Handbook para os trabalhos semanais

Prévia do material em texto

Católica Porto Business School
INTRODUCTION TO 
BUSINESS STUDIES 
Case Study Handbook 
 
Disclaimer: 
This Handbook - composed of several short case studies - was prepared by some of the Introduction to Business 
Studies team members, under the supervision of the course coordinator, and solely as a basis for class discussion 
and not as an endorsement or source of primary data. Its analysis can only be made considering the context and 
the timeframe it refers to and it is intended to be used as a basis to workshop discussion and not to illustrate the 
effective or ineffective handling of managerial challenges/problems. 
To order copies or request permission to reproduce materials, e-mail lrebelo@ucp.pt. The contents of this 
Handbook may not be digitized, photocopied, or otherwise reporduced, posted, or transmitted, without the author's 
permission. 
 
Contents 
Management and Managers ............................................................................................................ 6 
Ferespe .......................................................................................................................................... 6 
Queen Yachts International ...................................................................................................... 8 
Definition of Organization ........................................................................................................... 11 
Ramirez ........................................................................................................................................ 11 
Farfetch ........................................................................................................................................ 13 
Southwest Airlines .................................................................................................................... 16 
Organizational Models .................................................................................................................. 18 
FIAT .............................................................................................................................................. 18 
Indie Campers ............................................................................................................................ 21 
Liz Claiborne .............................................................................................................................. 23 
Environment .................................................................................................................................... 25 
Queen Yachts International .................................................................................................... 25 
Riopele ......................................................................................................................................... 26 
Design ............................................................................................................................................... 28 
Local Consulting ........................................................................................................................ 28 
Amazon ........................................................................................................................................ 30 
Structure .......................................................................................................................................... 33 
Hikma ........................................................................................................................................... 33 
Apple (Part I) .............................................................................................................................. 35 
Evolution of Structure .................................................................................................................. 36 
GOffee ......................................................................................................................................... 36 
Apple (Part II) ............................................................................................................................. 38 
Technology ...................................................................................................................................... 40 
Riopele ......................................................................................................................................... 40 
Pasta Medicinal Couto.............................................................................................................. 41 
Queen Yachts International .................................................................................................... 44 
People Management ...................................................................................................................... 45 
Ferespe ........................................................................................................................................ 45 
Imperial ........................................................................................................................................ 46 
 
Management and Managers 
6 
 
Management and Managers 
Ferespe 
Ferespe is a "jobbing foundry" installed and born in Vila Nova de Famalicão. The company works 
with more than 180 alloys for the production of small and medium-sized series (in 2013 the 
average per order was 2.7 parts), developing high-quality solutions, meeting standards set by 
customers, with high operating efficiency. Once we get inside the company one thing that stands 
out is the absence of the workers’ control clock, and the amplitude of spaces, not by itself, but 
by the fact that they are open spaces, encouraging the interaction between people and the 
consequent flow of information, both among the different departments, and between the 
different phases of the production process, which are divided into specialized work teams (each 
having someone responsible). However, despite the specialization, the company promotes 
flexibility and versatility of its employees, who must be able to perform more than a function if 
necessary - facilitating the adaptation of employees. According to the manager Jorge Casais, all 
the people who come to the company go through all functions, and each function has a set of 
tasks which are orally explained. As Casais states: "Employees work a month here, another 
month there, and the closer a function is to the one that the employee will perform the longer 
the employee will be close to that reality". In Ferespe there are quality certifications and all 
decisions taken at the various levels give rise to a written record that eventually passes by Jorge 
Casais. The internal perspective is that all employees are managers, from D. Odette who cleans 
to Eng. Joaquim Santos, Director of Production - the only thing that changes is the scale, but 
they all make decisions and solve problems, influencing the daily life of the company. "Proactivity 
is one of the main features of Ferespe and I promote decision-making by everyone. All employees 
of Ferespe are constantly making decisions", says Jorge Casais. But despite the high supply of 
human resources for the sector, their quality could be much better, "it's hard to find people with 
skills, it is really hard, [in this area] and only having experience one can get the pieces done, says 
Jorge Casais. Maybe that's why one of the particularities of Ferespe is that virtually all new 
recruits are children of current employees or retired workers. Jorge Casais knows all the 74 
employees working at his company, talks with them, knows their stories, their families and what 
each one of them gives value to, "the founder of this company did it in the past, ..., so I simply 
copy it”. If change is to happen, it has to be related with the succession (…)the great challenge 
of this company will not result from any dynamic that can arise from the environment or the 
way it is organized, but from the preparation of the succession of Jorge Casais. His biggest 
concern is to know if his successor “has the capacity to maintain the genesis of Ferespe in the 
next 100 years." A peculiarity of this company is that no one has ever been fired. Casais relies 
on his workers, preferring "relationships based on trust (…) where everyone knows the work 
Management and Managers 
7 
 
it has to do; and if an employee is to miss or be late to work, he/she has to warn the company.” 
In Ferespe “the concern with the employees is an internal part of the management strategy, and 
the company believes in the return from such approach". Employees have the opportunity to 
take fruits from the trees in the company's orchard, and on Christmas the children of the 
employees receive presents offered by the company. Whenever possible the company 
distributes part of its financial results in the form of bonuses. Employees benefit also from life 
and sickness insurances and cell phones. Several employees attended university due to the 
financial support of the company (in Ferespe there is the belief that theoretical support is crucial, 
even if the empirical experience is a necessary complement), and many used the Novas 
Oportunidades program. 
Source: free adaptation and translation from João F. Costa and Pedro A. Lima, ExecutiveDigest, November 01, 
2012, p.p. 53-55.; “Revista Pontos de Vista”, February 11, 2014.; Interviews with Jorge Casais and visits to FERESPE 
in June 26, 2014. 
Class Questions 
1. What typologies of managers can you identify in the text? From which level of management 
is Jorge Casais? Use excerpts from the text to illustrate your answer. 
2. Using the model proposed by Robert L. Katz (1955) and your own reasoning about the 
company and its business, which types of skills are mostly needed at the management levels 
you previously identified. Explain properly. 
3. Using the definitions proposed by Mintzberg (1975), which managerial roles can you identify 
as being performed by Jorge Casais (identify properly at least three roles)? Use excerpts 
from the text to illustrate your answer. 
Other Classes Questions (Session 5) 
4. Identify three of Mintzberg’s managerial roles played by Jorge Casais and explain how one 
of them may influence the balance between standardization and mutual adjustment, whilst 
characterizing this challenge. Use excerpts from the text to illustrate your answer. 
 
 
 
