1

TABLE OF CONTENT
No. Content Page
1 Introduction

2
2 Content
Company Background
Theories
Case Analysis


3-4
4-5
5
3 Findings
SWOT Analysis


6-7
4 Recommendations

7-8
5 Conclusion

9-10
6 References and Appendices

11-12










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1.0 INTRODUCTION
Organizational structure is defined as the set of formal tasks assigned to individuals
and departments, formal reporting relationships, including lines of authority, decision
responsibility, number of hierarchical levels, and span of managers control; and the design
of systems to ensure effective coordination of employees across departments, (Daft, 2010).
Organizational structure also means the way in which the interrelated groups of an
organization are constructed and the main concerns are effective communication and
coordination, (http://www.wordiq.com/definition/Organizational_structure).
Furthermore, organizational culture refers to the shared values, principles, traditions,
and ways of doing things that influence the way the organizational members act. The
definition of culture in general implies three features or attributes which are perceptions,
descriptive and the shared aspect of culture, (Daft, 2010).
Schein, one of the famous theorists, define organizational culture as a pattern of shared basic
assumptions that a group learned as it solved its problems that has worked well enough to be
considered valid and is passed on to new members as the correct way to perceive, think, and
feel in regards to those problems, (http://www.organizationalculture101.com/definition-of-
organizational-culture.html).
Organizational structure works within an organizational culture, however it is not
completely separate but both are entwined together. Understanding how the internal structure
and culture operates will allow those within the organization culture to organize and
strengthen the good, cut away the bad, and manufacture an environment that breeds and
encourages success among its members, (http://www.organizationalculture101.com/implic
ations-of-organizational-structure-culture.html).
Organizational structure and culture are important to an organization in order to run
their activities effectively. Organizational culture is essential because it can influence the way
organizational members act also the organizational structure can ensure effective
coordination of employees in the organization.
In this Motorola Inc.: What Went Wrong case study, we will look at the problems
faced by Motorola which is caused by the inefficiency of organizational structure.

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2.0 CONTENT
2.1 COMPANY BACKGROUND
Motorola has been devoted to innovation since 1928 in communications and
electronics. On 25 September 1928, Paul V. Galvin and his brother, Joseph, formed Motorola
Company-the Galvin Manufacturing Corporation located in Chicago, Illinois, USA. In this 80
plus year history, Motorola has achieved many milestones.
They pioneered mobile communications in the 1930s with car radios and public safety
networks and in 1969, they come out with equipment that carried the first words from the
moon. While in 1983, Motorola had led the communications revolution with the first
commercial handheld cellular phone and system and introduced a handheld scanner which set
the standard for the industry. As a global industry leader, excellence in innovation continues
to shape the future for the Motorola brand.
In 1928 Galvin Manufacturing Corporations comes out with first product that is
battery eliminator. The companys first customer was Sears, Roebuck and Co. which sold
battery eliminators to customers. In 1947, Galvin Manufacturing Corporation change to
Motorola, Inc.. In 1947, Motorolas first television, the 1947 Gloden View model was
affordable and popular and there are more than 100,000 units sold in one year. In 1955,
Motorola has introduced a new brand logo, the stylized M insignia or emsignia. The
company leader said that the two aspiring triangle peaks arching into an abstracted M
typified the progressive leadership-minded outlook of the company.
Motorola had gain many award that recognized its achievement around the global.
Some of the award includes The Wall Street Journal Asia 200: Recognizing Asias Leading
Companies, Asia in 2009, International CES Innovations 2010 Design and Engineering
Awards Honoree, Motorola Mover, Consumer Electronics Show, 2010 and Motorola Atrix

