As the second part of the two combined portraits, the purpose of this paper is to conduct a profound analysis of Verbatim in terms of its five organizational dimensions: Networked, Flat, Flexible, Diverse and Global, as a "new" organization, focused on both Verbatim as whole and on the Human Resource department. What the organization and the department face as a challenge and what the roles that the department can play are presented. The following analysis is extended from the five dimensions to another three dimensions, strategic, political and cultural dimension. All analyses are based on the actual data and idea collected and given by the survey and interview. Finally, a conclusion is presented taking into account the first portrait, metaphor and future perspective.
- Networked -
Activates in networked organization are based on team unit with the emphasis on interdependence across organizations. In terms of networked dimension, Verbatim is still relatively departmentalized. People are working in specific work tasks, therefore, each person tends to work on specialized area. However, the nature of networked has been changing recently as the survey results show. People work, interact and share information with other department within the organization, and also there are strong coalitions outside the organization with local community, government agencies, other companies and suppliers (See Figure 2 and 3 in Appendix A). Even though Verbatim is heading to be more networked, jobs are primarily emphasized on individual rather than on teams as fundamental unit (See Figure 1 in Appendix A). What Verbatim has been trying to do is to broaden the organizational structure where people have multiple skills and are able to move dynamically within the organization. Verbatim wants people to be able to adapt to the organization and move from one department to another department, depending on the market situation. The problem Verbatim is facing is that people do not want to give up the past. Accordingly, the change to be more networked organization is in very slow pace.
Human Resource department can play a significant role to this organizational change. The role is to coordinate the effort and help change the culture to permit people to start thinking of the change positively. The reason why the change is slow in Verbatim is that when people start to do some new other things, they feel some fear that they will be penalized and not be rewarded for the new change. Hence, people are likely to be afraid to make changes. Human Resource department is trying to make sure to let all employees know changes are good for them by teaching new skills, which employees will definitely realize it valuable later on. This Human Resource’s action is also adding advantage to Verbatim as whole due to the fact that Verbatim does not have to hire more employees. Verbatim has become more profitable with small and more streamlined organizational structure.
- Flat -
Flat organizations are lean and have less layers of management and they extend much more horizontally. Verbatim has become very flat organization, having basically only three layers. Verbatim believes the three-level-structure creates more accountability and more teamwork. Verbatim has currently 122 employees, who are working in one of the eight departments, in Charlotte headquarter (See Figure 1 in Appendix B). President is placed in the first layer, and the second layer consists of managers in high-level professionals, and the third layer is the administrative layer. Each department has been empowered to make decision without upper-level management compared to a couple years ago (See Figure 4 in Appendix A). Combined with the fact that Verbatim had laid some employees off, the survey results show that employees think Verbatim has become leaner (See Figure 5 in Appendix A). On the other hand, there are still some employees who think Verbatim does not have few layers, indicating that Verbatim can achieve high degree of flat structure further (See Figure 6 in Appendix A). The challenge Verbatim is facing with regard to its nature of flat is that communication does not go smoothly sometimes along with the problem of information cascade. In fact, Verbatim has very difficult time with communication as far as both from top-down and also getting the message from the bottom up. Verbatim needs to facilitate the flow of communication throughout the organization.
This communication challenge is what Human Resource department considers as one of the biggest goals that must be achieved. Human Resource department is trying to improve communication in organization through public forums with employees. In public forums, all employees are explained what is happening around Verbatim and they are free to ask any kind of questions to further get tuned to the current business situation where Verbatim is involved. Moreover, employees can have information on Verbatim’s parent company, Mitsubishi Chemical Corporation (MCC). As a subsidiary of MCC, what happens in Tokyo has momentous effect on Verbatim. Verbatim has been trying to be as profitable as it can, especially some difficult things happened in Japan or other part of business areas.