Management and Managers 
8 
 
Queen Yachts International 
Experiencing financial difficulties, Queen Yachts International (hereafter referred to as Queen), 
a luxury shipbuilder, was acquired by the investment fund “L Capital 2 FCPR” - a private 
investment fund underwritten by LVMH. The new shareholder injected 100 million euros into 
the company and hired Antony Sheriff (from McLaren Automotive, where he held the position 
of CEO for 10 years) to be the new CEO and chairman of the company. 
With no experience in shipbuilding, Sheriff suspected that many of the cost-cutting strategies 
developed over the past two decades in the automobile industry would easily be applied to this 
industry. However, Sheriff quickly discovered how little cost reduction strategies, such as 
subcontracting and layoffs, could be applied to the manufacture of yachts and super yachts in the 
city of Plymouth on the south coast of England. So, instead of simplifying or rationalising the 
company, Antony Sheriff chose to take a different approach. Under his authority, Queen started 
to focus exclusively on the top-end luxury segment and started devoting a greater share of its 
investment to innovation and design (the design of the new R35, for example, is the result of a 
partnership with the celebrated Pininfarina, “the hand” behind the design of dozens of Ferraris). 
In a few years, Sheriff increased the team by about 1,000 people, an increase of almost 50%. 
“Every day we have people with extraordinary shipbuilding experience who come to us to 
deliver the curriculum in person. When we truly like someone's resume, we immediately 
conduct an interview, and the person stays for a few weeks on probation to see if it has exactly 
what we are looking for. What usually happens to them is that they are put to work directly 
with colleagues, as a team, always under the supervision of the older ones, the more 
experienced. This makes it easier to understand whether they have what we need or not, and if 
they need some more specific training, which we seek to provide internally whenever that is 
possible - as it is not easy to find companies that provide training in certain areas in this region. 
I, myself, am a mentor of two members of the management staff”, says Sheriff. 
The moment of change could not be better. The current economic climate with a growing group 
of super rich people has been good for the yacht trade, and Queen, who made nearly £30 million 
of profits on revenues of £340 million in 2018, is among the lucky ones, having managed to 
substantially increase the prices of its vessels. The proof of the success of this strategy is that 
the company’s order book is completely full, already extending beyond 2020. “Improving 
performance has also allowed us to gradually improve incentives and create the conditions for 
the people who work here to feel good and motivated and to stay with us for many years,” says 
Sheriff. The company offers salaries above the industry average and an extra component indexed 
to the performance of the worker and company itself. “We have never had problems with 
workers or unions, we comply with everything, we have always had an excellent institutional 
Management and Managers 
9 
 
relationship,” says Sheriff. Employee performance appraisal is a responsibility delegated to the 
people responsible for the various departments and work teams. 
“When I got here, I thought: ‘We have some amazing facilities, where people with 50 years of 
accumulated experience work, and this is something almost no other company has. We can do 
everything on our own, internally,” said Sheriff recently at an event aimed at presenting earnings 
results to investors. "And then I looked around and realized, 'Well, anyway, there's no one else 
within a two-hundred-mile range that can do the things we do here.'" Thus, with subcontracting 
out of the options, doing everything manually has become a marketing image. "Our brand is no 
longer 'Queen'. It's 'Queen, made in Plymouth,'" he says. About 75% or more of each Queen 
yacht is made on site - from the wiring to the fuel tank. "We really have here little old ladies and 
old men, young men and young women doing everything with their own hands. People who 
know how to solve problems when they arise, there is no need to be always controlling them. 
We have people with huge responsibility and versatility." says Sheriff. “Clients show up at our 
facilities and see not only their boat being assembled with parts purchased from our suppliers 
[which are not that many and with which we have a great longstanding relationship], but also 
see wood sheets coming in and being manually transformed into the most beautiful pieces of 
furniture. 
In addition to the growing number of millionaires and billionaires - the result of a decade of 
continuous economic growth - Sheriff identifies two more interesting industry dynamics for 
which the company is perfectly prepared. The first, and perhaps the most striking one, is that 
just like in supercars the technological advances have enabled virtually anyone to be able to pilot 
a yacht. "A person who knows how to drive a Ford Fiesta can perfectly drive a McLaren," says 
Sheriff. “In boats it is exactly the same. They have become much less intimidating... we want the 
boat to remain where it is? Just pressa button and the GPS locks the location - the direction of 
the sea current doesn't matter; the boat remains exactly where it is. Technology is just an 
excellent complement.” The other dynamic is the growing demand for isolation. "People buy a 
yacht because they love spending time in a quiet place with their family, away from everything, 
where kids can't get away," says Sheriff. "These people are in tune with this conception of how 
to spend the vacations time when you have money: instead of private jets and other things, you 
can go for a boat ride and spend a high-quality time. And this is what we offer". 
However, there is another increasingly important dynamic in play in this industry, its 
environmental impact. Yachts are still powered by powerful petrol engines. Queen has been 
trying to make its engines more efficient, having developed the Active Foil System (AFS) to 
deliver the fastest, most exhilarating and most fuel-efficient yacht ride to date. 
Management and Managers 
10 
 
Queen was also the first major European boat-builder to be awarded ISO14001 in recognition 
for its achievements in reducing its environmental impact by breaking new ground in large scale 
resin infusion technology, a closed moulded process which almost completely eliminates styrene 
emissions in the workplace and local environment. 
Source: inspired in “A Quiet Revolution at a Storied British Yacht Builder”, Bloomberg, August 12, 2019, retrieved 
from https://www.bloomberg.com/news/features/2019-08-12/princess-yachts-bernard-arnault-backs-reshaping-an-
industry. 
Class Questions 
1. Is Anthony Sheriff a top, middle, or front-line manager? Use excerpts from the text to 
illustrate your answer. 
2. Using the model proposed by Mintzberg (1975), identify and explain three of the roles 
performed by Antony Sheriff, the CEO of “Queen”. Make sure to identify one role from 
each group of roles proposed by Mintzberg. Illustrate your answer with quotes from the 
text. 
 
Definition of Organization 
11 
 
Definition of Organization 
Ramirez 
In 1853 Sebastian Ramirez created, with a mostly female workforce, a fish salting company that 
evolved into canning. The canned food represented a magnificent protein, tasty, healthy and with 
olive oil (fat), something that at the time did not exist in the market. At the time of World War 
II, as Portugal remained neutral in the conflict, it retained canning customers around the world. 
In the 60s and 70s, Ramirez began to innovate: it created the first sardine heading machine; 
launched the first easy-open can in the world, set up its quality control laboratory. It was the 
first industry in the sector to install a refrigeration equipment, which Salazar [Portuguese 
dictator] was disapproving of, but allowed Ramirez to survive the impact of the Portuguese 
revolution: out of 400 canning companies in the country before the revolution, fewer than 50 
are left. 
Ramirez currently produces canned food of various species: tuna, sardines, mackerel, anchovy, 
squid, cod, octopus, European anchovy and horse mackerel, in a total of 55 different products - 
compared to each competitor's average 4 products. Sardines and tuna account for 80% of the 
production (tuna is the champion in domestic sales and sardines in foreign markets). The sardines 
are fished from May to December and then brought to the factories (in the other months there 
is a biological stop for new sardines to gain fat and replenish stocks). Unused sardines are frozen 
one by one (IQF - Individual Quick Frozen). The sardines that go directly to the production are 
placed in pines, in brine, for flavouring for 20-30 minutes, then the employees remove their 
heads and viscera and can them (about 4 per can, depending on the calibre of the fish). The can 
is washed, turned upside down and thrown into a sizzling cooker for 30-35 minutes; the can 
receives olive oil - or oil or tomato or water – proceeds to the clamping (can closure), water 
basket and is sterilized (at 119 degrees for 40 minutes). 
In 2015, Ramirez combined the entire factory complex into one space, holding one of the most 
modern and greenest factories in the world (an investment of 18 million euros). This modernity 
has been instrumental in satisfying demanding customers from Canada, South Africa, Japan, 
England and the USA. Ramirez is an exporter and sells to 45 countries: several in Europe, the 
Philippines, Canada and the former Portuguese colonies. The company's website was, as a result 
of the demands of modern consumers, translated into English, French, Spanish and German, and 
it is possible to buy Ramirez canned food online. Producing 300,000 cans a day, only a few use 
the Ramirez brand. In total, the company has about 14 brands, representing distinct product 
positioning. Canned food is synonymous of healthy eating: without additives and with Omega 3. 
Definition of Organization 
12 
 
