Writers Den

Introduction

In a global
business environment where organizations can no longer rely on traditional
factors that historically lead to a competitive advantage such as access to
proprietary technology, exclusive rights to raw materials, or proximity to
customers and markets, many organizations have re-structured to capitalize on
new success factors. In the United States that has resulted in a shift in many
cases from product or service-based businesses to knowledge-based businesses
(OECD, 1996; Powell & Snellman, 2004). Powell & Snellman (2004) define
the key components of a knowledge economy as. .a greater reliance on
intellectual capabilities than on physical inputs or natural resources.”
(p. 201). This case presents the challenges facing an organization as it
transitions from its traditional business model to one that incorporates
greater reliance on the knowledge of its workforce. The focus of this case is
on the role of the organizational behavioral system in facilitating a
successful transition to the new corporate strategy.

The Case Scenario

The Delta Pacific
Company (DPC) has a long history of success. The company has been at the fore
front in the development of information technology since the 1970s and led the
market in technology development, manufacturing and sales throughout the 1980s
to the mid-1990s. DPC was a success story. They consistently met or exceeded
their profit targets, successfully integrated new technology into their
products, and they were considered one of the best employers in the country.
With generous benefit packages, a high quality of work life, industry leading
salaries, and a corporate culture that considered its employees to be part of a
family, potential employees were lined up for opportunities to join DPC.

However, with the
advent of globalization, freer trade, and low cost overseas labor, DPC found
itself slowly losing market share for its primary product: computer hardware.
DPC had prided itself on producing and selling the best products and training
its sales force to develop long term relationships with clients that brought
them back year in and year out for DPC’s technology. Along with hardware, DPC
also sold service contracts and training classes for the end users of their
products. By the late 1990s it became clear to the leadership at DPC that they
could no longer compete with less expensive products being produced overseas.
At one time they could sell their higher priced goods on the premise that they
were of higher quality, but that was no longer the case. Foreign-made products
were now being produced to match or even surpass the quality standards set by
DPC. However, conversations between sales representatives and their clients did
indicate one thing: the clients valued the personal interaction they had with
the sales reps and the personalized advice that they could provide to their
clients to help them to reach their goals. DPC recognized that they needed to
make a change and they believed they had a new vision for their company.

As they entered the
21st century DPC moved away from hardware solutions to business challenges and
shifted instead towards knowledge-based solutions. Rather than selling
equipment, DPC began to market the extensive knowledge of their workforce. DPC
would no longer sell the equipment; they would instead provide integrated
knowledge-based solutions to information management problems. Essentially they
would become a consulting firm that would assist their clients to set up
systems that would facilitate information management. But now their solutions
would go beyond hardware and encompass software, organizational design, data
collection management, work flow and overall information management
re-engineering. Sales reps underwent significant training to prepare them for
their new roles. However, the redesigned jobs were not a good fit for all of
the sales reps. some moved on to other types of positions within the company,
but others left to pursue opportunities elsewhere.

As expected,
profitability declined during the initial introduction of this new organization
mission as employees became accustomed to their new roles. Due to the time
taken to train employees, they were spending less time in the field with their
clients generating revenue and more time in the classroom being oriented to
their new roles. However, the decline persisted much longer than anticipated
and the company’s leadership team, board of directors and the shareholders were
growing impatient with the slow returns. It became increasingly apparent that
while the training, resources, and equipment were in place, significant changes
in the organizational behavior system at DPC were necessary to ensure long term
success.