Case Study: MRA Associates, Inc. and Xecodynamics
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The final assignment consists of a case study involving two fictitious companies—MRA Associates, Inc., and Xecodynamics, a company MRA Associates plans to purchase. Read and analyze the scenarios described below, then write a paper of at least 15 – 20 pages (excluding title, abstract and reference pages) addressing the numbered points of the assignment listed below under Paper Part 1 and Paper Part 2. In addition to your textbook and other required readings, reference at least eight additional academic resources in your paper.
Scenario Part One:
MRA Associates, Inc. (a fictitious company) is a successful, well-respected, mid-sized engineering consulting firm, based in Denver, Colorado. The company provides consulting services and innovative solutions to address environmental challenges faced by companies, government entities, and public agencies. MRA Associates specializes in the remediation of groundwater contamination, biohazards clean-up, and industrial wastewater treatment solutions. The company has 18 offices, located in major metropolitan areas throughout the country. The company prides itself on designing and implementing breakthrough solutions, and uses cutting edge technologies to assess problems, design strategies, and implement solutions to successfully manage clients’ environmental challenges in a cost effective manner. For comparison purposes, two of the biggest competitors of MRA Associates are URS Corporation and Brown and Caldwell (actual companies).
MRA Associates is organized in a traditional fashion for environmental consulting firms, with geographic regions composed of groups of local offices, each managed as a separate profit center. Most, but not all, local offices have at least one technical specialist in each of the company’s three areas of specialization—groundwater contamination, biohazards cleanup, and industrial wastewater treatment solutions. Regions report to the home office and are accountable for profit and revenue goals. The company’s founders (who comprise most of the top management team) and the regional managers own the majority of the company’s stock. Clients with needs that cover more than one region are handled by account managers, who are instructed to work cooperatively with regional managers to integrate services across profit center boundaries, working with technical specialists from more than one local office. The home office steps in when disputes arise between profit centers and account managers. This kind of dispute can occur when the goals and profit motivations of regional managers and account managers are not aligned.
Approximately two-thirds of the 200 staff members at all levels are trained as engineers or scientists, many with advanced degrees. Few members of the management team have any formal training in management theory or practices. When compared with much larger competitors, MRA Associates believes that its competitive advantages are superior customer service and technological innovation. Consequently, the employee incentive compensation plan stresses client satisfaction and demonstrated technical excellence, as well as profit and revenue objectives. A recent survey of staff members at MRA Associates shows that the majority of employees feel committed to the company because of the high value placed on professionalism and technical excellence. Staff turnover is very low. MRA Associates has achieved several years of profitable growth and currently has strong cash reserves.
Paper Part One:
1. Based on the description of MRA Associates, Inc., describe the organizational structure the company currently has in place and its phase in the organizational life cycle. What are the advantages and disadvantages of the current organizational structure? How is authority and control dispersed and managed? How is specialization and coordination handled? Under what circumstances might a matrix structure be appropriate for MRA Associates? How might a change to a matrix structure affect individual staff incentives?
2. Describe the levels of technical complexity, task variability and analyzability, and task interdependence of MRA Associates, referencing, as appropriate, the theories of Joan Woodward, Charles Perrow, and James D. Thompson. Based on your analysis, describe the optimal kind of organization structure that seems to fit the characteristics of MRA Associates and explain your rationale.
3. Describe the ways managers at MRA Associates can encourage innovation and creativity within the company. How would modifications to organizational design and structure at MRA Associates facilitate the innovation process?
Scenario Part Two:
During the past year, MRA Associates, Inc. has been evaluating the potential purchase of Xecodynamics (a fictitious company), a small firm based in San Diego, California that designs and manufactures components used in clean-up operations at environmentally-contaminated sites. These components—which are used widely throughout the environmental remediation industry—include electronic systems such as groundwater level monitors, remote chemical sensors, and remote electronic data storage devices. Xecodynamics has three key divisions—marketing, sales and customer education; product development and testing; and manufacturing, shipping, and customer support. The company hires independent contractors to install products at the request of its customers.
Most of Xecodynamics’ sales efforts are focused on companies like MRA Associates who recommend Xecodynamics’ products to their clients for purchase on specific projects. Manufacturing occurs in a single location at the San Diego facility. Most manufacturing staff have a high school level education, have learned their tasks on the job, and are hourly, non-unionized employees. Xecodynamics is owned by three people, an engineer who developed the original products and two venture capital investors who are not technically trained. The company had expanded rapidly in the seven years since it was started, but has been struggling recently due to a shortage in investment capital plus the emergence of new competitors. Xecodynamics welcomes a potential purchase by MRA Associates because of the influx of both cash and management expertise that Xecodynamics leadership believes will help the firm better respond to the market need for well-designed components. The company hopes that some of its internal leadership struggles over the vision and future direction of the company will be mitigated by merging with MRA Associates, a much older and more stable company.
MRA Associates believes that acquiring Xecodynamics will give the firm a distinct advantage in the highly-competitive environmental remediation industry because the acquisition will enhance the image of MRA Associates as a technological innovator. Xecodynamics covets MRA Associates’ client list as high value potential customers. MRA Associates believes that the addition of products will provide a new profit stream and a platform for the technical experts at MRA Associates to create innovative new products which can be manufactured in-house. The current venture capital owners of Xecodynamics believe they can make major changes in the profitability of MRA Associates, once they join the management team.
Paper Part Two:
1. Describe the organizational structure of Xecodynamics. What are the advantages and disadvantages of the current organizational structure? If Xecodynamics remains a standalone company, what indicators will signal to the leadership team that a change in organizational structure is necessary for the firm to continue to grow and prosper?
2. If MRA Associates purchases Xecodynamics, what kinds of challenges will the management team face in restructuring the organization to accommodate Xecodynamics staff and operations? What kinds of resistance to change are likely to be encountered as Xecodynamics is incorporated into MRA Associates? What cultural implications can be expected as a result of the merger of the two companies?
3. MRA Associates believes that at least part of the manufacturing currently taking place at Xecodynamic’s facility in San Diego, California could be outsourced to Mexico to take advantage of the lower wages and costs of doing business across the border. How would a move to outsource core manufacturing processes to Mexico change the culture of the organization? What are the ethical considerations that would come into play in making an outsourcing decision?
4. If MRA Associates purchases Xecodynamics, the management dynamics of the firm will change as the current owners and managers of Xecodynamics, all of whom are interested in sharing power and control in the merged company, are incorporated into the firm. How will structural and cultural changes in the merged company affect the relative power of both the existing managers in MRA Associates and the new managers who come from Xecodynamics? How might this power sharing change affect employees?