Concept Analysis and Evaluation of Dell Technologies-Strategy Solution Sample

QUESTION

 

1. CONCEPTS

Dell technologies

1. 1. Corporate governance

Relevant concepts are: agency relationship, managerial opportunism, and corporate governance problem (also known as agency problem). Know the reason why the separation between ownership and management in large companies has the potential to result in corporate governance problem.

The following are among the governance mechanisms designed to minimize corporate governance problem: board of directors, ownership concentration, executive compensation, and market for corporate control.

1.2. Organizational structure:

Know vertical structure. There are two types of vertical structure: flat structure, and tall structure. Know the characteristics a flat structure and the characteristics of a tall structure. Know the problems of a tall structure.

Know horizontal structure. It has several types: simple structure, functional structure, geographic structure, multidivisional structure (M-form), and matrix structure.

1.3. Strategic leadership:

Senior managers are strategic leaders. The top strategic leader is the CEO (chief executive officer). To be effective, strategic leaders (primarily the CEO) need to assume five key roles (these roles are explained in my Teaching Notes).

2. ANALYSIS

BEGING YOUR ANSWERS HERE

2.1. Corporate governance:

State whether your company faces a corporate governance problem (REMEMBER: there is a corporate governance problem when the CEO serves his/her own interests instead of serving the interests of the owners). Explain your answer.

Give the name of ONE governance mechanism your company uses to minimize corporate governance problem. Explain your answer.

2.2. Organizational structure:

Give the name of the type of your company’s vertical structure. Explain your answer. Give the name of the type of your company’s horizontal structure. Explain your answer.

2.3. Strategic leadership:

State whether or not your company’s CEO was effective in exercising ONE strategic role of your choice (Remember: there are five strategic roles). Explain your answer.

3. EVALUATION

3.1. Problem:

State the problem your company is facing (for example: The problem General Motors is facing is slow decision-making). Identify ONE factor that is causing the problem (for example: One factor that is causing slow decision-making is the very tall structure that General Motors has). NOTE: The factor that is causing the problem must come from your analysis.

3.2. Solution:

Propose ONE solution your company should use to correct the problem. Explain how your proposed solution will help to resolve the problem.

 

 

ANSWER

 

1. CONCEPTS

Dell technologies

1. 1. Corporate governance

Relevant concepts are: agency relationship, managerial opportunism, and corporate governance problem (also known as agency problem). Know the reason why the separation between ownership and management in large companies has the potential to result in corporate governance problem.

The following are among the governance mechanisms designed to minimize corporate governance problem: board of directors, ownership concentration, executive compensation, and market for corporate control.

1.2. Organizational structure:

Know vertical structure. There are two types of vertical structure: flat structure, and tall structure. Know the characteristics a flat structure and the characteristics of a tall structure. Know the problems of a tall structure.

Know horizontal structure. It has several types: simple structure, functional structure, geographic structure, multidivisional structure (M-form), and matrix structure.

1.3. Strategic leadership:

Senior managers are strategic leaders. The top strategic leader is the CEO (chief executive officer). To be effective, strategic leaders (primarily the CEO) need to assume five key roles (these roles are explained in my Teaching Notes).

2. ANALYSIS

BEGING YOUR ANSWERS HERE

2.1. Corporate governance:

Yes, there is a corporate governance problem because the CEO focusses on the personal gains and benefits more than the goal of the organization. His decisions are not according to the betterment of the organization.

One corporate governance mechanism followed is board of directors who can look into the working of the CEO and take decisions for the progress of the company and also nullify any wrong doings by the CEO. In this way all the power is not with the CEO.

2.2. Organizational structure:

The vertical structure type is tall structure. There are lot of levels in the company which makes it a tall structure rather than a flat structure. Tall structures generally mean higher pay and regulatory expenses for the diverse administration layers. According to Brent Schlender,2002 his extra administration overhead lessens total compensation and income. Amid monetary downturns, sharp drops in income could mean negative income, which could require huge rebuilding. Tall structures could likewise expand scaling back expenses on account of the severance installments for the laid-off chiefs and their regulatory staff.

The horizontal structure type is matrix structure.

2.3. Strategic leadership:

Yes, the CEO was effective in implementing one strategic role as setting the mission and vision along with the goal of the company but he failed thereafter to work towards them.

3. EVALUATION

3.1. Problem:

The company is facing hamper in innovation. This is because of the tall structure of the company. According to Goran Lindahl,2001 tall structures could hamper advancement in light of the fact that the general population nearest to the end clients don’t settle on asset allotment and plan choices. For instance, if a Latin American specialty unit demands a structure change to react to its neighborhood rivalry, the head office may decline the change solicitation to maintain a strategic distance from the extra advancement and assembling costs. Nonetheless, this refusal could prompt the organization losing its aggressive edge in a critical abroad market, which could result in long haul income misfortunes. In a level structure, the Latin American specialty unit chief would have the expert to affirm the plan change and approve the extra usage costs.

3.2. Solution:

Making a flat structure will help in tackling this problem because there will be lesser levels.

References:

Brent Schlender, “Intel’s $10 Billion Gamble,” Fortune, 11 November 2002, 90. Retrieved on 2^nd April 2019 retrieved from https://www.ukessays.com/essays/business/the-challenges-of-the-organisational-structures-business-essay.php

Goran Lindahl, conversation with author, Carmel, CA, 24 June 2001. Retrieved on 2^nd April 2019 retrieved from https://www.referenceforbusiness.com/management/Ob-Or/Organizational-Structure.html

Rebecca Smith, “AES, Calpine Post Losses for the Quarter: Results Reflect Electric-Power Industry’s Tight Credit, Instability, Declining Margins,” Wall Street Journal, 14 February 2003. Retrieved on 2^nd April 2019 retrieved from https://hbswk.hbs.edu/archive/making-the-decision-to-decentralize#1