In 2008, Ramirez signalled this with the creation of the TUNACOL product - a tuna that helps 
fight cholesterol. 
Ramirez products are economical, practical and safe, being certified with MSC and FOS 
sustainable fishing. There are years with more sardines than others, and the mackerel (of which 
there was always plenty) began to run low, which lead Ramirez to buy in Spain. In turn, tuna is 
bought in Ecuador and in the Indian Ocean area. 
In 2019, the company generated 30 million euros in turnover and had around 200 employees, 
some of them already from the 3rd generation of families that first started working there at the 
beginning of the last century. Social equilibrium has always been a priority for Ramirez, something 
clearly visible in the nursery - present since the 1940s in Ramirez factories. 
Source: free adaptation and translation from https://www.youtube.com/watch?v=9RZe7KuKE9M 
Class Questions 
1. Based on the information in the text and on your own research: What is the name of the 
company (briefly describe the history and growth of the company)? What is the main 
business of the company (which products manufactures/markets and/or services sells)? Is it 
a micro, small, medium, or large size company? 
2. Based on the information available in the text, identify the phases of the value creation 
process of Ramirez, illustrating how the company creates value in each of the phases with 
some quotes from the text. 
Other Classes Questions (Session 4) 
3. Illustrating with quotes from the text, identify two elements of the specific environment and 
two from the generic environment, and evaluate their impact on the degree of uncertainty 
of the environment. 
Definition of Organization 
13 
 
Farfetch 
Farfetch is a technology company in the fashion domain that many consider the Portuguese 
Amazon. For its founder and CEO, José Neves, born in Porto, however, Apple would be the 
most comparable company. In fact, the results achieved since its foundation, in 2008, place 
Farfetch in a different galaxy – one where there are start-ups valued over one billion dollars, 
usually called “unicorns”. 
The idea for Farfetch was born on a fair in Paris, in 2007. According to José Neves “It was clear 
that the only companies that were growing were the ones which had an e-commerce site. All 
others were failing. I knew that, for most brands, it would be impossible to have a global platform 
to do e-commerce as it should be done, especially for luxury items, which must have a selective 
distribution, be sold close to other similar brands and products, to a specific demographics, with 
respect for aesthetic patterns. I wondered: «What if I were to build a platform that would gather 
all these companies that do not have and are never going to have global access due to their lack 
of scale?» It seemed advantageous for these companies, that would gain visibility and an online 
channel and, also, for the customers, who would be able to make a fantastic shopping triponline 
through the best stores in the world, as if they were on the streets of London, Milan or New 
York.” 
And so, Farfetch was born: an e-commerce platform, which connects shoppers and stores, does 
not own any stock, charges a sale commission (of which it does not reveal the percentage, 
although claiming it is the same for all stores and purchases), but handles all the e-commerce 
functions. The stock is spread throughout the more than 750 luxury fashion boutiques, in about 
40 countries from all over the world. In every sales point there is a Farfetch software which 
synchronizes the website with the stock from every store, in real-time, which means a client 
may be seeing pairs of shoes available in any other parts of the world. 
At the moment, Farfetch delivers in about 190 countries and handles all the logistics regarding 
the pickup of the stock at the store and delivery to the client, through outsourced companies, 
while it provides all customer service itself. The client promise includes fast shipping (1-2 days 
processing plus 1-5 days delivery), quick response (1 day for replying to client queries), free 
returns and 24/7 customer support.In 2016, Farfetch has grown 70% and closed the year with 
gross revenue of 800 million dollars, circa 10 million site visitors per month and an average value 
of 700 dollars per purchase. The focus now is on international growth and consolidation of 
markets where it is already present and where large investments were made and there has been 
growth, such as China, Japan, Korea, Russia, Brazil and the US. 
Definition of Organization 
14 
 
The products never go through Farfetch’s ‘hands’, except for one unit of each item, so that it is 
photographed, and then retuned. The production process includes styling, photography and 
catalogue creation and Farfetch uses the Kaizen methodology to implement continuous 
improvement in its processes. 
It is frequently audited by international companies such as PwC, KPMG, among others, when “all 
contracts, from employees to technology companies, intellectual property, brand registration, 
are analysed from head-to-toe.” In addition, customer feedback is a fundamental piece of the 
company’s management, being proudly exhibited on its website. 
The company has about 2.000 employees, spread through 11 offices from Porto, Lisbon, 
Guimarães to London, New York, LA, São Paulo, Tokyo, Hong Kong, Shanghai and Moscow. 
Although its headquarters are in London, it is in Portugal where the Engineering, Financial 
Services, Store Account Management groups, as well as a part of the Customer Service and the 
Styling and Photographic production are. Editorial, Marketing, Merchandising and Business 
Development are based in London, among others, where 200 people work. In the remaining 
offices, there are mostly Customer Service teams to serve the local markets. The connection of 
every team with Engineering is critical for its success and is made through meetings and informal 
encounters. 
José Neves is mainly involved in strategic decisions and matters regarding shareholders. In 
everything else, he delegates heavily. “I believe that if there is one thing I can be accused of is 
delegating too much. There is wide room for manoeuvre at Farfetch, allowing people to take 
their own decisions. What is important is that they are aligned with the culture and the goals”. 
Talent acquisition is fundamental, and “Brexit” may become an important obstacle for the 
London office. “People make this company. People are the most important thing”, says José 
Neves. José Neves describes his team as fantastic. In the company offices, in Leça do Balio, there 
are red slides, ping-pong tables and table football and, in its wall, messages for the employees: 
Be human, Be global, Be brilliant, Be revolutionary and, lastly, in Portuguese, “Todos juntos” (all 
together). 
Source: free adaptation and translation from articles published in Público, CNBC, Jornal de Negócios, Expresso, 
Observador, Openlimits, Farfetch, Saldo Positivo, Visão. 
 
 
Definition of Organization 
15 
 
Class Questions 
1. Based on the information in the text and on your own research: What is the name of the 
company (briefly describe the history and growth of the company)? What is the main 
business of the company (which products manufactures/markets and/or services sells)? Is it 
a micro, small, medium, or large size company? 
2. Using the appropriate model, explain how Farfetch creates value. Illustrate your answer with 
quotes from the text. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Definition of Organization 
16 
 
Southwest Airlines 
Southwest Airlines was founded in 1967 by Rolling King and Herb Kelleher with headquarters 
in Love Field, Dallas. In 1971 it began flying three Boeing 737 aircrafts serving Dallas, Houston 
and San Antonio with the policy of dignifying the customer and providing on-time flights that 
satisfy customers. The “love” theme has ever since characterized the company as exemplified 
by the company’s choice of “LUV” as its stock exchange symbol. Kelleher who assumed the role 
of President and CEO for more than three decades decided that his airline would compete by 
eliminating all the unnecessary frills that characterized the other established airlines such as on-
board meals and assigned seats. Frequent trips, direct flights, a single type of planes, choosing 
uncongested airports and selling online have made the travel experience quick and convenient 
for Southwest passengers. 
The company has since the beginning focused on a structure that lowers the costs of inputs and 
the costs of converting inputs into outputs. Southwest also carefully selects its human resources; 
only 3% of the interviewed candidates are hired each year and the existing employees (pilots, 
cabin crew members, ground staff, or office staff) are the ones who do the hiring. Its employees 
have a positive, helping attitude not only toward passengers but also toward each other. Such 
approach translates into increased efficiency as the airline is able to have its planes spending less 
time on the ground and saving on costs. Since planes represent another important asset to 
operate an airline, the company only relies on Boeings to save costs on activities such as 
maintenance. Southwest has also been among the first airlines to make extensive use of online 
bookings for its tickets thus bypassing the more expensive travel agents. Moreover, it flies to 
secondary airports, though close to metropolitan areas in the US. 
Another reason for the success of this company is its great attention towards employees, who 
are amongst the most loyal in the world. Flexibility at the workplace, group decision making and 
a team-building approach are additional attributes that drove Southwest to success. To achieve 
efficiency, it is fundamental that all employees coordinate their activities. However, coordination 
may not suffice, and the company keeps employees motivated with a generous profit-sharing 
plan whereby managers and lower-level employees receive company stocks as a function of how 
well the company performs. Once per year Southwest provides awards to its top-performing 
employees through a dedicated event. Joint problem solving is at the heart of Southwest’s 
culture. For example, pilots sometimes handled baggage or helped cabin crew in picking up 
passengers. The main spirit is to do everything that is required to complete the task rather than 
having a mentality that “it is not my job”. Southwest is also strongly appreciated by its customers. 
The airline sends birthday cards to its frequent fliers and responds personally to thousands of 
customer messages received weekly. Such personal attention makes customers feel valued and 
Definition of Organization 
17 
 