4G CES 2011 reward.
The offices of Motorola are located globally such as Mexico, India, China, Germany,
Italy, Japan, Malaysia and etc. Motorola is set up with executive team like President and
Chief Executive Officer, Corporate Vice President in Business Development and Ventures,
Senior Vice President of General Manager, Networks, Senior Vice President of Chief
Marketing Officer, Executive Vice President in Product & Business Operations, Chief
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Financial Officer, Senior Vice President of Chief Information Officer, Corporate Vice
President in Strategy and Staff Operations, Senior Vice President in Sales & Field Operations.
2.2 THEORIES
Product Divisional structure
Divisional structure means that an organizational structure is made up of separate business
units. Divisional managers are responsible for what happens to their products and services.
Each division is a unit by itself and that unit is responsible for the isolated segment of the
market and creates their own infrastructure, (http://eng.biznesowe.edu.pl/1273-
divisional_structure/). Divisional structure can be divided into three areas: product structure,
market structure and geographical structure, (http://www.associatedcontent.com/article/
120970/functional_divisional_and_matrix_organizational.html?cat=3). Product divisional
structure groups employees together based upon specific products produced by the company.
In a product divisional structure, product managers assume responsibility for the production
and distribution of a specific product or product line to all the geographic and customer
markets served by the organization, (Lewis, P. S, Goodman, S. H., Fandt, P.M. & Michlitsch,
J.F).
Functional departmentalization
Functional departmentalization is defined as design that groups similar occupational
specialties together. It means grouping activities by functions performed. It is also defined as
the manner or practice in which related individual tasks and their allocation to work groups is
combined, to form a specialized functional area that is distinct from other functional areas in
an organization,( http://www.businessdictionary.com/definition/departmentalization.html).
Organic organization
Organic organization is a structure that has low specialization, formalization and
centralization. There are few things that can affect the structure which is strategy, size,
technology, or environment. In case environment change rapidly, it is better to use organic
organization. It is a flexible type of organization structure and there will be lesser rules in this
organization. Among the employees and managers or the workers, they will have a more
informal communication. It is based on flatter structures and decentralized decisional
authority where managers give empowerment to employees in making decisions.
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Team structure
Team structure refers to an organizations structure made up of work teams. Team structures
help eliminate difficulties with communication and decision making that result from
functional chimneys problem, (Schermerhorn, J. R., 2009). It breaks down barriers between
departments as people from different parts of an organization get to know one another.
Employees can participate in a project and improve themselves by gaining knowledge when
working together.
2.3 CASE ANALYSIS
In this case study, we see what problems Motorola face. Firstly, Motorola applies the
product divisional structure in its organization. The idea of creating tribes among divisions
was to encourage employees to compete internally for funding and support from headquarters
as well as eliminate weak ideas. However, this competing internally has brought to internal
conflicts which resulted in the inability to develop products. This can be seen in the case
study when a telecommunications minister flung Motorola business card at them from a
dozen different Motorola divisions and was confused about who he had to refer to. This
shows that Motorola Inc. does not have a correct and right organizational structure which
may confuse people.
Customer satisfaction is important for a company to survive in a market but it seems
that Motorola is faces this problem. This can be seen in the case study where it states that
there are serious problems in marketing, timely delivery of products and in the quality of its
wireless networks. Due to economic downturn in Asia, Motorola faces a collapse of
consumer demand for its production. Furthermore, Motorola Inc. has also failed to anticipate
the technology development in the industry.
Besides that, there is lack of trust among employees in the company. In this case, the
CEO, Christopher Galvin took over the company in 1997 but there were some employees
who wondered if he is up to the job because he needs to replace many senior managers in the
future. There are even critics who suggested that Galvin may be too nice to run a company in
crisis. Another problem is the resistance towards change in the company especially by senior
employees.

