Malard Manufacturing Company

Malard Manufacturing Company produces control valves that regulate flows through natural gas pipelines. Mallard has approximately 1,400 employees and has successfully produced a standard line of control valves that are price competitive in the industry. However, whenever the production of a new control valve is required, problems arise. Developments in electronics, metallurgy, and flow control theory require the introduction of new products every year or two. These new products have been associated with interdepartmental conflict and disagreement.

Consider the CV305, which is in process. As usual, the research and development group developed the basic design, and the engineering department converted it into a prototype control valve. Now the materials department must acquire parts for the prototype and make plans for obtaining parts needed for production runs. The production department is to manufacture and assemble the product, and marketing is responsible for sales.

Department heads believe that the future work on the CV305 should be done simultaneously instead of sequentially. Marketing wants to provide input to research and development so that the design will meet customer needs. Production insists that the design fit machine limitations and be cost efficient to manufacture—indeed, it wants to speed up development of the final plans so that it can acquire tolling to be ready for standard production. Engineering, on the other hand, wants to slow down development to ensure that specifications are correct and have thoroughly testes.

All of these controversies with the CV305 exist right now. Department managers are frustrated and becoming uncommunicative. The research and development and engineering departments are keeping their developmental plans secret, causing frustration for the other departments. Moreover, several department managers are new and inexperienced in new product development. Ms. Crandell, the executive vice president, likes to keep tight control over the organization. Department managers must check with her before making major decisions. However, with the CV305, she has been unable to keep things running smoothly. The span of control is so large that Crandell has no time to personally shepherd the CV305 through the system.

On November 1, Crandell received a memo from the marketing department head. It said, in part,

The CV305 must go to market immediately. This is urgent. It is needed now because it provides the precision control our competitors products already have. Three of our salespeople reported that loyal customers are about to place orders with competitors. We can keep this business if we have the CV305 ready for production in 30 days.

Guide Questions1. What is the balance between vertical and horizontal structure in Malard manufacturing?

Is it appropriate that department managers always turn to the executive vice president for help rather than to one another?

2. If you were Ms. Crandell, how would you resolve this problem? What could you do to facilitate production of the CV305 over the next 30 days?

3. What structural changes would you recommend to prevent these problems in future new-product developments? Would a smaller span of control help? A project manager with responsibility for coordinating the CV305? A task force?