inclined to fly Southwest. However, the model that Southwest’s managers have successfully 
embracedis not without risks. Passengers are asked to carry their own bags when transferring 
to other airlines, get their own food and seat themselves. As competition is growing, established 
and younger airlines have imitated Southwest’s model by adding some frills which may lead some 
customers to choose other airlines over Southwest. Additionally, tensions have arisen between 
the airline’s managers and Southwest Airlines Pilots Association over employees’ contract 
renegotiations. Southwest is attempting to reach a balance between continued growth and 
strong financial performance on one side, and the expectations of its pilots, mechanics and flight 
attendants who have contributed to the positive results on the other. However, Southwest’s 
managers are now seeking more contract flexibility as employees’ costs have grown by 34% in 
ten years. 
Source: free adaptation and translation from Southwest Airlines case studies in Jones, Gareth (2013). 
Organizational Theory, Design, and Change. 7th Edition, Pearson Education. Global Edition. 
Class Questions 
1. Describe how Southwest Airlines creates value based on the information available in the 
text. Illustrate your answer with quotes from the text. 
Other Classes Questions (Session 4) 
2. Citing the text, identify two internal stakeholders and two external stakeholders of 
Southwest Airlines, and describe the inducements and contributions for two stakeholders 
of your choice. Identify a potential conflict of interest between internal stakeholders and 
between an internal and an external stakeholder. 
Organizational Models 
18 
 
Organizational Models 
FIAT(circa 2019) 
FIAT, an Italian automaker whose history traces back to the 18th century, is today one of the 
leading companies in the automotive industry. Founded by the Agnelli family, the company 
focused on building an international presence embracing a value-for-money approach to meet 
the tastes of the price-sensitive customer but a not at the expense of design and creativity. A 
big turning point in FIAT’s history was the appointment of Sergio Marchionne as the CEO in 
2004 who has emerged as one of his generation’s boldest business leaders known for his nonstop 
work ethic and razor-sharp intellect. From FIAT’s HQs in Turin, he kept a direct line of contact 
with the product and regional managers reducing the decision-making autonomy at a regional 
level. During his leadership, FIAT grew also through the acquisitions of the brands Chrysler and 
Jeep, leading to the creation of FCA group. But Mr. Marchionne was not alone. He counted on 
a “team” of 63 thousand employees at different managerial levels to implement his guidelines. 
The stakes for them were also high as the ones who would constantly score high in the 
Performance Leadership Management evaluation process that addresses FCA’s managers would 
soon be promoted. To support meritocracy, FCA has defined a compensation system that 
rewards employees for their contribution to the company’s results, provides development 
opportunities and allows them to share in the business success they help create. Base salary, 
benefits and variable incentives are determined by market-driven benchmarks. Additionally, the 
Group employs a formal process to monitor application of its core equity and fairness principle 
to compensation levels, annual salary reviews and promotions. An internal survey revealed that 
in 2016 about 65% of the workforce was eligible to a pension plan while 34% benefited from 
child care services and 40% from fitness services. 
Today, FCA is an international automotive group engaged in designing, engineering, 
manufacturing, distributing and selling vehicles, components and production systems, with 
operations in approximately 40 countries and commercial relationships with customers in more 
than 140 countries. To increase car components standardization, FIAT relies on long-term stable 
relationships with highly specialized large suppliers such as Teksid and Magneti Marelli, together 
with smaller suppliers at a local level. This also implies an effort to minimize waste margins for 
error during the production process. FCA strictly follows World Class Manufacturing (WCM) 
methodologies which contribute to steady and continuous reduction in the impact of 
manufacturing processes. The WCM system consists of 10 technical and 10 management pillars 
and serves as a common language for FCA plants. 
Organizational Models 
19 
 
The group also creates value through its 231,000 employees. In line with a recent McKinsey 
report indicating that employees’ happiness is strongly correlated with sales, FCA’s position is 
that “Excellence is heavily dependent on factors such as diversity, professional experience and 
know-how, and a healthy and safe work environment”. Consistent with these goals, the human 
resources function supports robust processes designed to both secure the talent required by 
the business and also to provide employees with opportunities during their entire career life 
cycle from recruiting to retirement. Last year alone the company invested €65 million in training 
and development activities and €194 million were invested for improvement to safety and 
working conditions and to employee health, equivalent to 1.5% of annual personnel costs. 
FCA’s activities are organized through five reportable segments operating to achieve profitability 
and responsible growth in a highly competitive and dynamic economy. The company keeps all 
its major brands operations - including Fiat, Lancia and Alfa Romeo – clustered around four 
regional mass-market vehicle segments (NAFTA, LATAM, APAC and EMEA), while Maserati (i.e. 
the global luxury brand segment) operates as a separate business unit. 
The hard work of FIAT’s top management has attracted media attention for the generous 
compensation package. The company noted that Marchionne and other company leaders are 
paid based on performance. In 2017, Mr. Marchionne was paid $11.95 million in base salary plus 
bonus and $2.7 million in noncash compensation, while FCA Chairman John Elkann received 
almost $2.2 million plus $500,708 in noncash compensation. With more industrial cash than 
debt, rumours say that FCA’s shareholders may get up to $2 billion in dividends. These numbers, 
however, did not go well with the unions: “Workers at FIAT haven't had a wage increase in ten 
years. With these compensations, you could give every worker a relevant pay rise", criticized 
Mr. Giannone. 
Source: adapted from the “2019 FCA Sustainability Report - Stellantis” available for download at 
https://www.media.stellantis.com and from articles published in “Sport” (Spain), “The Sun” (UK) and “Autoprint” 
(Chicago), respectively in: https://www.sport.es/en/news/real-madrid/fiat-factory-workers-are-angry-at-juventus-
signing-cristiano-ronaldo-6928339; https://www.thesun.co.uk/sport/football/6713435/cristiano-ronaldo-juventus-
real-madrid-wages-fiat-workers-angry/; https://www.autosprintchicago.com/blog/the-history-of-fiat 
 
Class Questions 
1. Describe FIAT as an open system by using Galbraith’s model. Illustrate, with at least one 
example, each aspect of this model by quoting the text. 
 
Organizational Models 
20 
 
Other Classes Questions (Session 7 and Session 9) 
2. Identify and justify with excerpts from the text in the Annex, what type of structure seems 
to be FIAT’s, and the corresponding phase of the Greiner model the company seems to be 
at. (Session 7) 
3. Describe, illustrating with excerpts of the text, at least four components of the People 
Management System, using these illustrations to explain why it should be seen as an Open 
System. (Session 9) 
 
