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Hyten Corporation On June 5, 1998, a meeting was held at Hyten Corporation, between Bill Knapp, director of sales, and John Rich, director of...

hyten corporation case study analysis

Hyten Corporation On June 5, 1998, a meeting was held at Hyten Corporation, between Bill Knapp, director of sales, and John Rich, director of engineering. The purpose of the meeting was to discuss the development of a new product for a special customer application. The requirements included a very difficult, tight-time schedule. The key to the success of the project would depend on timely completion of individual tasks by various departments. Bill Knapp : "The Business Development Department was established to provide coordination between departments, but they have not really helped. They just stick their nose in when things are going good and mess everything up. They have been out to see several customers, giving them information and delivery dates that we can't possibly meet." John Rich : "I have several engineers who have MBA degrees and are pushing hard for better positions within engineering or management. They keep talking that formal project management is what we should have at Hyten. The informal approach we use just doesn't work all the time. But I'm not sure that just any type of project management will work in our division." Knapp : "Well, I wonder who Business Development will tap to coordinate this project? It would be better to get the manager from inside the organization instead of hiring someone from outside." COMPANY BACKGROUND Hyten Company was founded in 1982 as a manufacturer of automotive components. During the Gulf War, the company began manufacturing electronic components for the military. After the war, Hyten continued to prosper. Hyten became one of the major component suppliers for the Space Program, but did not allow itself to become specialized. When the Space Program declined, Hyten developed other product lines, including energy management, building products, and machine tools, to complement their automotive components and electronics fields. Hyten has been a leader in the development of new products and processes. Annual sales are in excess of $600 million. The Automotive Components Division is one of Hyten's rapidly expanding business areas. THE AUTOMOTIVE COMPONENTS DIVISION The management of both the Automotive Components Division and the Corporation itself is young and involved. Hyten has enjoyed a period of continuous growth over the past fifteen years as a result of careful planning and having the right people in the right positions at the right time. Thls is emphasized by the fact that within five years of joining Hyten, every major manager and division head has been promoted to more responsibility within the corporation. The management staff of the Automotive Components Division has an average age of forty and no one is over fifty. Most of the middle managers have MBA degrees and a few have Ph.D.s.
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Currently, the Automotive Components Division has three manufacturing plants at various locations throughout the country. Central offices and most of the non-production functions are located at the main plant. There has been some effort by past presidents to give each separate plant some minimal level of purchasing, quality, manufacturing engineering and personnel functions. INFORMAL PROJECT MANAGEMENT AT HYTEN CORPORATION The Automotive Components Division of Hyten Corporation has an informal system of project management. It revolves around each department handling their own functional area of a given product development or project. Projects have been frequent enough that a sequence of operations has been developed to take a new product from concept to market. Each department knows its responsibilities and what it must contribute to a project. A manager within the Business Development Department assumes informal project coordination responsibility and calls periodic meetings of the department heads involved. These meetings keep everyone advised of work status, changes to the project, and any problem areas. Budgeting of the project is based on the cost analysis developed after the initial design, while funding is allocated to each functional department based on the degree of its involvement. Funding for the initial design phase is controlled through business development. The customer has very little control over the funding, manpower, or work to be done. The customer, however, dictates when the new product design must be available for integration into the vehicle design, and when the product must be available in production quantities. THE BUSINESS DEVELOPMENT DEPARTMENT The Business Development Department, separate from Marketing and Sales, functions as a steering group for deciding which new products or customer requests are to be pursued and which are to be dropped. Factors which they consider in making these decisions are: (1) the company's long- and short-term business plans, (2) current sales forecasts, (3) economic and industry indicators, (4) profit potential, (5) internal capabilities (both volume and technology), and (6) what the customer is willing to pay versus estimated cost. The duties of Business Development also include the coordination of a project or new product from initial design through market availability. In this capacity, they have no formal authority over either functional managers or functional employees. They act strictly on an informal basis to keep the project moving, give status reports, and report on potential problems. They are also responsible for the selection of the plant that will be used to manufacture the product. The functions of Business Development were formerly handled as a joint staff function where all the directors would periodically meet to formulate short-range plans and solve problems associated with new products. The department was formally organized three years ago by the then-38-year-old president as recognition of the need for project management within the Automotive Components Division. Manpower for the Business Development Department was taken from both outside the company and from within the division. This was done to honor the Corporation's commitment to hire people from the outside only after it was determined that there were no qualified people
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