Sherman Computer Repair Solution

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Sherman Computer Repair (Sherman) is a small computer repair company that desires to move into computer assembly to fill the void left by a competitor called Synergetic. Currently, Sherman has three locations where customers can bring broken hardware for repairs. Each of the three locations employs a manager, three computer repair technicians, and a receptionist. Sherman Computer Repair also offers in house repair service, employing 12 mobile technicians. Sherman's impending move into the computer assembly industry is one that has far reaching implications for the company. Sherman must hire a new professional workforce and acquire new technological expertise to make this move successful. This paper will analyze Sherman's external environment, its impact on Sherman's new venture and what changes Sherman must make to its organization structure to make this change a success.

Sherman's current organization design

Organizational structure is the division of labor and the patterns of coordination, communication, workflow, and formal power that guide organizational activities. An organization's structure reflects the company's culture and power relationships and can establish new communication patterns and align employee behavior with the company's mission, vision and goals. The organizational structure enables effective communication and smooth workflow (McShane & Von Glinow, 2004).

Sherman's challenge is to redesign the work environment and organizational structure to move from the present departmental structure to the new team-based structure, developing new HR policies and programs to help employees make the transition. It is also necessary to improve current employee skill sets and/or hire new employees with relevant skills.

A functional structure is a design that groups people because they have similar skills or use the same resources. Functional groups include finance, R&D, marketing, and engineering. All organizations including Sherman begin as functional structures. A functional structure has the advantage of being simple and straightforward, but it has a disadvantage when it comes to handling complex challenges. Sherman like other companies, must adopt a more complex structure in order to deal with a new and complex need. Sherman needs a new organization structure because it needs to implement the production of its new product, assembled computers, in a way that satisfies market demand efficiently and profitably (Jones, 2004). Sherman's functional groups structure is a barrier to the acquisition of new technological expertise necessary to make this venture a success, but the company can mitigate this by considering its external environment and pinpointing Sherman's strengths and weaknesses. By employing its strengths and counteracting its weaknesses through better organizational design Sherman can ensure the success of the new venture.

Sherman's External Environment

An organization's external environment has three components: the remote environment, the industry environment, and the operating environment. The remote environment is made up of economic, political, social, technological, and ecological factors. The industry environment is made up of entry barriers, supplier power, buyer power, substitute availability, and competitive rivalry. The operating environment is made up of competitors, customers, labor, and suppliers (Pearce & Robinson, 2005).

The Remote environment for Sherman Computer is so far the economic, political, social, technological, and ecological factors in the US market. At the present moment the US economy is close to or already in a recession. This represents a weakness for Sherman Computer because economic downturns usually make it difficult to sell personal computers (PCs), the very segment of the technology industry that Sherman is attempting to enter. According to an article by Dan Keeler published in Global Finance magazine, sales of PCs dropped worldwide after the economic downturn that occurred in 2000 (2001). This is a weakness for Sherman which it can overcome through choosing to be a learning organization instead of a hierarchy. A learning organization is one that is agile enough to be able to come up with innovative ideas that can successfully overcome adverse economic conditions in ...