 
Organizational Models 
21 
 
Indie Campers 
Indie Campers was founded in 2013 with the goal of selling the world's most romanticized 
American dream, road trips in a camper van. The vans – which are modern vehicles - arebought 
from suppliers and then adapted to camping. It is at Indie Campers office that the adaptations 
are designed, both the inside, with all the amenities, and the outside design, always very appealing. 
They are not motorhomes, they are smaller vans, with reduced consumption of fuel, very simple 
maintenance and very easy to drive. According to the CEO, Hugo Oliveira, this strategy 
differentiates the company, promoting its growth, and allows it to simultaneously have a great 
"price competitiveness”. 
What started as a company of only three motorhomes in Portugal is today the largest 
motorhome (camper vans) rental company in Europe with a fleet of over 450 vehicles and 
operations in more than 70 locations close to airports scattered all over Europe. Belgium, Italy, 
Switzerland, and islands like Sicily and Corsica are some examples. Committed to providing 
travellers with the ultimate road trip experience, Indie Campers gives its customers the ability 
to start and end their journey at the location - or locations - that best fit their travelling plans. 
The entire process was designed to be extremely convenient and intuitive. For the customer to 
benefit from Indie Campers service the first step is the pre-reservation, which can be done 
exclusively online (the only sales channel the company has) and that consists of making decisions 
such as the location and date for the check-in and for the check-out; the desired camper van 
model (from 7 different models); the desired extras, etc. The following step is the verification of 
all the information by the company, and if everything complies the process ends with the client 
receiving a request to confirm the reservation by paying 50% of the value with a credit card. 
Then the customer must confirm the reservation by making the respective payment. When the 
day of the trip finally arrives, the client must do the check-in, which includes picking-up the 
camper van on the date and location indicated at the time of the pre-reservation and making the 
payment of the 50% of the value still missing (once again by credit card). Once the trip is over, 
the customer does the check-out, which consists in delivering the camper van in the location 
indicated in the pre-reservation and under the same conditions in which it was delivered to him. 
At this moment a conformity check is made and if everything is in the due conditions the check-
out of another satisfied customer is successful. The team responsible for the operations in the 
location where the camper van is delivered is then responsible for the last phase, which happens 
far from the customer eyes and that consists of the cleaning and maintenance of the camper van 
- preparing it for the next customer. 
Organizational Models 
22 
 
With free WIFI and a wide variety of extras available for rental such as GPS, surfboards, bicycles 
and even kayaks, Indie Campers is aimed at adventurous explorers, providing a way for them to 
easily customize their trip and make their vacations truly unique. In addition, with its digital and 
technological strategy (they will soon have their own smartphone app), Indie Campers replaces 
the complications inherent to organizing a trip by a new, more relaxed and personalized way, 
backed by a dedicated and educated commercial team that gives tips (in six possible languages) 
on the best places to visit and the best advice for an unforgettable trip. 
"We are not a rent a car, we are a tourist service that pursues excellence, we are very attentive 
to the needs of the client and we support him since the beginning until the end of the trip. We 
provide customer support and travel assistance 24 hours a day, 7 days a week. We are proud 
of how we are constantly developing our product so that we can provide a better service, as 
well as all of our complementary services," says the CEO. In the last few months, the company 
has hired around 100 people, 30 for the commercial areas, digital marketing, human resources, 
and financial area, and 60 for the operational part of its various locations (camper van’s pick-up 
and drop-off, cleaning and maintenance). The CEO seeks to assure that in the company everyone 
walks in the same direction, "each person that is hired has his/her own development plan, 
including myself, a fixed salary above the average and plus a variable salary according to the 
performance of the respective team. In my case, it’s according to the performance of the 
company as a hole. 
Sources: inspired in “Portugal Ventures sai da Indie Campers por 750 mil euros”, DinheiroVivo, October 02, 2017; 
and indiecampers.com webpage. 
Class Questions 
1. Describe Indie Campers as an open system by using Galbraith’s model. Illustrate by quoting 
the text. 
Other Classes Questions (Session 4 and Session 2) 
2. Identify the organisational domain of Indie Campers and identify and present a respective 
contribution and reward of one internal stakeholder and two external stakeholders. 
Illustrate by quoting the text. (Session 4) 
3. Based on the information available in the text and using the value creation model, explaining 
it, identify and describe the stages at which Indie Campers creates value. (Session 2) 
Organizational Models 
23 
 
Liz Claiborne 
The American company Liz Claiborne has hired a new CEO, William McComb, to try to turn 
around its troubled situation. In a matter of months, the new manager decided to reverse the 
course followed until then. The solution would be to shrink the company and adopt a new form 
of organizational structure that would allow it to once again resume growth - but this time with 
increasing profitability. The main problem for CEO William McComb was to find a new 
organizational structure that would reduce the problems associated with managing the 36 
different brands the company owned. McComb believed that the company had developed a 
"culture of complexity" due to its rapid growth and overly complex organizational structure. 
The company had created five different apparel divisions to manage its 36 brands; brands that 
were grouped into different divisions according to the nature of the apparel or accessories they 
produced. For example, luxury designer lines such as Ellen Tracy were grouped into one division; 
clothing lines for working ladies, such as the Liz Clairborne brand and the Dana Buchman brand, 
were in a second division; hip and trendy clothing lines aimed at young customers, such as Juicy 
Couture, were in a third division, and so on. Each division was controlled by an independent 
management team, and each division performed internally all the functional activities (such as 
marketing and design) necessary to support its brands. The big problem was that over time it 
became increasingly difficult to differentiate between clothing brands within each division, as well 
as between brands in different divisions, this because fashion styles change rapidly in response 
to the demands of ever-changing customer tastes. In addition, costs were rising because of 
duplication of activities between divisions, and increasing competition in the industry was pushing 
the company to lower prices to retail stores in order to protect its sales. 
McComb decided that it was necessary to simplify and change the company's organizational 
structure to respond to changing customer needs and increasing competition in retailing fostered 
by the proliferation of private label distributors. First, McComb decided that the company would 
try to sell, license, or, if necessary, close 16 of its 36 brands and focus on the remaining 20 that 
were most likely to generate good results in the future. To better manage these 20 brands, 
McComb decided to change the organizational structure and reduce the five different divisions 
to just two. This eliminated one level of senior management, but also eliminated the duplication 
of functions such as marketingand distribution (as well as other retail functions) in the five pre-
existing divisions, something that would result in substantial cost savings. Notwithstanding these 
changes, the supply chain would continue to report to Mike Scarpa, the company's Chief 
Operating Officer. 
The two remaining divisions are now the retail division, called "direct brands", and the wholesale 
division, called "partner brands". The new company structure is intended to "bring focus, energy 
Organizational Models 
24 
 
and clarity" to how each division operates. The retail division, for example, is responsible for the 
brands that are primarily sold through Liz Claiborne's own retail store chains, such as Kate 
Spade, Lucky Brand Jeans, and Juicy Couture. The purpose of grouping the fastest growing brands 
under one division is to enable division managers to implement strategies appropriate to their 
respective businesses and make the best marketing and distribution decisions (each division has 
its own support functions) so that more customers are attracted. For example, Liz Claiborne 
plans to increase targeted marketing on "direct brands" to 3% to 5% of annual sales and to find 
ways to get newly designed clothing into its stores faster so that it can compete with chains like 
Zara, which are able to introduce new clothing collections every month. 
Source: free adaptation and translation from Jones, Gareth (2013). Organizational Theory, Design, and Change. 
7th Edition, Pearson Education. Global Edition, p. 198.; PR NewsWireLiz. Claiborne Inc. Reorganizes Company and 
Realigns Management Structure. 20 June 2007, Retrieved from http://goo.gl/oHZ7Xe (07/01/2015). 
Class Questions 
1. Identify at least three elements of Galbraith’s model at Liz Claiborne, and explain why the 
company is managed as an open system, whilst providing evidence of it from the text? 
Other Classes Questions (Session 4) 
2. Identifique um stakeholder interno e um stakeholder externo da Liz Claiborne, indicando as 
respetivas contribuições e recompensas. 
 
 
 
 
 
Environment 
25 
 
Environment 
Queen Yachts International 
Reread and revisit this case study (page 8) 
Class Questions 
3. Illustrating the full answer with quotes from the text, identify two different types of elements 
from the specific environment, and two from the generic environment, whilst explaining how 
they influence the sources of uncertainty of the environment of the company “Queen”. 
 
