DYNACORP I rev - STRATEGIC DESIGN AT DYNACORP The Dyna...

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1 STRATEGIC DESIGN AT DYNACORP The Dyna Corporation, known in the industry as Dynacorp, is a major global information systems and communications company. Originating in an office equipment company that moved into high technology applications in the 1970s and 1980s, Dynacorp had, by the 1990s, established a position as an industry leader, known for being first to the market with innovative and high-quality products that were significant advances on anything its competitors were offering. The customers were typically sophisticated users who were willing to do some of their own applications work and to figure out how to integrate Dynacorp’s new products with the rest of their operations. During this period, the company grew at a very fast rate, expanding sales to Europe, Asia, and Latin America. The first decade of the twentieth century was a much more difficult period for the company. It continued to grow, but at a slower rate, and experienced periods of significantly reduced earnings. Critics both inside and outside the company attributed Dynacorp’s difficulties to a loss of leadership in getting new products to market, costs that were too high, and changes in the marketplace that Dynacorp was slow to recognize. Competitors were closing the technology gap, and were often faster getting products to market. In a growing number of product areas, Dynacorp had been surprised by competitors that, although they had started working on a new product much later than Dynacorp, were faster at getting the product to the customer at a very attractive price. In addition, a growing number of ICT (Information and Communications Technology) consulting firms were capturing the relationship with the large customer by offering “value-added services and solutions”. The consulting firms acted as intermediaries, supervising the purchase of ICT hardware and software, providing integration services, and capturing much of the high-margin business. A growing number of executives in Dynacorp were coming to believe that the problems could not be addressed effectively with Dynacorp’s current functional organizational structure. The CEO decided to appoint a small internal task force to make preliminary recommendations on organization design to the top management team. The CEO personally launched the task force with a company-wide communication listing the challenges Dynacorp was facing: high costs, being too slow to get new products to the market, and a need to increase the value created for customers. The CEO emphasized that the current task force’s mandate was driven by Dynacorp’s commitment to maintaining its leadership position in its industry, and asked all Dynacorp employees to cooperate fully and frankly with the task force’s inquiries. The CEO had made it clear, however, that he did not want a simple listing of alternatives from the task force; he wanted it, at the very least, to provide a ranking of the alternative choices.
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  • Fall '10
  • EleanorWestney
  • Management, task force, Dynacorp

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