dynacorp will have to start from scratch in terms of building up revenues and developing a dedicated customer base [(Ancona, et al. , 2009, pp. M2-28- M2-58)]. . Getting “Buy-In”
Given the large entrenched interests all potentially to be affected by changes in the organizational design, all of the major stakeholders are expected to present stiff opposition of varying degrees to any such proposed changes. Product managers, on the other hand, being by default beneficiaries of changes that allow for greater flexibility and cooperation among the different functional groups, are expected to support any proposed changes to the organizational design. As discussed in the case, there are several
alternative designs that have been studied and included in the recommendations, without agreement on which of the proposed designs is best suited for Dynacorp. Each of the proposed designs impact the different stakeholders in varying ways. For instance, product-focused and customer-focused designs, as well as the new front/back design, all entail the strengthening of cross-functional teams in order for the different functions/disciplines to work together on behalf of a product or customer.
The back/front design, meanwhile, from a political point of view concentrates power in the hands of marketing and support, and relegates manufacturing and engineering to secondary, follower roles, something that will of course encounter stiff resistance from those two latter groups. The heads of the three functions, meanwhile, with backing from the CEO, and as the key stakeholders of interest, may be suitable champions who will buy into any of the proposed organizational designs that have been considered in the case.
Meanwhile, for all of the stakeholders, including the product managers and those who at present are happy with the functional organizational design, the path of least resistance and of greatest buy in is the proposed organizational design where the functional arrangement is preserved, while the cross-linking mechanisms are fortified. This can be the organizational design that can work for all of the stakeholders involved, presenting change that responds to the needs of the firm, while at the same time preserving the strengths that have served Dynacorp well in the past and still work at present.
Finding Allies, Coalition-Building More coalitions at middle and upper management levels can facilitate the buy-in process for any proposed change to the organizational design. On the other hand, proposed changes have to be in line with the political positions of the involved stakeholders. This means preserving their interests, while at the same time addressing the most serious concerns and shortcomings of the current organizational design.
At the level of senior management, stakeholders can be made to buy into the changes if their performance evaluations are predicated on achieving business and organizational targets, and if they see that the proposed organizational design is the best enabler for achieving those targets. Product managers being natural allies for pushing for changes that strengthen product and cross-functional teams and up their power and influence within the organization are also natural allies that can be further utilized to advance the cause for change * Conclusion
Even in the best case, the changes that are being proposed to organizational design will cause upheavals across all functions and across many levels in each of those functions. The changes will not come without stiff resistance from inertia and from the perceived erosion of power by employees in all of the functional groups. On the other hand, senior management and product management stakeholders will want to see change, if it is made clear that changes are necessary to achieve organizational and business targets, and if their performance evaluations are tied to achieving those targets.
On balance, many factors seem to hinder change, but larger and more powerful forces compel change. These latter forces and factors will prevail (Ancona, 2009, pp. M2-28 – M2-58). References Ancona, D. , Kochan, T. , Scully, M. , Van Maanen, J. & Westney, D. E. 2009. Managing for the future: Organizational behavior and processes (3rd ed. ). Cincinnati: South-Western College Publishing. Dynacorp Case. 2009. In D. Ancona et al. Managing for the future: M-2, 97-102. Cincinnati: South-Western College Publishing