 
Environment 
26 
 
Riopele 
Founded in 1927 by José Dias de Oliveira and located in Pousada de Saramagos, in the 
municipality of Vila Nova de Famalicão, Riopele is one of the oldest Portuguese textile 
companies, focusing its activity on the creation and production of fabrics for fashion and clothing 
collections. With a sales volume, in 2019, of 78 million euros, it is one of the largest national 
textile companies. Assuming the leadership of the Textile Cluster (Technology and Fashion) 
when it was created in 2017, it is of particular importance in a sector, the Textile and Clothing, 
which represented at that time, in the North region, 87% of the sector's turnover and 85% of 
employment. Committed to the challenges of modernity, and oriented towards the timely 
satisfaction of clients' needs, Riopele's main distinctive elements are innovation, quality and 
reliability. 
Incorporating sustainable practices1 at all levels of the business, Riopele integrates the R&D 
areas and, in its Production department, the Spinning, Dyeing, Twisting, Weaving and Finishing 
areas, which guarantee high production flexibility, high quality control and an excellent lead time. 
It also has a private label clothing production service, which allows the integration of fabric 
production, with confection and personalized delivery. In addition, Riopele is one of the main 
suppliers of world-renowned fashion brands, such as Hugo Boss, Giorgio Armani, Burberry, Max 
Mara and the Inditex Group, which demonstrates its capacity to meet the current fast pace of 
the fashion industry. 
Although the textile sector is a mature one, investments in information technologies and the 
creation of a Research and Development Direction (R&D) reflect a bet on innovation, 
sustainability, and a promising future. To meet customer demands, Riopele has adopted the 
concept of production to order. Therefore, to trigger the process, it is necessary that the Order 
Management department receives an order, which is then forwarded to the Planning department, 
with both of them reporting to the Logistics Department2. At this stage, the need to buy raw 
materials for the confection of the products is evaluated. If this need arises, the order 
immediately goes to the Purchasing department (which reports to the Administrative Services 
Direction). The order only goes to the Production department after the raw material ordering 
process is completed. In Production, quality control is always present, since the product is 
analyzed and tested several times during the whole process. From the machinery, large volumes 
of fabrics slide over large light frames, in which men and women review every detail. It is at this 
 
1 E.g. Riopele presented in January 2020, at ISPO Munich 2020, one of the world's largest trade fairs 
dedicated to technical and sports textiles, a complete yoga suit of Popel's fabric, a green approach to odor 
control. 
2 The Logistics Department, as well as the R&D Department and the Marketing, Financial Services, 
Administrative and Production Departments report directly to the Administration. 
Environment 
27 
 
stage that Riopele is implementing an artificial vision system, which raises the alert to the slightest 
failure. With all this, Riopele intends to ensure one of the lines with which it sews best: the 
speed of response! 
Source: free adaptation and translation from Expresso Newspaper (https://expresso.pt/economia/2019-07-22-
Onde-o-textil-e-feito-com-ecras-tateis) and magazine Portugalglobal 
(http://portugalglobal.pt/PT/RevistaPortugalglobal/2018/Documents/revista-113-outubro.pdf). 
Class Questions 
1. Illustrating the full answer with quotes from the text, identify one element from the specific 
environment, and two different types from the generic environment, whilst explaining the 
influence each of them have in a particular phase of the value creation at Riopele. 
Design 
28 
 
Design 
Local Consulting 
Ted Swabey, one year into his tenure as CEO at Local Consulting, has initiated a profound 
organisational renewal. The new organisational structure comes after 10 years of modest growth 
and is the result of the current technological dynamism and increasing search for consulting 
services across a growing multitude of industries. The new structure has a smaller senior 
management team comprised of four general managers (GMs) who report directly to Swabey 
and manage four newly formed divisions, that provide consulting services in 4 different areas of 
expertise: Financial and Insurance; Legal and Tax; Transportation and Logistics; and Digital. Each 
division now combines connected services to simplify the client experience, reduce 
administrative delays associated with cross-departmental approvals and coordination, and 
promote a more adaptive and responsive service. For this to be achieved, changes have also 
been made concerning departments of Human Resources, Sales and Marketing, Information 
Technology, and Finance and Accounting - whilst generally providing support to the Service 
divisions in the past, nowadays each of these subunits has deployed specialists [with a 
considerable degree of autonomy] to each of the four Services divisions (though these specialists 
also still report to each of the original subunits). “The structure and culture at Local Consulting 
needed to change in order to effectively meet the growing expectations of the clients and other 
stakeholders we serve,”noted Swabey. “The pressures and expectations on our organisation 
have shifted dramatically over time and the structure and culture that worked in the past are no 
longer effective. We must adapt and modernize; we need to be more proactive.” Cost savings 
will be obtained from improved productivity due to ongoing work to speed up service delivery 
within the divisions. The new structure responds to the high level of dependence and high need 
for coordination of the different teams of specialists within each of the several divisions in order 
to come up with the best possible solution that Local Consulting clients need and expect. “It is 
difficult to specify in advance a solution for the type of clients we work with, all situations present 
new challenges and we need to be ready to face them. We all need to be aware that the best 
solution possible is dependent on everyone cooperating with everyone within each division, 
[namely] discussing things face to face” added Swabey. The new structure will also result in long-
term salary savings realized through the reduction in senior leadership positions. From the 
previous seven Directors only three remained and became GMs. The decision about the four 
Directors leaving the company resulted from a mix of job analysis and individual evaluating based 
on a set of objective and subjective criterions’ (results, skills, behaviour, etc.) considered 
essential for achieving a good performance in the future. All four managers agreed with the 
decision and where compensated according to the years they had been working in the company 
Design 
29 
 
– apart from that, all their legal rights were respected. However, the job analysis and the 
individual evaluation did identify some needs, and the three remaining Directors had to attend 
specially designed management courses in order to fill those needs. After the courses, Ernie 
Mansueti, former Director of Legal Services, has been appointed to the role of GM for Legal and 
Tax, former Director of Financial Services Mark Frame took the role of GM for Financial and 
Insurance Services, and former Director of transportation Sarah Nixon became GM of 
Transportation and Logistics Services. Due to the lack of a proper match within the company 
for the newly created Digital Services division, an outsider manager had to be hired. The process 
took almost two months, considering the high demand in the market for managers with such 
experience and the high-level interviews that had to be conducted in order to take a decision. 
In line with the new structure, the rewards scheme was redesigned, base wages increased 15% 
at all levels (the company was paying salaries 5 to 10% below the industry average) and bonus 
were introduced along with a variable salary component - dependent on a mix of each division’s 
performance (each division is now an independent profit center) and the performance of the 
organisation as a whole. GMs wage increase also took in consideration their increased 
responsibilities and the fact that they are the ones in charge of supervising and promoting the 
coordination of activities within their division but also to share useful information and knowledge 
with other GMs in the committee where they all meet once per week. Swabey can now focus 
on the strategic decisions about the company’s future. 
Source: Inspired in “North Cowichan changes organizational structure”, ChemainusValleyCourier, October 17, 
2018. 
Class Questions 
1. Identify, justifying with excerpts from the text, the different types of differentiation at Local 
Consulting. Additionally, also justifying with excerpts from the text, identify and describe 
three of the integration mechanisms used. 
 
