CASE STUDY: THE PARADOXICAL TWINS: ACME AND OMEGA ELECTRONICS

By Alisha Horo Asmita Karanje Mac Lobo Lincy Thomas Rajiv Venugopal Makushla Santimano Mihir Sikka

Facts of the case

Two Companies Acme and Omega manufacture Printed circuit boards

ACME

OMEGA

Acme retained its original management Upgraded GM to president The annual sales of Acme was $10 Mn Acme had 550 employees Greater net profit Organisation structure was retained

Omega hired a new president and upgraded several of the existing personnel within the plant. The Annual sales of Omega was $8 mn Omega had only 480 employees. Relatively less net profit Doesn·t believe in organisation structure

Changes in the environment

Printed circuit boards

Integrated circuit boards

The Contract
Major photocopy manufacturer was looking for a sub-contractor for IC·s Contract: to assemble the memory unit for its new experimental copier. Projected sales: $5-$7 Mn Both Acme and Omega were geographically close, submitted highly competitive bids and the sample size was 100 units. Deadline: 2 weeks i.e 11th july- 25th july

Comparative analysis of the functioning of both the organizations

Acme
When John Tyler received the blueprints at Acme he sent a memo to the various departments and started working on the project When a particular component was not available at the time of assembly, Acme decided it to still go ahead with the production and install the missing component later, which was very time consuming

Omega
At Omega Rawls had already informed all the department heads about the potential contract they were about to receive and once he received the blue prints, he informed the head that production could begin. They did a make-or-buy analysis and decided on ordering Japanese substitutes for the missing parts.

Acme
There was a friction between the methods engineer and the production foreman as the normal procedure to contact method enggineers for setting up the assembly line was not done. The process was as such inefficient and not well balanced. The method engineers felt useless in the company. All the units had to be taken apart first to conform to the new blueprint and second time again to install the missing parts in the units . As such there was a delay in the production of units at Acme Acme Shipped off the goods with inspecting only one sample out of the 50 units s

Omega
Omega found an error in the connector cable design, they redesigned it and asked for approval from the manufacturer Omega conducted quality test on all the units before shipping them.

Result
Acme Omega

Ten of Acme·s final memory units were ultimately defective. Acme·s delivery was delayed by 4 days as the deadline was 25th july and they delivered on 29th july They incurred further delays for fixing the defective items

Omega·s units passed the photocopier·s firm test.

Analysis of Acme
Acme·s Organization Structure is rigid and Acme compromised on quality to meet the deadline Decision making was only with John Tyler and gave little scope to the engineers to give their inputs Flow of communication is from top to bottom and as such inefficient and it left the method engineers feel unwanted in the organisation. The plant manager is biased and has a short term vision wherein they want the prototypes to be out by any means.

Analysis of Omega
Doesn·t believe in written memos and as such oral communication at times lack clarity of understanding. Omega is overstaffed No proper division of labor Decision making lies with the management Omega is aware of potential contracts it shall be awarded and as such it shows they are proactive in environmental analysis

They supplied units to the manufacturer before the stipulated time. They are efficient in their work as in they studied the design carefully, detected an error and re-worked on the manufacturer·s blueprint. They took the formal approval of the manufacturer and as such they portrayed professionalism It being a trade secret they should have signed a confidential agreement before bringing the error in the design into the manufacturer·s notice.

Reasons for the final contract being handed over to Acme

Long term vision of acme ² wherein they shall work according to prescribed norms when actual production takes place This helped them to reduce the costs by a huge margin- 20% They placed the lower bid initially Acme·s market standing is better than Omega as they have greater sales and greater net profits. They also had benefits of large scale production