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Consulting International, Inc.

Proposal of New Structural Design for ECHO, INC.

By: Jodie France


Luis Barrientos
Michael Ziegler
Patrick Kilday

Echo, Inc is at a crucial stage in its organizational life cycle and will have to make structural
alterations in order to accomplish new strategic goals. Therefore, Consulting International, Inc
will address the specific structure that Echo, Inc should utilize and explain how it will enable the
corporation to effectively handle potential situations. We will explicitly answer all questions that
Echo Inc, has inquired and begin with defining the new proposed structure:

Organizational Structure and Processes


Based upon the information provided it seems evident that Echo Inc, is currently more
mechanistic than organic and has been operating productively. However, the current structure of
the organization could decrease effectiveness and efficiency under a build-to-order strategy.
Issues will arise in the production process and boundaries between departments will create
delays. Therefore, as the diagram above suggests, core processes should be ran in teams in order
to increase collaboration and problem-solving. The main core processes that Echo Inc, will create
teams for include, Information Technology Support, Parts Supply/Logistics, and Vehicle
Assembly. All information regarding custom orders made online will be relayed from IT support
to Parts Supply/Logistics, and Vehicle Assembly. The latter two teams will cooperate to make
sure parts arrive on time, are assembled correctly, and that vehicles are promptly sent. At the

same, Consulting International acknowledges the fact that Echo Inc, is more acclimated to a
functional structure and some departments are retained. The departments that are retained are
categorized as non-core processes such as human resources, financing, marketing, and the
international division. These divisions will still be able to easily provide and receive data through
advanced IT systems.
IT Systems
The online build-to-order is dependent upon IT systems, all information regarding sales, parts,
order changes..etc will be distributed through a corporate intranet. Thus, it is essential that Echo
Inc, purchase servers to retain data and hire highly qualified IT specialists to maintain both the
servers and network. It is also suggested that Echo Inc, invest in the development of software so
data is easily accessible to each department and teams. This may seem costly; however, many car
manufacturers are going the extra mile in order to establish their own systems as seen by
organizations such as Tesla Motors. Owner, Elon Musk and his unique company, Tesla Motors,
found themselves in a predicament. The traditional enterprise resource planning (ERP) that 9 out
of 10 of the major car manufacturers were using, wasnt working for Tesla. So Musk decided that
his company needed to build his own ERP, enabling every employee to be on the same system,
Tesla also made its very own world-class e-commerce center to target customers online since
Tesla sells directly to the costumer instead of through dealerships (Williams). Echo, Inc. needs to
develop their own IT system or borrow off a company like Tesla, so that they will be able to be
as flexible as possible in the modern online world.
People and Functional Issues
To increase logistical efficiency, ECHO, Inc should continue to expand its dealership network in
the United States. Cars ordered online can then be shipped to dealerships that are near to the
customer. This will also allow the dealerships to greatly reduce inventory. The proposed
dealership network that ECHO, Inc will utilize may cause major changes to the structure and the
culture of the company.
From a functional point, 60 company owned and operated dealerships are not only expensive to
set up but also very expensive to run. Regardless, Echo, Inc has advantageous knowledge
pertaining to running dealerships and making a profit. Due to that fact, they should retain their
current dealerships and continue to expand. Expansion in the U.S. will still be orchestrated by the
marketing and sales department. The main challenge however, is going to be the people issues
that usually arise when many people are hired in a short period of time due to expansion. First of
all there is the challenge of hiring the people who will work at the dealerships. A new hiring team
will have to be created to hire people who will be working at the new dealerships. Where will

