Detroit Electric Essay

1. What organizational structure do you believe is being used to produce Detroit Electric vehicles? Detroit Electric concentrates theirs efforts on research and development of the motor, vehicle design, marketing and distribution. The company does not produce cars; the actual manufacturing of cars is outsourced. From the case I conclude that technology design is the core business of Detroit Electric. Technology changes rapidly and therefore Detroit Electric has to be flexible in conditions of change and uncertainty. Technical excellence and efficient use of resources is the key to compete and to avoid wastage as the cost of R&D is high. Based upon the above observation, I believe that the organizational structure used is the matrix model. 2. How has differing organizational structures influenced the pace of development between these two companies? Ford and Detroit Electric are both car companies. The major difference is that Ford manufactures cars whereas Detroit Electric does not. Ford’s organizational structure will most likely resemble other manufacturers’ structure, i. e. functional departmentalization. A major disadvantage of this structure is that because specialists are working with and encouraging each other in their areas of expertise and interest, organizational goals may be sacrificed in favor of departmental goals; hence, the inability to coordinate efforts amongst competing department to achieve the goal of producing electric vehicles. Detroit Electric’s matrix structure on the other hand gives the organization the flexibility to respond to challenges faster in conditions of change and uncertainty; hence their relative pace (fast)in developing electric cars. 3. What issues may arise from this cooperative arrangement of international companies? The first issue is control. How does Detroit Electric ensure that their exact specifications are followed by their licensees? Regular audits will have to be conducted and these audits are costly. Who will bear responsibility if problems arise (faulty products) due to failure of any of its licensees do not follow procedures? The second issue is differences in objectives. For example, Detroit Electric’s performance and quality standards objectives may differ from their licensees.