Design 
30 
 
Amazon 
In 1994, Jeff Bezos founded Amazon, an online bookstore that only operated through the 
internet and never saw its customers, but whose mission was to provide customers with a great 
selection of books at low prices. How did he do it? 
First, he quickly realized that customers support was the most vital link between customer and 
organization, so to ensure good customer service he assigned authority to employees at lower 
levels in the hierarchy and empowered them to find ways to meet customer needs quickly. 
Second, realizing that customers wanted the books quickly, he sought to develop an efficient 
distribution and shipping system. Essentially, his main problem was handling inputs into the 
system (customer requests) and outputs (delivered books). So, he developed information 
technologies (IT) to standardize the processing of the requests to increase efficiency, but he also 
encouraged employees to use their own judgement in decisions concerning to the processing of 
the inputs and outputs in order to improve customers’ responsiveness – employees were able 
to manage exceptions, such as post orders or confused customers, as the need arose. Third, 
because Amazon then employed a relatively small number of people, Bezos was able to make 
great use of socialization to coordinate and motivate employees. 
A few months after the creation of the company, Amazon’s impressive growth would force Jeff 
Bezos to increasingly focus on the specialization of its employees. First, Bezos created Amazon’s 
research and development (R&D) department to continue to develop and improve the in-house 
software that he had initially developed for internet-based retailing. Then, he established the 
information systems department to handle the day-to-day implementation of these systems and 
to manage the interface between the customer and the organization. Third, he created the 
materials management/logistics department to devise the most cost-efficient ways to obtain one-
day shipping to customers. Next, as Amazon grew, he created a separate financial department 
and a strategic planning department to help chart the company’s future. 
At the beginning of the 21st century, the measures undertaken by Bezos allowed Amazon to 
claim itself as leader in the online book retailing, leading it to expand and provide many other 
kinds of products for its customers, such as electronics, houseware, food, and cloud computing 
services - with different departments being created to manage each of these very distinct product 
lines. 
How did Jeff Bezos address these design challenges given his need to create a structure to 
manage an online bookstore that operated through the internet and never saw its customers, 
but whose mission was to provide customers a great selection at low prices? Because the success 
of his venture depended on providing customers with an informative, easy to use online 
Design 
31 
 
storefront, it was vital that customers found Amazon’s 1-Click checkout system easy and 
convenient to use and reliable. So, Bezos’s design choices were driven by the need to ensure 
Amazon’s software platform linked customers to the organization most effectively. 
First, he quickly realized that customers support was the most vital link between customer and 
organization, so to ensure good customer service he decentralized control and empowered his 
employees to find ways to meet customer needs quickly. Second, realizing that customers 
wanted the book quickly, he moved rapidly to develop an efficient distribution and shipping 
system. Essentially, his main problem was handling inputs into the system (customer requests) 
and outputs (delivered books). So, he developed information technologies (IT) to standardize 
the work or throughput process to increase efficiency, but he also encouraged mutual 
adjustment at the input or customer end to improve customers’ responsiveness – employees 
were able to manage exceptions such as post orders or confused customers as the need arose. 
(Note that Amazon’s IT is also the most important means it uses to integrate cross-functional 
activities in the organization; IT is the backbone of the company’s value-creationactivities). Third, 
because Amazon then employed a relatively small number of people – about 2500 worldwide – 
Bezos was able to make great use of socialization to coordinate and motivate his employees. 
Amazon employees were carefully selected and socialized by the other members of their 
functions to help them quickly learn their organizational roles and – most important – Amazon’s 
important norm of providing excellent quality customer service. Finally, to ensure Amazon’s 
employees were motivated to provide the best possible customer service, Bezos gives all 
employees stock in the company. Employees currently own over 10% of their company. 
Amazon’s rapid growth suggests that Bezos designed an effective organizational structure. 
As we saw previously, Jeff Bezos, the founder of Amazon, achieved phenomenal success with his 
concept for an online bookstore. In large part, his success has been due to the functional 
structure he created for his company that has allowed Amazon’s proprietary internet software 
to be used so effectively to link employees to customers. 
First, Bezos created Amazon’s R&D department to continue to develop and improve the in-
house software that he had initially developed for internet-based retailing. Then, he established 
the information systems department to handle the day-to-day implementation of these systems 
and to manage the interface between the customer and the organization. Third, he created the 
materials management/logistics department to devise the most cost-efficient ways to obtain one-
day shipping to customers. Next, as Amazon grew, he created a separate financial department 
and a strategic planning department to help chart the company’s future. As we will see in latter 
chapters, these departments have allowed Amazon to expand and provide many other kind of 
products for its customers in the 2000’s, such as electronics, houseware, food, and cloud 
Design 
32 
 
computing services, and different departments have been created to manage each of these 
distinct product lines. 
Source: free adaptation from Amazon case studies in Jones, Gareth (2013) Organizational Theory, Design, and 
Change, 7th Edition, Pearson Education. Global Edition. 
Class Questions 
1. Identify the four challenges of organisational design, describing them in detail and illustrating 
them by quoting the text. 
 
 
Structure 
33 
 
Structure 
Hikma 
At Hikma “we work as if we were in space”, warns Ana Gajeiro, responsible for the department 
of Quality Control, at the entrance of the production plant of liquid injectable medicines, located 
in Terrugem, Sintra. Few steps ahead, in the first space of the factory, totally closed and sterilized, 
we see two workers of the department of Production wearing suits as those of the astronauts. 
They are making sure that the medicines are eligible to be administered to millions of users. 
Because in here "all the care is not enough and the norms must be respected", says Ana Gajeiro. 
All the divisions of the factory have "open windows [made of glass] so that the entire production 
process is observable", underlines the responsible. Next to this “sterilized” room is the oldest 
production line of the factory, which dates from 1994. 
After the washing, sterilization, and filling (the most common process for every kind of 
medicines, regardless of the therapy) the medicines are encapsulated, being subsequently labelled 
and, finally, packed. And also, here there is a reinforcement of control, either by machines or by 
human “touch”. One of the inspection phases for the quality of medicines is performed 
automatically by a machine called Pinhole, that detects whether there are microcracks by turning 
the vials and "whether the ampoules are intact", says Ana Gajeiro. Only the ones passing this 
test follow to the packaging line. The remaining ones, where any kind of defect is detected, are 
automatically set apart. Over the white corridors of the production plant of this pharmaceutical 
company, which produces antibiotics, anaesthetics, analgesics and cardiovascular, there are 
workers, from the department of Quality Control, who also hold the task of verifying whether 
products are "intact", making regular analyses to various samples. Hikma has several quality 
control laboratories, after all, explains Ana Gajeiro, "the pharmaceutical industry is one of the 
most regulated". Thus, it is no wonder that the department of Human Resources of the company 
strives to attract highly skilled workers, offering very attractive wages and benefits, and having 
also developed partnerships with some of the best national universities in the fields of pharmacy, 
engineering, and medicine. Furthermore, "learning is constant, there are constantly new learning 
initiatives. The younger workers also learn under the supervision of the older ones", says the 
responsible for the department of Quality Control. After the products have passed through all 
these stages, they proceed to the warehouse (with capacity for 2400 pallets of surplus resources 
and finished products) for replenishment of inventory levels and subsequent dispatch [performed 
by one of the teams of the department of Production]. The manufacturing plant produces 
medicines to the national market, but also to more than 12 foreign markets, thereby producing 
thousands of products daily. 
Structure 
34 
 
Hikma, which markets its products mostly to hospitals, sells in Portugal only 4% of its production. 
Everything else is for exporting, with the main destinations being the USA, Germany, Algeria, 
Italy, and Saudi Arabia. From 2004 to 2014 the largest employer in municipality of Sintra, with 
452 direct jobs, has invested over 60 million [Euro] in the manufacturing plant at Terrugem. And 
according to the CEO of Hikma, Riad Mechaloui - one of the officials who led the opening 
process of the factory in Portugal and to whom the various departments report, taking in his 
own hands the responsibility of the decisions taken in the company – the investments will not 
stop here. Untill 2017, Hikma expects to increase this figure by almost 40 million, to 97 million, 
in the expansion and modernization of some areas of the manufacturing plant. Just like it 
happened recently in the packaging department: the previous line had capacity to pack 500 units 
per hour. The new one manages to pack 4000. 
Source: inspired in “Na Hikma trabalha-se como se estivéssemos no espaço”, Jornal de Negócios, September 22nd 
2015; and Hikma.com webpage. 
Class Questions 
1. Which is the type of structure that best characterizes how the company is organized? Why? 
2. Would you recommend the adoption of an alternative structure? If yes, what would that 
structure be and why? 
Other Classes Questions (Session 5) 
3. Which are the four challenges of organizational design? Describe one of them in detail, 
illustrating your answer by quoting the text. 
Structure 
35 
 
