Organizational Analysis of Dell Inc - Essay Example

Running Head: DELL, INCORPORATED: AN ORGANIZATIONAL ANALYSIS Dell, Incorporated: An Organizational Analysis in APA Style by Name Course Name University What is the company's mission statement or overriding objective Dell Incorporated's (Dell) mission statement is stated as follows: "Dell's mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. In doing so, Dell will meet customer expectations of: Highest quality Leading technology Competitive pricing Individual and company accountability Best-in-class service and support Flexible customization capability Superior corporate citizenship Financial stability." In which nations does it produce and market its products Dell conducts its operations worldwide and is managed in three geographic segments where it distributes its products: the Americas; EMEA (Europe, Middle East, and Africa); and APJ (Asia Pacific and Japan). The Americas Region which is based in Round Rock, Texas covers the United States, Canada, and Latin America. The EMEA region is based in Bracknell, England and caters to the customers in Europe, Middle East, and Africa. The APJ segment is headquartered in Singapore and encompasses the Pacific Rim including Australia and New Zealand (Dell Annual Report 2005). In order to support the worldwide demand for its products, the company established seven production plants in different countries worldwide. Dell's produces its diverse products on its manufacturing facilities located in: Austin, Texas; Winston-Salem, California; Lebanon, Tennessee; Eldorado do Sul, Brazil; Limerick, Ireland; Penang, Malaysia; and Xiamen China (Dell Annual Report 2005) Are its production facilities centralized or decentralized As stated above, the production activities of Dell are conducted in seven locations worldwide. From this, it can be seen that the manufacturing operation of the company is highly decentralized. The company does not utilize a single production plant to manufacture all its products. Instead, it opts to establish manufacturing facilities in order to reap specific business opportunities present in a region. The geographical locations of the manufacturing plants are very much strategic as they embody the primary business model and strategy of Dell which is cost leadership. For example, Brazil is chosen as a site for production because of "its sophisticated labor force, its economic incentives to attract technology manufacturing companies in the region, and its strategic location as an export hub to other South American countries" (Mahoney, 1999). The decentralization of production enables Dell to customize its products according to customers' specifications. This is also strongly in line with the company's efforts of motivating employees through empowerment. These factors hinder Dell in confining its manufacturing activities in a single location. Does it standardize products or adapt them for different markets Dell strongly boasts its strategy of customizing its product and services according to the specification of the customers. The company recognizes that each customer should be provided only with the products and services which suit their specific needs. Thus, the company has installed a direct business model in order to specifically address each customer's wants. The company's website states that "Culture plays a significant role in companies that do business around the world. Dell's goal is to be great globally while being mindful of local issues and culture" (Dell Incorporated 2006). It can be seen that the computer manufacturer follows this commitment closely when conducting its operations globally. Dell does not often deal with the question of tailoring its products to its specific market as it is imperative. The company often deals with the issue of adapting its direct business model to a specific market. It can be seen that Dell painstakingly takes into account the culture of its host country. It can be recalled that Dell recognized the huge potential in China but also see the people's apprehension to its business model. In order to remedy this problem, Dell initially acquaints customers with their products through showrooms and displays. It should be noted that the first Dell computers were sold through distributors. What type of organizational structure does it have Dell operates on a very unique organizational structure known as the "virtual company" or the "value web." This type of organizational structure is in line with the company's commitment of providing customized products and excellent services to its clients. The value web is characterized by "a focus on few key strategic activities and extensive outsourcing of non-strategic activities" (Kraemer and Dedrich 2002). It can be seen that Dell chooses to outsource some of its processes in order to focus on its strategic and core activities. It should also be noted that when compared to a typical computer manufacturer, Dell has significantly reduced physical flows by substituting them by information flows. In order to support this organizational structure, Dell has heavily invested in information technology. The figure below shows the organizational structure of Dell. Figure 1. Dell's Value Web Model Source: Kraemer and Dedrick, 2002 What becomes apparent in the figure is Dell's integrated supply chain heavily dependent which is heavily dependent on its suppliers. It should be noted that Dell does not fully manufacture its products but only assemble finished components from its various suppliers. The company even relies on other business organizations to provide after-sales support service. An example of this is Dell's call center in Bangalore, India. Which of the two types of international strategy does it seem to follow From the above explanation, it can be seen that Dell Incorporated is employing a multidomestic strategy which emphasizes on differentiating products and services to adapt to local markets. This is seen in the company's effort to provide products which are especially designed to suit the needs to the individual customers in its country. As stated above, Dell doesn't only adapt its products and services but also adjusts its strategies to take into account the culture of the local market. Does the company make use of work teams Dell recognizes that each individual contributes to the attainment of the company's various goals. Putting individuals with different knowledge, skills, and abilities together will yield a team which leverages on the individual potential of its members. Thus, Dell emphasizes on employing teams in order to carry out its essential business activities. Dell is currently utilizing a just-in-time philosophy in its value chain which replaces the traditional assembly line with workgroups and teams. Within Dell's manufacturing facilities are groups of individuals with different specialties. Together, they ensure the efficiency of the assembly process. As teams pool together the expertise of each individual, detection of errors is possible even at the start of the production process. Another area where Dell employs the team approach is in its diversity management: "More than 1,500 U.S. executives, managers and employees participate on cross-functional teams to establish business unit and corporate priorities, exchange best practices and promote business unit/corporate accountability for managing workforce and marketplace diversity in pursuit of Dell's business objectives" (Dell Incorporated 2006). Dell knows that in order to understand its diverse workforce, it also needs to employ a diverse team composed of individuals with different expertise, skills, knowledge, and personalities. Based on the strategies that this company employs within the organization, will the company be successful in its international ventures What changes would you recommend the organization make to help it be more successful in international markets The current success of Dell Incorporated in the information technology market signifies the effectiveness of its strategies. I strongly support that strategy of Dell, both on how it runs its internal operation and how it competes in the international market. Dell capitalizes on its adherence to a highly decentralized organizational structure. The company enjoys the relative freedom given by the headquarters. This gives each unit the flexibility to institute changes without the long wait for the headquarters' approval. Dell's strategy also mirrors its commitment in maximizing customer satisfaction worldwide. This can be seen in the company's thrust in bringing customized products wherever it operates. Thus, Dell is continuously adapting its products to customers. This is excellent because the secret to any company's success is customer satisfaction. However, I would recommend that Dell looks at its business process outsourcing activity. It should be noted that the performance of the company is threatened by the deteriorating customer service quality which is due to the employment of unskilled call center agents from India. Employing non-native English speakers adversely affected computer sales as customers are not provided with excellent after-sales customer service. Dell, therefore, should not sacrifice service quality with cost efficiency. References Dell, Incorporated. 2006. Retrieved 04 November 2006, from http.www.dell.com Kraemer, Kenneth & Jason Dedrick. 2002. Dell Computer: Organization of a Global Production Network. Center for Research on Information Technology and Organizations. Retrieved 04 November 2006, from http://www.crito.uci.edu/GIT/publications/pdf/dell.pdf Mahoney, Jerry. 1999. Dell Computer to open factory in Brazil today, KRTBN Knight-Rider Business News: Austin American-Statesman-Texas, 3 November Read More