this recruiting team be hired from? They will have to be very mobile for the next few years if
they are going to be hiring people all over the country. There will also have to be some transfers
from the other dealerships, but with many new dealerships, are any of them going to be able to
afford losing a manager or a top sales team member?
Each new dealership will have to have some employees that already worked at other ECHO Inc.
dealerships. This is imperative not only because the new dealerships will need people who
already know the company and the systems but because these transfers will also have the
responsibility to spread the company culture. Who will be the transfers? Depending on the size
of the dealership, one person from each department and the dealership manager should be
transferred at a minimum. Where will these people be taken from? From the best performing
dealerships seems like the best idea; that is if we want the new dealerships to be successful.
However we would say that instead of the best performing dealerships these people should be
taken from the dealerships where a positive culture is the strongest.
Cultural Issues
From a cultural point of view there is even a larger issue to face. Corporate culture is an essential
aspect in the success of every business. Having the right corporate culture can give companies an
edge and put them atop their industry. However, having the wrong corporate culture or no culture
at all can be very damaging to a company. Culture is something that is built upon and worked
towards and when many new people come into a company at once it is more difficult for them to
merge into the companys culture. The big challenge here is for the HR recruiting team. They are
going to have the responsibility to hire individuals that will fit in with ECHO Inc.s culture. This
is no easy task as there are many difficulties in choosing the people you want during the hiring
process.
For these changes to be implemented successfully there are a few main concepts that have to be
taken into consideration. First of all, the people who are going to be doing the recruiting have to
be highly trained and must have a plethora of experience in corporate hiring. They will have to
be experts in the company culture and be very mobile for they will be traveling from city to city
doing the hiring. This is the most essential part in successfully carrying out this expansion.
Another important part is choosing the employees that are going to be transferred into the new
dealerships. These employees should have high communication skills, should be charismatic and
again, have a high sense of the company culture. They will be the ones spreading the culture
around to all of the new employees (which will be an overwhelming majority.) The more
transfers there are the easier it will be to spread the culture around, but transfers are more
expensive than the new hires.

Going International
Entering new markets abroad can be a great advantage for ECHO Inc. if it is done effectively. First of
all, they can benefit from economies of scale. This means that Echo can reduce their unit cost of
production due to the additional demand that they are going to obtain from Mexico and Canada. This
will increase the production margins and generate higher profits. Mexico and Canada are particularly
advantageous countries to begin exporting cars to, which is due to the North American Free Trade
Agreement (NAFTA.) This trade agreement allows for free trade between the countries of United
States, Mexico and Canada. So ECHO Inc. will be able to sell their cars in these countries without
paying the government any exporting fees.
If properly positioned in Mexico, ECHO Inc. can benefit from their low production cost in the near
future when they have to open a new production factory. Mexico would be a very advantageous place
to open a new production facility because of the NAFTA agreement. They will be able to
manufacture the cars there at a cheaper price than in the U.S. and then import the vehicles without
paying any tariffs. Having already established a presence there, ECHO Inc. should also look at
producing in Mexico.
In order for the new set up in these new countries to be a success we must look at how to structure
ECHO, Inc. We have proposed a mixed structure for this company, but there are certain steps that
need to be taken into account when a company is planning on going international. The first step is to
create an export department and if this works well it will outgrow into an international division. The
export department will initially work like any of the other significant departments, but once it
outgrows into an international division it will have its own hierarchy. This is a system suitable for
ECHO, Inc. because they have currently been successful domestically and we dont want to change
the system too much in order to address international aspects.
The following step in this international expansion would be to open new dealerships in these two
countries. Mexico seems more challenging than Canada because of the language barrier; even though
this barrier also exists in Quebec, Canada. The first step in this aspect would be to find a partner or a
consulting group in each country that can help set up these dealerships. The different laws and
regulations together with the way business is handled abroad would not allow for ECHO Inc. to
embark on this journey without the proper advice.
Echo Inc, is at a crucial point in its history and will have to utilize a hybrid organizational structure in
order to accomplish new strategic goals. These goals, from shifting to a build-to-order strategy and
seeking to expand internationally, can easily be obtained with the newly proposed structure. The
company also has to take care to develop a positive culture amongst all the fast expansion that they
are going through. In essence, these structural changes will allow Echo to continue to expand
accordingly and prosper into the future.

References
Office of the United States Trade Representative, Executive Office of the President. (n.d.). North
american free trade agreement (nafta). Retrieved from website:
http://www.ustr.gov/trade-agreements/free-trade-agreements/north-american-free-tradeagreement-nafta
Williams, A. (2013, October 31). Being A CIO At Tesla Motors, A Startup That Builds Cars And
Its Own IT. Retrieved November 26, 2014, from http://techcrunch.com/2013/10/31/beinga-cio-at-tesla-motors-a-startup-that-builds-cars-and-its-own-it/