Introduction The roofing contracting industry has suffered from the effects of a down economy brought on by the financial

scandals of the early 2000s. The industry then suffered yet another severe blow at the hands of the subprime mortgage crisis in late 2007. Commercial and residential building has slowed dramatically. Subcontractors in the roofing, plumbing and electrical fields have suffered simultaneous losses. Where homebuilders were once growing by leaps and bounds, we now find those same companies out of business. PetersenDean Roofing and Solar, Inc. (PD) is a solar and roofing contractor based out of Vacaville, California. The company has subsidiaries and branch offices across the five states of Nevada, California, Arizona, Texas and Florida. Along its 25 year existence, PD has acquired several contracting companies, retaining original company names. Each of these companies provides its own specialized niche, adding strength to the services PD currently offers. One particular company, OCR Solar and Roofing, was purchased in early 2009, adding solar to the companys growing list of expertise. For PetersenDean, the biggest challenge has been surviving in this unpredictable economy. PD has had significant layoffs in the last two years, causing rapid changes to its organizational structure. This downsizing has put widespread pressure on its limited employee resources. The bankruptcy of one of its biggest solar suppliers, Solyndra, is an obstacle for PetersenDean. It relied on new solar technology in Solyndras panels to offer innovation to keep ahead of the competition in the industry. PetersenDeans organizational structure lacks depth and its processes are high in formalization and bureaucratic control. The companys leader, Van Beek, uses intuitive decision

making to guide most of the organizations strategic decisions. His style of management does not promote a learning organization and has created a hostile organizational culture. Nor is this type of style conducive to the use of horizontal grouping to solve issues the company is currently facing. PetersenDeans organizational structure is in need of retooling and revitalization. Major Issues PetersenDean has struggled to hold onto market share in the downturn of the economy. As a result of this resource dependence, the company has been forced to make changes in its organizational structure to remain a top provider of roofing and solar services. The company has recently purchased OCR Solar and Roofing (OCR), Inc to attain its expertise in solar roofing. As a result of this merger, 85% of OCRs workforce was reduced. PD relocated its corporate headquarters to OCRs headquarters, also reducing PDs corporate staff by 45%. This new collaborative network brings new challenges to its organizational structure. PDs organizational structure is rigidly centralized and designed for efficiency along a vertical information system. The existing OCR culture was shocked by the dominant and abrasive PetersenDean culture when the two merged. OCR was a family run organization, who managed its employees with a caring and nurturing approach. PetersenDeans employees were used to management practices that created an arduous, harsh and efficiency based culture. The two diverse cultures must find a way to work together if the organization is going to be successful. At the helm of PetersenDean is its Chief Operating Officer, Van Beek. Van Beeks use of coercive power is his everyday management style. Employees have filed complaints with the Human Resource department regarding his abuse of coercive power. As COO, Van Beek makes almost every management decision for his executive and management teams. It is this use of

absolute power over his immediate staff that has caused high turnover among the executive ranks. This power has also stifled the organizations growth as a learning organization. Another major problem that has presented itself for PetersenDean is the innovation to provide even more services to compensate for the loss of revenue from its residential and commercial roofing divisions. Its main solar panel supplier, Solyndra, has filed for bankruptcy. PD was counting on the new technology from its solar panels to provide a new and improved solar option to its customers. According to Hargreaves, Solyndra's panels were, as the name implies, a cylindrical design, like a florescent light tube. They were more efficient, as they caught light from not only above, but also reflecting off the roof (Hargreaves, 2011). PD has yet to contract a new vendor for these more complex panels. PetersenDean Roofing and Solar, Inc.s strengths lie in its long standing reputation in the residential roofing industry. As the market has caused many roofing contractors to shut its doors, PD has been able to secure contracts with large homebuilders based on its reputation and performance in the industry. Since its founding in 1984, the company has grown to become the largest privately held integrated roofing and solar contractor in the country, employing 4,500 people and operating coast-to-coast in over 15 offices in five states (King, 2009). The companys weakness is that it must find new and innovative products to stimulate its revenues in this down economy. Residential roofing has been its main source of income, so it must look to other avenues and opportunities to remain competitive. Opportunities for PetersenDean lie in the uncultivated solar commercial roofing. The company has recently formed strategic alliances to take part in its first new Smart Roof for a U.S. military base in Puerto Rico. This could lead to opportunities for expansion in international