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3.0 FINDINGS
SWOT ANALYSIS
3.1 Strengths
Based on the case study, Motorola Inc.s strength was created when new CEO,
Christopher Galvin took over in 1997. He tried to change the structure and culture of the
organization to overcome the crisis in the organization. He regularly holds executive
meetings in which he and others brainstorm about the future. As a result, this can ensure that
all the members of the organization clearly know what the organizational goals are and work
towards achieving that goal. Motorola Inc. has an advantage because two-thirds of the
companys top managers are 57 years old or older which may indicate that they have a lot of
experience in guiding the future managers of the company.
3.2 Weaknesses
The main weaknesses of Motorola Inc in structure and culture it is too reliance on
teams and group sectors as an organizing device. Although Motorola Inc. has the tribal
approach which may weed out weak ideas and identify strongest product, it had caused
internal conflicts among the employees. The internal conflicts among employees have led to
the poor communication and coordination which contributes to the inability of Motorola Inc.
to develop their products. It has also caused problems in marketing, timely delivering of
products and in the quality of its wireless networks which may lead to the decrease in
consumers demand.
Motorola Inc.s culture did not stress on keeping up with customers preferences as
they did not determine if the market desires their products before developing the product. The
poor leadership and inadequate structural design in Motorola Inc. has cause the organization
to miss the changing trends in technology. Its commitment to teams hindered the
organizations ability to change rapidly and respond to its dynamic environment.
The building of trust in an organization is very important as it will build relationships
between colleagues in the workplace which may increase operational effectiveness. However,
there is a lack of trust among the employees in Motorola Inc. and most of them are unwilling
to accept the transformation. From the case study, it is stated that two-thirds of the companys
top managers are currently 57 or older. It might create a gap especially when the top
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managers retire as there might not be qualified employees to take over the top managers
positions. The poor structure of Motorola Inc was lower down its brand awareness. This may
lead to Motorolas cellular products are going toward declining in sales and it is suffering as
well.
3.3 Opportunities
The opportunity of the Motorola Inc is it has a greater chance of establishing an
alliance with other outside partners if they have a better organization structure and culture.
This is because with a good structure, the organization can enhance their brand awareness in
the market. By creating an alliance with their partners, Motorola Inc. will be able to provide
more for their customers and operate more efficiently.
3.4 Threats
Motorola was slow in the market as it adapted late to technology standard.
Furthermore, when Motorolas shares in the market fell, it indicates that Motorolas biggest
threat, their competitors have overtaken them. In 1998, Motorola was overtaken by Nokia as
the worlds biggest seller of mobile phone handsets. Motorolas competitors are more
dominant in the industry as this situation can be worst in the future if Motorola doesnt try to
develop the organisations structure. Promotional activities of competitors are stronger than
Motorola. In addition, as in the past some of the Motorola products declared as faulty which
impact badly on the Motorolas image so the consumers perceptions about Motorola is not
very good which is a serious threat for Motorola. From the case study, another threat is the
economic downturn in Asia which has caused a collapse of consumer demand for its products.

4.0 RECOMMENDATIONS
Creative and innovation products are the strength of the Motorola and they make
Motorola get competitive advantage in this area. Hence, existing of the innovative and
creativity culture is very crucial for this company. We strongly recommend that Motorola Inc.
set up clear and unambiguous goal to encourage innovative and creativity in their product and
services. This will ensure that all the members in the organization are familiar with the goals
and will work towards achieving it. In order to create creative and innovation environment,
Motorola should hire employees who are innovative and creative and train employees by
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using their advantage of experienced top managers. Motorola Inc. also needs to specialize
task to each employee because above employees skill level, employees will perform more
sophisticatedly. Besides that, management also can stimulate the employees creativity
inspiration and productive work by given motivation with paying higher salary and
commission to the employees who successfully creates new creative and innovative products.
Management of Motorola Inc is heavy reliance on teams and group sectors as an
organizing device. Working in teams and group is good way to boost up the company
productivity and efficiency. However, management to revel in practice on team method also
will bring negative effect in the company which is causing internal conflict that became the
main problem in the Motorola Inc. We also recommend that Motorola Inc. redesign the team
function and members. The team member must be committed depending on the complexity of
the task. If the task is more complex, the team member should have around 6 to 7 members.
Beside the head of project, adviser, secretary, and committee of experts, coordination
committee also should be set up to moderate and imply the important of task interdependence
to each team. Moreover, the head of project require decentralization in their team in order to
enable members to elaborate their skills entirely. Motorola should use functional
departmentalization and team structure so that the employees work on the same products and
achieve the same goals. Motorola can also apply organic organizational design where it
involves decentralization which enables members to make decision in a more flexible state.
On the other hands, competitors such as Apple, Nokia and Samsung are threats
towards Motorola Inc. as some competitors are dominant in the market. Therefore, Motorola
should produce the high quality and low fault products. In addition, pricing, services and
promotion plays an important role in the market which would influence the final decision of
the potential consumers. Motorola must frequently advertise their new product such as using
black and white advertising strategy to attract attention of the consumers. Advertising
strategy not only can promote Motorola Inc product, they also can enhance the publicity and
Motorola brand name in the market as well as to dispel customers prejudices about Motorola
product which had declared as faulty before. Therefore, Motorola Inc. should increase their
customer orientation level and enhance their customer relation.


