Radio Shack Corporation’s Outputs

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Table of Contents

Introduction
Discussion
Conclusion
References

Introduction

Modern theories of organizational structure and behavior tend to give predetermined ways to solve problems. But in complex environments, this might not always be practical To overcome this drawback David A Nadler and Michael Tushman, both authorities on organizational behavior have developed a model which can analyze the working of organizations on a deeper and more day to day basis. The model is called the Nadler Tushman Congruence Model. The purpose of this paper is to analyze Radio Shack Corporation with the help of this model with focus on the company’s outputs.

Discussion

Before going on with the analysis it would be better to understand some basic characteristics of organizations that are critical for its success. They are internal interdependence, capacity for feedback, equilibrium, equifinality an adaptation. Internal interdependence simply means that different components that make up the organization are interdependent. It is possible to get feedback about the various activities of the organization. How this feedback is analyzed and used will be a factor in its success. Equilibrium refers to the organization’s capacity to attain equilibrium among its various components. “Equifinality holds that a given outcome can be reached from any number of different developmental paths.” (Candice & Lewis, 1987).

Adaptation refers to the organization’s capacity to adapt to external environment.

The Congruence model of Nadler and Tushman: The Congruence model is an attempt to see how well the different components in the organization fit together or is in congruence. (Nadler & Tushman, 1980, p. 5). In order to achieve this, the following factors have to be considered namely, inputs, outputs, components of the transformation process and the way they interact with each other. The authors say that this model is concerned mainly with behavioral systems in an organization.

Inputs

Inputs are not the focus of this paper and hence, only given a brief review. These include the environment, resources, history of the organization and strategy. The paper states that the last input is the most important for an organization.

Key organizational components

Before discussing outputs, the key components in an organization should be given. They are the tasks to be performed, the individuals, the formal organization and the informal organization.

Outputs

Outputs of an organization usually refers to the product manufactured or services rendered by the company. But in this context, the outputs include in addition to the above, the contribution made by groups, the organization as a whole and individuals for producing the product or rendering services. It is their contribution which ultimately reflects on the organization’s performance. In other words, even individual level behavior can affect the productivity of the organization.

The authors say that in order to evaluate performance, the following factors should be considered. The first is the achievement of organizational targets, (predetermined by strategy) and how successful the organization is in achieving it. The second is to determine the quality of resources and how effectively they are being used. The third factor is adaptability, meaning how well the organization adapts itself to changing external environment.

The transformation process

This is the most important section in the model which describes the actual transformation process by using strategy which aims at making an organization efficient. The model takes the organization and its components as key to the transformation process. The strategy of the organization will define the tasks to be performed so that defined targets and outcomes may be achieved. This fact is that success depends on how well the other components are able to understand and perform these tasks.

The second component is the individual and it is necessary to understand his skills, competency, expectations, perceptions and other social factors like demography, background etc. The third component, the formal organization has to be analyzed as a whole. The final component is the informal organization which is a common feature in most organizations.. This is a very strong component and can have a lot of impact in the working of the organization.

Congruence

The next step is to assess the level of congruence between two pairs of these components and what steps if needed be taken to increase the level of congruence. For example, the efficient performance of tasks depends on the skill and mindset of the individual. If the congruence is high the task will be performed efficiently. In this way a total of six pairs of congruence can be formed using the key components. They are individual/organization, individual/task, individual/informal organization, task/organization, task/informal organization and organization/informal organization. The organization taken as a whole will also have a level of congruence just like the key components have.

The process of analyzing organizational problems

This section will be described using the Radio Shack Corporation as a basis. Relevant parts from the above sections will also be included here. The company was formed in 1921 as a single store for selling radio equipment to ships and ham enthusiasts. The company also began dealing in high fidelity equipment during the 1940’s. By the 1960’s the company started its own brand called Realistic. But the company was in a bad shape financially and was acquired by Tandy Corporation in 1963. The company started marketing popular electronic gadgets and continues it right through to its present day. (History, 2008).

Its range of products now include phones and radio communication equipment, portable music, cameras, camcorders, computers, power and battery equipment, toys and games etc. The company has nearly 4000 outlets and 35000 employees (small area) and is a Fortune 500 company.

The problem with radio shack strategy is that they are now not able to keep up with type of products that consumer want. They are also not able to offer products at competitive prices. Moreover the small store format seems to work no longer as customers prefer to shop at competitors like Circuit City and Best Buy. Another problem is that consumers are confused about the number of privately labeled products owned by the company. (Ripper, 2006).

The key components of the company are the tasks, the formal and informal organizations and the individuals who work for and manage the company. The basic outputs of the company are electronics and components. But the problem faced by the company has been made clear by the previous sentence, i.e. selling irrelevant and outdated equipment and parts. Other outputs include attainment of goals, utilization of resources and adaptability. It appears from the Annul report of 2007 that the company has been able to achieve and even exceed its financial targets except for sales. Sales went down from 4.7 billion USD to 4.2 billion USD.

But operating income and net income went up dramatically from 156 million to 389 million and 73 million to 236 million respectively. (Selected financial data, 2007). This trend did not reflect in the first quarter of 2008 when both revenue and sales fell when compared to the same quarter of 2007. Resource utilization is also efficient by the existence of its small stores and kiosks giving customers easy access. But this may change as customers may prefer to visit bigger and well lit stores of competitors. In the case of adaptability, the company is lagging behind. The existence of a large number of own brand products is also confusing the customer. They prefer to buy whole components like TV and computers from branded retailers and prefer RadioShack for components only.

As per the congruence model the process for solving organizational problems is as follows. The managers at the company have to follow the steps given.

Identify symptoms: The product strategy in RadioShack has to change in tune with consumer demand. The company should reduce its own branded and obsolete products
Specify inputs: Change store style, reduce manufacture of own brands.
Identify outputs: Change products that are being sold.
Identify problems: Same as a, b, and c above.
Describe components: The components here are managerial staff, the manufacturing staff, maintenance staff, administrative staff and sales staff. There is also the informal organization and groups. Finally it includes the individuals who work for the company.
Assess congruence: The main lack of congruence seems to be between the tasks and the employees. They have been assigned tasks like selling outdated and confusing products which they are unable to sell. If this problem is addressed to the level of congruence will increase. This seems to be the main problem area for the company.
Generate and identify causes: Lack of in demand products, store style, too many own brand and outdated products
Action steps: Implement steps given in the above point.

Conclusion

It can be seen that even though the company recorded improved earnings when compared to the previous year, there are several problems that need to be addressed. The main issue is the type of products they are selling. The next issue is the store style and size. The lack of congruence exists in this area. In other words employees are given tasks which they are unable to accomplish. If this situation goes on unchecked, RadioShack Corporation will find itself in bigger troubles in the futures. It is best that the company addresses these problems as soon as possible. If so the company can regain some of the lost glory it had achieved in the past.

References

Candice Feiring., & Michael, Lewis. (1987). Equifinality and multifinality: Diversity in development from infancy into childhood: Abstract. Biennial Meeting of the Society for Research in Child Development (Baltimore, MD). ERIC. Web.

Nadler, David A., & Tushman, Michael L. (1980). A Congruence Model of Organizational Behavior. A model for diagnosing organizational behavior. AMACOM , P. 5. (Paper Supplied by the customer).

History. (2008). Radio Shack Corporation. Web.

Ripper, Tom Van. (2006). RadioShack gets slammed. Forbes. Web.

Selected financial data. (2007). RadioShack Corporation. Web.

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