- Flexible -
Flexible organizations are able to respond to variety of needs of employees, customers, and other stakeholders immediately on time to keep their competitive advantages. Despite the fact that Verbatim does not have flexible work schedule, Verbatim can adjust or respond rapidly to employees' needs or customers' needs, according to the survey results (See Figure 7 and 8 in Appendix A). Another flexibility measure, which is whether or not Verbatim develops systems that encourage innovation or creativity, shows relatively disappointing result (See Figure 9 in Appendix A). As mentioned earlier in networked section, Verbatim has a very slow pace of changing can be explained further by Verbatim’s cultural nature that does not strongly encourage employees to have radical changes. The challenge on flexible dimension is that Verbatim has lost its flexibility to customers due to the installation of the new computer system. The new system is SAP system that is also used throughout MCC as well. The old system had been used for almost 20 years and everybody knew how to run the old system. Since the SAP system is very new to everybody, nobody knows as well enough as the old system, which in tern results in inflexible response in supporting customers on a short-term basis.
With respect to flexibility, the most important role that Human Resource department plays is to cross train employees to be multi-skills that is crucial characteristic for employees in very flexible organizations. Training, enhanced by the learning curve, is of essence for all employees in Verbatim, mainly led by the program held by the Human Resource department.
- Diverse -
Diverse organizations have variety of perspectives, career paths and incentive systems and are primarily derived as organizations facilitate their degree of networked, flat and flexibility. Diversity has been very difficult in Verbatim due to the fact that Verbatim had been operating in a loss and had to shrink its business. From a standpoint of career paths, Verbatim currently does not have variety of career paths (See Figure 10 in Appendix A). Nevertheless, Verbatim has been trying to give opportunities to employees to move from one operating group to another group, which includes not only group in Verbatim but also group in the US Mitsubishi groups. In light of this, Human Resource department had a meeting two months ago with all Human Resource managers and Mitsubishi to discuss the possibility of career movement. As a result of the meeting, Mitsubishi Chemical America, Western Litho Plate & Supply and Mitsubishi Polyester, which are all MCC’s subsidiary, became some of examples that people can move in. This movement will have a positive affect on the incentive or reward systems that were graded relatively poor by employees (See Figure 11 in Appendix A). On another aspect of diversity, people in Verbatim have a wide variety of backgrounds in terms of their majors in university, nationality, gender or ethnic backgrounds (See Figure 12 in Appendix A). However, when it goes to management, Verbatim is not diversified, given the fact that all management is either Japanese or male.
People in Verbatim have a wide variety of backgrounds can be well explained by what Human Resource department has been doing on their recruiting activity. When Verbatim recruits for new candidates, it recruits with black universities, minority publications as well as some of the governmental agencies. The department keeps the statistical records to see what kind of candidates Verbatim is getting or what kind of backgrounds candidates have to further improve the degree of diversity.
- Global -
Global organizations have a strong connection with customers and suppliers both domestically and internationally to sustain the profitability and competitive advantage by seeking reduction in cost or developing new market. Verbatim has broad suppliers' and customers' networks across the US (See Figure 13 in Appendix A). Verbatim is, by far, very global organization, doing business in North and South America, Europe and Southeast Asia See Figure 14 in Appendix A). Suppliers' networks have been broad that Verbatim purchases products from Japan, China, Singapore, Mexico, and several countries in Europe as well. As a subsidiary of a Japanese company, Verbatim keeps the lines of communication open as far as the strategy is focused on global market. Obviously, the challenge is how to purchase products at fair and competitive prices mainly from MCC and how Verbatim can best sell the data storage products around the world using the strengths of each one of its pieces of businesses to be a market leader worldwide.
One of the main Human Resource department’s roles is to make sure Japanese employees, coming form MCC, understand what the laws and the customers are in the US. In addition, the role is to help them with any cultural issues that they have to overcome. The other part is to coordinate with MCC as frequently as the department can to share the responsibility and to take care of expatriate employees, making sure that Verbatim follows the worldwide policies and philosophy of Mitsubishi.
