IntroductionToBusiness-OP_8D04gAa-52

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Critical Thinking Case
Managing an Extreme Makeover
During a tour of a Toyota Corolla assembly plant located near their headquarters in Bangalore, India,
executives of Wipro Ltd. hit on a revolutionary idea—why not apply Toyota’s successful manufacturing
techniques to managing their software development and clients’ back-office operations business?
“Toyota preaches continuous improvement, respect for employees, learning, and embracing change,” says T.
K. Kurien, 45, former head of Wipro’s 13,600-person business-process outsourcing unit. “What we do is apply
people, technology, and processes to solve a business problem.”
Among the problems spotted early on by Kurien? Cubicles. They’re normal for programmers but interrupt the
flow for business-process employees. Deciding to position people side by side at long tables assembly-line
style “was a roaring disaster,” admits Kurien. “The factory idea concerned people.” So based on feedback from
his middle managers, Kurien arranged classes to explain his concepts and how they would ultimately make life
easier for employees.
Wipro also adopted Toyota’s kaizen system of soliciting employee suggestions. Priya, who has worked for
Wipro for years, submitted several kaizen and was delighted when her bosses responded promptly to her
suggestions. “Even though it’s something small, it feels good. You’re being considered,” she says.
Empowerment in the workplace washed over into her private life. As the first woman in her family to attend
college, she told her parents they may arrange her marriage only to a man who will not interfere with her
career.
Kurien and his managers work hard at boosting employee morale, offering rewards—pens, caps, or shirts—to
employees who submit suggestions to kaizen boxes. And each week, a top-performing employee receives a
cake. Murthy, an accountant who hopes to be Wipro’s chief financial officer someday, spearheaded an effort
to cut government import approval times from 30 to 15 days. He got a cake with his name written on it in
honey. “I was surprised management knew what I was doing,” he says. “Now I want to do more projects.”
With multibillions in revenues, thousands of employees, and a U.S.-traded stock that advanced 230 percent in a
two-year period, Wipro is a star of India’s burgeoning information technology industry. The company’s
paperwork processing operations bear a clear resemblance to a Toyota plant. Two shifts of young people line
long rows of tables. At the start of each shift, team leaders discuss the day’s goals and divide up tasks. And
just like in a Toyota factory, electronic displays mounted on the walls shift from green to red if things get
bogged down.
This obsession with management efficiency has helped India become the back-office operation for hundreds
of Western companies, resulting in the transfer of many thousands of jobs offshore. “If the Indians get this
right, in addition to their low labor rates, they can become deadly competition,” says Jeffrey K. Liker, a business
professor at the University of Michigan and author of The Toyota Way, a book about Toyota’s lean
manufacturing techniques. If Kurien’s management initiatives succeed, experts may soon be extolling the
Wipro way.
Critical Thinking Questions
1. What type of manager is T. K. Kurien? How would you characterize his leadership style?
2. What managerial role does T. K. Kurien assume in his approach to attaining his division’s goal of
improved customer service?
3. What management skill sets does he exhibit?
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Sources: Steve Hamm, “Taking a Page from Toyota’s Playbook,” Bloomberg Businessweek,
https://www.bloomberg.com, accessed November 17, 2017; Shilpa Phadnis, “T K Kurien to Leave Wipro This
Month,” The Times of India, https://timesofindia.indiatimes.com, January 23, 2017; Toyota Resumes Efficiency
Drive,” BBC News, http://www.bbc.com, March 26, 2015.
@ Hot Links Address Book
1. Visit the International Business Leaders Forum (IBLF) at http://www.iblfglobal.org to discover what
today’s international business leaders are focusing on.
2. To learn more about how firms develop contingency plans for all sorts of crises, visit Mind Tools at
https://www.mindtools.com.
3. Who are the leaders of this year’s Inc. 500, and what do they have to say about their success? Find out at
the Inc. 500 site at https://www.inc.com.
4. Want to learn more about Bill Gates’s management style? Go to his personal website,
https://www.gatesnotes.com/Bio, to read his official biography, books, and other information.
5. Most successful managers work hard at continually updating their managerial skills. One organization
that offers many ongoing training and education programs is the American Management Association.
Visit its site at http://www.amanet.org.
6. Search Questia’s online library at https://www.questia.com for leadership resources. You’ll be able to
preview a wide variety of books, journals, and other materials.
Chapter 6 Management and Leadership in Today's Organizations 245
246 Chapter 6 Management and Leadership in Today's Organizations
This OpenStax book is available for free at http://cnx.org/content/col25734/1.7
Introduction
Learning Outcomes
After reading this chapter, you should be able to answer these questions:
What are the traditional forms of organizational structure?
What contemporary organizational structures are companies using?
Why are companies using team-based organizational structures?
What tools do companies use to establish relationships within their organizations?
How can the degree of centralization/decentralization be altered to make an organization more
successful?
How do mechanistic and organic organizations differ?
How does the informal organization affect the performance of the company?
What trends are influencing the way businesses organize?
Exhibit 7.1 (Credit: CDC/ Dawn Arlotta / US Government Works)
Elise Eberwein
EVP of People and Communications, American Airlines
As executive vice president of people and communications at American Airlines, Elise Eberwein’s role
within the structure of the organization might not be readily apparent. After all, you might ask, doesn’t
corporate communications typically involve marketing? And what does that have to do with
organizational structure? As it turns out, quite a bit at the world’s largest airline.
E X P L O R I N G B U S I N E S S C A R E E R S
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7
Designing Organizational Structures
When American Airlines and US Airways finally got the U.S. government’s approval to merge in late 2013,
it was no longer business as usual for Eberwein and her colleagues at the “new” airline. Until the
merger, which basically produced the world’s largest airline with more than 6,000 daily flights and
102,900 employees, Eberwein was head of communications at US Airways—a position she held for nine
years after various other jobs in the airline industry.
Exhibit 7.2 American Airlines jet. (Credit: Joao Carlos Medau/ flickr/ Attribution 2.0 Generic (CC BY 2.0))
Communications and aviation are in Eberwein’s DNA. She worked as a flight attendant at TWA before
moving on to manage communications at Denver-based Frontier Airlines. Her next communications
experience was at America West, which then merged with US Airways, where Eberwein served as
executive vice president of people, communications, and public affairs before she took over the chief
communications job at American Airlines.
Corporation communications is no longer just about marketing. The importance of an effective
communications strategy cannot be understated in today’s 24/7 business environment. Corporate
communication executives have taken on an expanded role in many organizations, according to a recent
survey by the Korn Ferry Institute. Of the senior communications executives from Fortune 500
companies who responded to the survey, nearly 40 percentsaid chief communications officers report
directly to the CEO. In addition, more than two-thirds of respondents believe the most important
leadership characteristic for communications professionals is having a strategic mindset that goes
beyond day-to-day communications activities and looks ahead to future possibilities that can be
translated into achievable corporate strategies at all levels of the organization.
In a company as large as American Airlines, even after the initial two-year integration plan, there are
many departments, unions, and other employees to communicate with on a daily basis, not to mention
the millions of customers they serve every day. For example, American’s social media hub consists of 30
248 Chapter 7 Designing Organizational Structures
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	Chapter 6. Management and Leadership in Today's Organizations
	Critical Thinking Case
	Critical Thinking Case
	Hot Links Address Book
	Hot Links Address Book
	Chapter 7. Designing Organizational Structures
	Introduction*