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Summary
The case study “Evolving into a Network Organization” describes the transformation of ICG into a network organization. This industrial control maker has always held leading positions in its industry. Numerous factors added to its power, but implementing CAD/CAM (computer integrated design and manufacturing) system among the first in a segment had an especially positive impact on the company’s performance. It turned the working environment into a paperless one. Initially met with resistance like any other innovation requiring additional knowledge, it was later praised for enhancing the ties between engineers and manufacturing that, in turn, decreased time-to-market and bettered the quality of products.
As the company started changing, senior management focused on the idea of further transformations because it realized ICG was not capitalizing its tremendous potential. The decision was to create cross-functional teams that would develop the product throughout all stages of manufacturing. These teams were made up of professionals from different spheres of activities including manufacturing, engineering, scheduling, marketing, and quality assurance.
Their key focus was made on responsibility for profit, cost, time-to-market, and quality. Among the major positive effects of the company’s decision to transform, there is the launch of their software, the Pyramid integrator, that was used for incorporating and standardizing design across products and applying it for generating new products and helped reduce costs. Moreover, it brought acknowledgment to ICG, as it became a profitable product. What is more significant, it entailed another wave of transformations that turned the company from a traditional divisional sized form into a network organization by enhancing the development of a number of self-managed teams involved in different products and customers that operated and cooperated at different levels.
Applying What You’ve Learned
What characteristics of a network organization does ICG exhibit? Which ones are missing, if any? Is ICG a “poster child” for network organizations?
Operating on a three concentric rings basis (core control, Communication and Information Systems, and application services), the newly developed self-organized teams functioned within one or at all circles at once to guarantee high performance. There was a wide range of teams such as the supervisory business team, executive sponsor team, and project teams that were created and phased out at need. So, ICG is a representation of shared responsibility. However, ICG is not a poster child for network organizations because it misses one key characteristic of network organizations – joint control. All power is concentrated in the core of the organization, and it is quite authoritarian, so all decisions are made at the lower levels of the hierarchy.
Why did ICG evolve from a divisional sized form to a networked organization? Were any of the forces discussed at the beginning of this chapter in operation?
The decision to evolve from a divisional sized form to a networked organization was motivated by understanding that the existence of numerous teams and a wide range of products is not necessarily the key to success. The creation of cross-organizational teams that focused on customers and projects and enhancing their cooperation at different rings of the network are the forces that assisted ICG’s evolution. All forces are mentioned further in the chapter.
Final thoughts
I must say after reading this case study that it affected my worldview. What I saw was not only the story of success and evolution but also the way of improving one’s personal life and becoming more productive. The initial step of ICG was determining the priority in the further development and then moving to reach a set goal. Because the company is large, it had to create teams. In the case of an individual, it is only necessary to organize one’s thoughts.
I also think that this case study might be useful in arranging a workplace. ICG proves that shared responsibility in addition to the primary priority is a key to higher performance. This approach can change the operation and outcomes of small firms, schools, healthcare organizations, and governmental institutions because it shows that organization’s strength is in unity.
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