C. Case: Continental Can Company of Canada, Ltd.

3. Are CCC's organizational structure and design choices appropriate?

Organization should design its structure to fit its environment. The way CCC designs its
hierarchy of authority and creates reporting relationships to link organizational roles and
subunits is very effective. The CCC Plant Manager and the Assistant Plant Manager
establishes the distribution authority between levels and the way the organization’s
central support team groups organizational tasks into roles and roles into subunits i.e.
functions and divisions clearly define roles which are differentiated according to their
main task responsibilities.

4. What problems are occurring in the St. Laurent plant?

The production control and the plant cost reduction are the major issues at St. Laurent
plant. The manufacturing plant was organized as a profit centre. Plant income was
determined by actual sales, not a transfer price. Incomes get adversely affected when
sales failed to come up to the forecast on which budget was based and when sales prices
were reduced to meet competition. Plant manager knows that the salary bonuses for
employees depends on the over optimism of an organization’s performance so they have
to strive hard to do better in every field. In this company there is very little opportunity to
play footsy with the figures so they can’t put anything in the budget that is unknown or
guessed at.

Another problem is people in this organization are paying too much attention to the rules.
Whenever sales personnel need somebody to satisfy an unusual customer request or need
real quick function, he can’t get it because no one is willing to bend break the rules.
People in this organization hesitate to take responsibility or risk. They are always looking
to the boss for direction and supervision. As a result, decision making is slow and
difficult to handle missing out lot of opportunities to create value among customer.

Managers are facing challenges to find a way of using rules and norms to standardize
behavior, and to allow for mutual adjustment to give managers opportunity to discover
new and better ways to achieve goals.

5. What changes should be made to the way the St. Laurent plant is operating to
solve its problems?

The authority that makes important decisions should delegate to the managers at all levels
in the hierarchy. They should promote flexibility and responsiveness. Top managers must
be able to coordinate activities to keep the organization focused on its goals.

Ideal balance entails will enable middle and lower managers who are at the scene of the
action to make important decisions. Top managers should always focus more on long-
term strategy making.

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Managers should carefully guide the process of differentiation so that it develops the core
competences that give the organization a competitive advantage and they should carefully
integrate the organization by choosing appropriate integrating mechanisms that allow
subunits to cooperate and that build up the organization’s core competences.

Partial mechanistic structures would be implemented that are designed to induce people
to behave in predictable, accountable ways. The Organic structures should also be present
that promote flexibility, so people initiate change and can adapt quickly to changing
conditions. Although the organic structures are more effective when the environment is
unstable and changing and the Mechanistic structures are more effective in stable
environments. The design of an organization’s structure should be tailored to the sources
of uncertainty facing an organization.