Three Dimensions As An Organization
- Strategic Dimension -
On the strategic dimension, organizations have to design effective and efficient way to flow the information all the way through the organizations. Most of the information in Verbatim comes from the second layer within an organization, which is the managers' layer. As the survey results show, the flow of information is designed relatively in decent way (See Figure 15 in Appendix A). Currently, it is managers' responsibility to report up all the information to the top and outside. It is also managers' responsibility to push down what the goals Verbatim is trying to achieve and to make sure to keep people on course in the direction of goals. Human Resource department has been a coordinator of communication with regard to the information flow, making sure right information is shared with employees and also information is open to those who need to know. As another strategic dimension, the way in which Verbatim sorts people is by employees' backgrounds that they have developed within the organization, which is working effectively (See Figure 16 in Appendix A). Verbatim has a lot of people who have worked for a very long time, therefore, most employees' backgrounds have been developed into particular expertise. Here, what Human Resource department has been trying to do is to cross train employees to essentially broaden the roles to give them more opportunities.
- Political Dimension -
Verbatim has primarily six stakeholders: MCC, Customers, Local Government, Suppliers, Local Community, and Banks (See Figure 2 in Appendix B). Depending on the nature of relationship between Verbatim, each stakeholder expresses diverse preferences that have strong effect on Verbatim’s decision making. First of all, as the only shareholder, MCC requires Verbatim to contribute to the profitability as one of the Mitsubishi group members. Customers dictate that Verbatim sells quality product at a competitive price, which is the biggest concern for all customers. Local government used their laws and regulations to make sure that Verbatim is a responsible business citizen to the community, particularly in the areas of paying taxes, being a good employer and being friendly to the environment. Suppliers dictate that Verbatim pays fair prices for goods and services. Local community reaches out the company to support efforts that are being made in various areas such as schools from elementary schools to the local colleges. Finally, banks dictate the way in which Verbatim uses the facilities to make sure they are clean and safe place to work. More importantly, banks dictate how Verbatim moves money between customers, suppliers and MCC.
- Cultural Dimension -
Most of the employees have worked for either Verbatim or Mitsubishi for a long time. For that reason, there exist two cultures, Verbatim culture and Mitsubishi culture, within the organization. The Verbatim culture originally comes from people working for Verbatim from the start of when the business headquartered in Charlotte. Most of them started working when Verbatim was in the stage of profitable business, therefore, the culture evolved very fatherly or paternalistically. Verbatim is more than just a place to come to work in order to get paychecks and benefits. Because of that, they expect to be treated like as one of the members in family. Where most of the employees have seen a conflict is when Japanese managers do not understand the family feelings of employees, which made employees feel like the company has been less of family atmosphere. And it has taken a long time to develop understanding on both sides of what is expected in business. Although, the complete bridge has not been made yet, the gap has been reduced tremendously, leading the two cultures to become more cohesively (See Figure 17 and 18 in Appendix A).
Conclusion
Verbatim has been shifting to a "new" organization to seize its ultimate goal to be a market leader in the date storage industry. It is true that the industry is extremely competitive due to the rapid change and progress in technological innovations. It is also true that the market is growing in a remarkable rate in each market segment. Even though the CD-ROM drive market is expected to shrink, 3 ½"disk, DVD-ROM and CD/DVD writable markets are expected to grow robustly in this coming couple years (See Figure 3 through 6 in Appendix B). Verbatim sees this competitive industry and the growing market as a chance to further establish a solid position in the industry, selling its high quality products to customers all over the world as sales and marketing company. There are still some efforts that need to be done to fully become ready as a "new" organization especially in flexible, diverse and cultural dimensions taking into account the survey results. What is most important for Verbatim is not the new computer system, but the cultural change with the objective of creating a positive atmosphere among the employees. Although, the new computer system, once properly understood by all employees, will facilitate the customer satisfaction with flexible response, until the cultural change occurs from the bottom of the organization, Verbatim cannot entirely achieve its ultimate goal and appreciate the strength as a "new" organization. As it is presented in Verbatim’s metaphor, the company is more than willing to grow with its solid spirit, motivation and determination, which are all to be mixed with cultural and human dynamics within the organization.
Metaphor
"A wounded fighter, who has been in a dark cave for a long time, stopped the bleeding and is about to seize the light with his solid spirit, motivation and determination ~ Entrepreneurial Venture."
Ancona, Deborah., et al. Managing for the Future: The "New"Organization. Ohio: South-Western College Publishing, 1996
Ancona, Deborah., et al. Managing for the Future: Integrating Multiple Perspectives. Ohio: South-Western College Publishing, 1996