Apple (Part I) 
In 1976 a young Steve Jobs, together with Steve Wozniak, founded a computer company from a 
garage. It was incorporated in California as Apple Computer, Inc., and sales of its computers 
grew very quickly. Within a few years, Jobs and Wozniak had already hired a staff of computer 
enthusiasts and had their first production line in place. 
The two Steve's had initially allocated tasks and roles by grouping people based on shared skills. 
One area was dealing with identifying customers’ needs and the products that would satisfy 
those needs, another area was responsible for crafting the appearance of Apple products while 
specialists dealing with problems related to Apple’s production lines (except the design of the 
products) were grouped together. Finally, another subunit was created to manage the 
distribution channels in which the company was present. Jobs saw his main task as designing the 
Apple’s structure in ways that would lead to the rapiddevelopment of new and improved PCs 
(the Macintosh computer was Apple’s only product at the time). By 1985 Apple’s sales had 
exploded to almost 2 billion USD but in that same year Jobs was forced out of the company he 
founded. Among the reasons behind this decision was Jobs autocratic leadership style, with Jobs 
micro-managing a wide range of business operations [despite all subunits having someone in 
charge]. Although a general counsel was created to help the coordination of Apple’s 
organizational departments, it has been noted that “when Steve Jobs was in charge, everything 
flowed through him”. Wozniak departed Apple amicably in 1985 as well. Jobs eventually came 
back to lead Apple in the late 90s, as CEO his first initiative was to create a clear vision and goals 
to energize and motivate employees. Such move was also triggered by Apple’s product line 
redefinition, which culminated in the launch of the first iPod in 2001. Growth, however, posed 
new challenges. On one hand, increasing customer demand was pressuring manufacturing to find 
ways to increase production quickly, on the other hand, the pressure to stay ahead of 
competition placed more demands on R&D and engineering to improve quality and product 
sophistication. Once again, Jobs intervened in Apple’s structure. 
Source: free adaptation from Apple case studies in Jones, Gareth (2013) Organizational Theory, Design, and 
Change, 7th Edition, Pearson Education. Global Edition. 
Class Questions 
1. Identify, justifying with excerpts from the text, Apple’s organizational structure during the 
‘80s and most of the 90’s. 
2. Would you recommend the adoption of an alternative structure? If yes, what would that 
structure be and why? 
Evolution of Structure 
36 
 
Evolution of Structure 
GOffee 
At a time where convenience and efficiency are more valued than ever, Vincent Meyer had the 
idea of starting a new service called GOffee (like “go-coffee”). GOffee Inc. is a startup funded in 
2018 with the goal of delivering a personalized and eco-friendly office coffee experience to 
workers’ desks every morning. Headquartered in an industrial space at Eighth Avenue, New 
York, GOffee is currently delivering 1,000 cups a day, a number that is expected to climb to 
4,000 by the end of the year. 
Every morning, offices like Adhawk, a digital ad firm, enable their office workers to place their 
coffee orders directly on GOffee website. “When people go out for coffee, they’re out for 25 
minutes (…), this way it’s at their own desk. And the coffee has much more quality than coffee 
from a machine and remains warm for a longer time”, said Brett Strassman, finance director at 
Adhawk. GOffee has developed a thermos-like mug made of ceramic, wood and light aluminium 
that can preserve the temperature of the drink for about five hours. “We are happy with our 
mug, but we are still trying to improve it as we get feedback from clients”, Vincent said. Once 
the orders are introduced by the client, the staff at GOffee (6 full-timers and 15 part-timers) 
starts preparing them in the operations kitchen. Instead of one barista* preparing one drink at a 
time, the process is divided in smaller and simpler tasks just like in an assembly line. “We break 
down the process of production, which makes everything go faster than having a single barista 
do everything,” Vincent said. “We know what people’s orders are. It’s a routine. So, every day 
we know we have to make 400 cappuccinos, 400 lattes, whatever. We are far more efficient this 
way. We can make 120 coffee drinks in less than 15 minutes.” The entire work process has been 
made very precise and predictable in order to guarantee high quality and speed. In order to 
address the growing demand for GOffee products the company has created its own algorithm 
to help predict how likely it is for a customer to re-order. This approach allows GOffee to start 
making a coffee even before the client places the order. So far, the accuracy rate is at 74%. In 
the next phase, once enough orders have been prepared, the drinks are then quickly delivered 
(maximum of 30 minutes) in the offices using special insulated backpacks that can fit up to 60 
mugs, stacked, without any risk of spillage. At the end of the day, the mugs are collected and 
carefully sanitised in a special dishwasher in order to be reused in the following day. “The primary 
goal was to make sure we deliver a hot coffee to our clients in a cup that retains the temperature 
and that we can reuse instead of just throwing it away,” Vincent said. 
The GOffee team is still relatively small and composed of coffee lovers working together under 
Vincent’s direct supervision – that makes all the decisions. Each team member contributes with 
Evolution of Structure 
37 
 
his own expertise, and they all try help each other constantly. The full-time team consists of 
Vincent (simultaneously President, CEO, Secretary and responsible for Human Resources) 
whose strengths are the idea creation and business development; Andrew is the marketing 
expert; Pierre is the design expert; Dylan is the operations expert; Carl is the sales expert; Jules 
is the coffee expert (master barista); and the part-timers are mostly assistant baristas to help 
Jules with the production process of the drinks and couriers to deliver orders and collect the 
mugs. 
Right now, GOffee is still operating in beta mode and only has one operations kitchen where 
there is still a very relaxed and familiar environment, but changes are underway. Thanks to the 
capital recently raised in a crowdfunding campaign, two more locations are going to open in 
New York by the end of the year and expansion to nearby cities is already planned for the first 
half of 2020. In order to support expansion, Vincent has already done some research concerning 
GOffee’s current needs in terms of people (the company is already in the process of hiring a 
Human Resources Director and an Accountant Director, both full-time, and more are expected 
to join as the expansion speeds up). According to Vincent, the main challenges GOffee is 
currently faced with are related with his growing management responsibilities related to basically 
everything, from managing the rapidly increasing number of employees (which includes the need 
to identity the tasks and responsibilities and stipulate the knowledge and skills needed for a 
candidate to perform well in the job) and the need for securing additional capital for promoting 
growth. “The way we organize ourselves is going to have to change. We are growing very fast, 
and we are starting to feel the need for a more formalized structure (…). I can’t go on overseeing 
everything. We need to introduce systems and stabilize procedures. We cannot go on like this. 
Fortunately, I am surrounded by amazing professionals that will be able to help me with that. 
Dylan for example will soon oversee the new Operations Direction”, said Vincent. 
*A barista is a person professionally trained in making different kinds of espresso coffees. 
Source: free adaptation from https://www.startengine.com/GOffee & https://nypost.com/2019/10/13/coffee-
delivery-service-straight-to-nyc-workers-desk/ 
Class Questions 
1. "The current organisational structure of GOffee appears to be perfectly adequate for the 
company to face the next phase predicted by Greiner's model." Do you agree with the 
statement? Justify properly, identifying and characterizing the phase in the model of Greiner 
in which the company finds itself and the typology/typologies of organisational structure that 
is/are implicit in the statement. Illustrate your answer with excerpts from the text. 
Evolution of Structure 
38 
 
Apple (Part II) 
After Jobs came back to Apple in the late ‘90s as the CEO, his first step was to create a clear 
vision and goals to energize and motivate employees. Such move was also triggered by Apple’s