Does Process, Form, and Strategy make a business successful?
ADL enjoyed a pre-emptive market share originating from the late 1800’s, and became the leader of a growing management consulting practice during 60’s and 70’s. By the end of the 70’s and early 80’s they lost their dominant position as the market grew, and they continued to slide as the success of new companies tooled with contemporary technologies and skills, identifiable products, and a singular image gained market strength. ADL’s pride was in the freshness of approach to each case, the “Eureka” kind of solutions, and no repetitive job undertaking.
Work at ADL was problem oriented, technically based and highly customized. However, the company identity was fragmented and confused and did not have a formal organizational structure. A team of 5-15 people made a unit. There were 2-4 units per section and around 40 sections with $5-10m in revenues for each section. In 1954 ADL attempted to form into 7 divisions but this resulted in fighting over leads and capital resources.
ADL’s work force was highly innovative, with high morale and a broad range of freedom in work. There was no career ladder within the organization and titles meant little as new jobs allowed for a new hierarchical structure.
Strengths and competitive forces during 80’s
The market in the 70’s had started growing from $2b to $40b, and there were a lot of new entrants. As opposed to ADL, they focused on specific areas of management consulting and specialized in a few particular areas. The new entrants also had an effect of segmenting the market into core functional components. ADL was a broad-based non-specific product company, which allowed for capturing many business problems that arose as markets evolved. ADL enjoyed a very strong past, a vast knowledge base and a good R facility. The internal organization of company was totally flat which initially worked to their advantage. One major strength was the return of LaMantia to ADL as president, and the redeployment of his process thinking.
Main elements of new organization structure
ADL’s new structure allowed for vertical development and functional orientation. There were 7 directorates divided into three major businesses. Five of them were related to management consulting and were geographically structured. Inside of each directorate were three levels – director, senior consultant and consultant. The entire company structure was tied together with 7 common business processes. Each case would primarily belong to one directorate but would encompass different business processes, making it a matrix-type structure. The idea in creating a business organization structure was to have more accountability, identify specify goals and duties and improve resource allocation. Overhauling the financial area, as well as tightening the planning, budgeting system, and accounting system were additional initiatives implemented.
Providing experienced and knowledgeable people to solve company problems was ADL’s core business. ADL sold processes focused services ranging from strategies, customer service, supply chain management, information technology, manufacturing, finances, organization and innovation. It concentrated on various industries like chemicals, pharmaceuticals, health-care, automation and telecom. Its three core business units were management consulting (MC), environment and health services (EHS) and technology and product development (TDP).
Process thinking is identifying, categorizing, and prioritizing business functions, and linking the functions through their informational needs. A strategy is making use of, creating, modifying and tailoring the functionalities to achieve a certain goal. ADL divided its entire operations into 7 processes. The processes fit the ADL strategy by allowing the company to focus on its client relationships, HR and finances and by facilitating its implementation, while costing the effort in terms of its returns. The knowledge of a common process amongst functionality allows continuity and repeatability with skill-sets and identifiable goals.
Strategic options for ADL, Recommendation
The integrating strategies include a unified company image, cross selling and integration of the three business units, making the three business units into separate sister concerns, developing a cross-business synergy, product, and practice, and single a company strategy – a global industry practice. ADL’s strength lies in the vast and varied knowledge, which can be utilized across the three different business units. ADL should position itself as a company with a brand name identity, providing system-wide, varied and integrated solutions, and initiate processes for the cross selling and integration of its three business units.
Cite this Arthur D Little Inc
Arthur D Little Inc. (2018, Jun 13). Retrieved from https://graduateway.com/arthur-d-little-inc/