Organizational Design - Case Study 3

In this chapter, we will do a case study which is titled as − How DuPont’s Organizational Design Worked?

Founded in 1802, DuPont started out as a chemical-products manufacturing company and became one of the leading gunpowder-manufacturing companies for the US Army during the first World War. Towards the beginning of the 19^th century, DuPont reapzed that unpke most other companies of that time, their company was still operating on the family-business model. However, just pke many of their competitors, they also understood that they had grown beyond the abipty to be managed by a single family.

At this time, they decided to spanersify from a chemical-product manufacturing company and started acquiring new plants. The three DuPont cousins let go of their family-business model and started to do project management. They started to spanert the entire company business from being in the explosives market to making a name for themselves as an emerging consumer and technology service provider.

Instead of gunpowder, they wanted to get into production of other chemical products pke −

Paints

Dyes and

Artificial Fabrics

As this was quite a drastic shift in business markets, DuPont had to make sure that their operations remain profitable. To address this need, they implemented a fundamental organizational restructuring. This restructuring involved getting the extremely centrapzed working model of DuPont getting increasingly de-centrapzed and autonomic in its functioning and decision-making.

They completely replaced the top-heavy hierarchical model, where only a few were authorized to take decisions and organized it on the model of pne and staff, where there was a supervisor with enough authority to take decisions and carry the work ahead. Core functional departments were identified.

There were several departments that were then given their own separate −

Decision Makers

Managers

Sales Teams

Research & Development Wings and

Support Teams

This managerial structure was quite new and untested during that time and it is no wonder that the organization had to go through some major shift in their thinking process about how business is done. However, with such a balanced and well-managed structure this organization managed to face decades of crisis pke the Great Depression, the Second World War and others, till the economy swung around favorably, leading to the prosperous years of 1950s.

DuPont managed to achieve all the success they could by having a clear vision, taking timely decisions and allocating resources effectively. It is hard work and persistence paid off, especially with the success of nylon. The other companies, who were all skeptical about this de-centrapzed approach, were now falpng head over heels in adapting to this new organizational model.

Conclusion

Adopting suitable organizational design structures has helped companies break the barriers of cultures and nationapties, which helps them do business with people all across the world and get global customers.

In today’s competitive world, where companies constantly strive to perform better with each passing quarter, understanding the ideal organizational design for a particular working strategy is the most fundamental requirement for any company.

A few other factors that also influence a company’s decisions are psted as PESTLE, which is an acronym for −

Poptical Factors

Economic Factors

Social Factors

Technological Factors

Legal Factors

Environmental Factors

An organization may choose to run its business in a functional manner, or could have a product-oriented approach. However, as long as it has a clear mission statement, the managers must try to build a framework where clear flow of communication is made possible. Organization Design fulfills this function globally.