BENNETTS MACHINE SHOP, INCOrganizational Theory (AOW 354)

NAME OF MEMBERS :NORLAILIDA BINTI DZULKIPLI ANITH ZAHIRAH BINTI AHMAD KAMAL SYUHAIDAH BINTI SUHAIMI MUHAMMAD SHAFIQ BIN ABDUL WAHAB MUNSHI AYMAN FUAD LEADER MEMBER MEMBER

MEMBERMEMBER

BACKGROUND OF THE COMPANY 1975Pat

decided to start his dream plan. business finally got name and incorporated it

1977Pats

as Bennett's Machine Shop, Inc and rent a building on

Prien Lake Road. 1979Business

flourished (earned huge profits, and also

borrowed money from a bank for business). Expanded

from engine rebuilding into engine installation

(failed).

By

1987 Three types of work: o Engine Rebuilding o Over-the-fender Work o Tool Sharpening and Modification (Boeing Contract) to find innovative ways of repairing and

Mission

renewing mechanical equipments and operating systems frequently of all kinds.

PROBLEM CONCERNING THE COMPANYo

Major Problem Management system: Pat alone manages all the three departments of his shop. It shows when Bennetts was unable to set up a good functional structure and control system as the company expanded. Pat not applying the hierarchy of authority which is who report to whom and the span of control. Poor organizational structure: Bennetts does not have Machine Bureaucracy structure as very large, typically mature, and the technical core is often oriented to mass production.

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Weak of structural dimension: The formalization and standardization is not emphasize seriously. Pats Bennett does not implement any rules and regulation in term of management, operating, marketing or even human resources. Finance: Pat needs to manage their finance in a better way because it is seen from the case study that the company has got into crisis because of their misuse of funds.

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Minor Problemo

Marketing strategy:

A sustained effort to smooth over periods of slack demand with increased advertising would stabilize the core business.

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Lack of professionalism:

Bennett department management is lack of skill workers. Pat Bennett should employ them who have some knowledge and also need a supervisory hierarchy.

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Environmental issues: The environmental issues is facing by Pat Bennetts is that Pat should find another location or new location to open their shop because many complained from the community.

SOURCES OF PROBLEMS SWOT ANALYSISSTRENGTHS 1) Engine rebuilding 2) Marketing strategy 3) Skills in business of machinery WEAKNESSES 1) Poor in management system 2) Poor in skills and knowledge of workers

3) No fit between strategy and structure

OPPORTUNITIES 1) Unique competence 2) Exploit general skills 3) Concentrates on core business

THREATS

1) Competition2) Too much dependence on Boeing

ALTERNATIVE SOLUTIONS

Bennetts should improve the companys position in its core business of engine rebuilding by embarking on a marketing strategy.

Advantage by using this method is for attracting the customer, to known what the customers need and to maintain demand in their core business.

Disadvantage of this marketing strategy are more to money and time. How much money and time are need allocated to this marketing?

Bennetts should improve his Management System by subdivided the task into categories according to the employees function.

Advantage in this management system, make the Bennetts to proper detail planning and manage his company so that the core competence which can bring great business to him. In disadvantages, the company some time requires plenty of time to change the management system.

Bennetts needs to overhaul and redesign organizational structure.

Pat supposed hired those who are have skills and knowledge to make job better efficiency and order to increase the productivity. Should hire a business consultant. The consultant would be charged with assisting with the set up of a formal organizational structure.

Form disadvantages side, when company involves or redesigns new structure they need a lot of money and time (in term of hiring workers).

Bennetts needs to increase standardization and formalization, and also introduce rules and procedures for control.

When increasing the standardization and formalization it will improve the efficiency and effectiveness of that company. Involve money and time, and to excessive formalization, which may include stifling employee creativity and innovation as well as slowing the organization's responsiveness to critical issues and problems too.

Bennetts needs alternative sources of fund.

Some specialized financial institutions and public funding institutions in general can reduce the financial risks of private commercial banks through loan guarantee and counter-guarantee programmers and participating in equity funds for company. Its depend on what sources fund that the company taken. In this Bennetts case study, when they involve or borrow money from the specialized financial institutions or public funding institutions their debt will increase because they need to pay interests and may be some of the financial institutions request to pay to them with the interest of half yearly and at a fixed rate.

CHOOSEN ALTERNATIVE AND JUSTIFICATIONReason for chooses alternative o Bennett needs to overhaul and redesign organizational structure.

Bennett Machine Shop Inc must use hybrid structure that combine with functional structure and horizontal structure. The hybrid structure tends to be used in rapidly changing environment because they offer the organization greater flexibility. With the combination functional structure and horizontal structure the company profit could be tied.

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Bennett needs to increase standardization and formalization, and also introduce rules and procedures for control. When increasing standardization and formalization, and also introduce rules and procedures for control can make company more effective; then it also can reduce and control their cost of operation.Bennetts needs alternative sources of fund. The company needs to find the other sources of fund from other institution of financial to support their business. Then, with this alternative the company also can payback all their debt and standardize the worker salary by every monthly.

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Reason not chooses alternative. o Should improve the companys position in its core business of engine rebuilding by embarking on a marketing strategy.

This alternative must use a lot of money and time. As know the company have a problem in financial and they also dont have enough money to rolling the business.

CONCLUSION

Pat Bennett should focus on organizational structure and strategy issues. Pat Bennett also should focus in their core business and solve their financial problem. Need to redesign organizational structure to improve their productivity and to smooth their production and operation system.