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5.0 CONCLUSION
Organization structure refers to the frame work in which the organization defines how
tasks are divided, resources are deployed, and departments are coordinated, (Daft, 2010). The
organization culture is the shared values, principles, traditions, and ways of doing things
which may influence the others. Organization structure and organization culture and works
together and interrelated with each other. Both of these may bring a lot of advantage to an
organization in order to achieve organizations goal.
We learned that Motorola adopts product divisional structure which encouraged
employees to compete internally which resulted in internal conflicts and has caused inability
to develop products. Motorola faced problems such as marketing problems and timely
delivery of products. We can also see that the decrease in consumer demand for Motorolas
production was due to Asias economic downturn. Furthermore, the employees were resistant
to change.
The SWOT analysis evaluates the internal and external factors of an organization. The
strengths for Motorola Inc. were that the new CEO took the initiative in redesigning the
organization in order to compete in the industry once again. Another one of its strengths is
there are many experienced top managers in the company which is advantage especially in
training future managers.
The weaknesses can be seen as Motorola rely too much on teams that it has created
conflicts among employees. Besides causing the inability to develop products due to poor
communication, Motorolas poor leadership caused the organization to miss the changing
trends in technology. There was a lack of trust towards the new CEO in the organization. We
can also see that majority of the companys top managers above 56. It might create a gap
when current top managers retire as there might not be qualified employees to take over the
top managers positions.
The opportunity that Motorola has is its chance to create partnership with other
organizations if it has a good structure. The threat found is its competitors, such as Nokia,
who overtook Motorola in the market. This happened because Motorola was slow in adapting
technology standard in the market. The economic crisis in Asia was a threat which has caused
a collapse of consumer demand for its products.
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After analyzing the case study, we recommended that Motorola Inc. set up clear and
unambiguous goal to encourage innovative and creativity in their product and services. With
clear goals, employees will be familiar with the goals and will try to achieve it. Motorola
should hire employees who are innovative and creative and train employees to increase the
innovativeness and creativeness within the organization.
We also recommend that Motorola Inc. specialize task to each employee so that
employees can perform better in the organization. Besides that, Motorola Inc.s management
can give motivation to employees for those who successfully create creative and innovative
products. It is recommended that Motorola redesign team function and members depending
on the complexity of tasks. Motorola should use functional departmentalization and team
structure so that the employees work on the same products and achieve common goals.
Motorola can also apply organic organizational design where it involves decentralization
which enables members to make decision in a more flexible state. In competing with its
competitors Motorola should produce high quality and low fault products. Motorola can
enhance its publicity and brand name by frequently advertising their new product to attract
customers attention.
From this assignment, we learned that both organizational structure and culture are
very important in determining an organizations success. Without a structure, there will not
be any chain of command and authority. The structure also defines the responsibility of each
employee from different departments. An organization having a poor structure and culture
will find it hard to achieve the goals of the organization. The organizational structure is also
important because managers use it to coordinate and organize to implement strategies. We
have also learned that by doing SWOT analysis, an organization is able to identify its
strengths and opportunities and overcome its weaknesses and threats to continue to grow in
the market.





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REFERENCES
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APPENDICES