markets. Threats to the company lie immediately in the recession we are currently experiencing in the United States. Petersen Dean has had to make some tough decisions on cutting costs and manpower to continue to remain profitable. Problem Analysis PetersenDean has faced the worst economy since the Great Depression of the 1920s. Through this downturn, new home construction has fallen to record lows. Most builders say they dont expect a housing recovery until they see fewer homes in foreclosure and looser credit requirements (Kravitz, 2011). PD has revenue bases of $250 million annually. In order to preserve its position as the largest privately held solar and roofing contractor in the nation, the company has to remain flexible to new opportunities. The economy will be a major factor in PDs success. PetersenDean has had some problems holding onto middle management employees. The high turnover of these employees has stifled organizational cohesion. Employees in this middle management capacity rarely stay at PD longer than two years. The corporate culture is one of the causes of this high turnover because of. Key executive managers allow an insensitive and callous organization culture to exist. Centralized decision making has been a source of difficulty among middle management. In this complex and unstable environment, internal structure is vertical in many ways. Most decisions are made by the COO, Van Beek throughout the executive and middle management levels. Designed for efficiency, the company employs a vertical system of communication and reporting, centralized decision making and a strict hierarchy with many rules (Daft, 2008). This

type of vertical organization could be more appropriately designed by a different blend of organizational structural approach. Interventions PetersenDean has yet to establish a clear vision or strategy to its organization. In the media, the company has issued a mission, but has yet to identify vision or strategy to provide clear goals for success. Jim Peterson, CEO and President, states PDs mission is building it right the first time, every time (PetersenDean Solar & Roofing, Inc., 2011). No other mission statement exists. PD must collaborate to establish a clear vision, strategy and goals. Without strategy or goals, the employees will not know what the collaborative effort will attempt to accomplish. The redefinition of operative goals is recommended, offering a framework to implement the strategy and goals necessary for PetersenDeans organizational future. Typical operative goals include the performance goals, resource goals, market goals, employee goals, development goals, productivity goals and goals for innovation and change (Daft, 2008). Defining these goals will provide PD a clear strategy to obtain resources for solar materials, help to identify market share goals, and address employee training, education and growth. These are areas in which the organization is currently struggling. Failure to address these issues will result in a decline in the organizations life cycle. PetersenDean would highly benefit from a change in organizational structure, as it is in the elaboration stage of organizational development. According to Daft (2008), the elaboration state is identified as a new sense of collaboration and teamwork. At the present moment, PDs 15 branches in 5 states communicate along a functional structure. According to Daft (2008),

this structure causes slow response time to organizational changes, causes decisions to pile up at the top, poor horizontal coordination among departments and a restricted view of organizational goals (Daft, 2008). PD would benefit more from using a divisional or hybrid structure. Using a divisional structure, many of the decision making would be decentralized, it would be able to change quickly in the unstable economy, allow for high coordination across departments, and allows for adaptation to difference in products and regions according to Daft. PetersenDean could also opt for a hybrid blend of structures to incorporate process that currently are successful and integrate others that would allow the organization greater flexibility to adapt to the economys ever changing pace. The above mentioned recommendations would be useless unless there is a method for a successful implementation. Organizational change should be executed in five steps to assure a successful transformation according to Daft (2008). First the organization needs ideas to improve innovation, processes or concepts. Second, there must be a need for change. In this case, a need for restructuring the organizations structure is required for improvement in many areas within the organization. Third, there must be an adoption of the idea or improvement by employees. The last step in the organizational change is resources. The organization needs to provide a means to implement the change. If any of these steps are not successfully completed, the change will not be considered absolute. Conclusions PetersenDean is an industry giant. It is the largest privately owned solar and roofing contractor in the nation. It has weathered an incredible downturn in the economy. Many similar companies in the roofing industry have been forced to shut its doors under these unfavorable

economic conditions. Turning to innovation as its future, PD has once again remained on the forefront of solar roofing industry. To remain in this position, the organization is in vast need of organizational structure revitalization. Petersen Dean has branches that span five states. This poses a need for an adaptability culture, as well structural changes to its organizational structure. The current structure in place has allowed for highly formalized procedures, bureaucracy and overbearing centralization. Reengineering the organizational structure away from a vertical and into a horizontal structure will eliminate departmental boundaries and promote more collaboration among the branches. This new structure promotes creativity, trust and coordination among the self-directed teams. The biggest change implemented by a horizontal structure for PD is the redirection of authority to its self managed team, rather than its now central hierarchy. For an organization that is in its elaboration stage in its life cycle, changes must be carefully considered. In changing its organizational structure it will improve its internal processes and reduce centralization. It will allow for a more creative environment to allow for a more competitive strategy in this down economy. It will also provide for a more positive, learning and nurturing organizational culture. Above all, it will improve the companys overall health, adding more internal support to its already excellent external performance in the industry. PetersenDean is a proven survivor. The question that I wanted to answer over the course of this case assignment was how can this organization improve its processes to match its legendary contracting reputation?. The company has grown by leaps and bounds over the last 8 years. The need for structural reengineering is necessary to properly merge these new companies

and smooth out the process of collaboration among its branches. With this new growth comes revitalization.

Bibliography Daft, R. L. (2008). Organizational Theory and Design. SOUTH-WESTERN CENGAGE Learning. Hargreaves, S. (2011, September 30). Solyndra bankruptcy may not be a total loss for taxpayers. Retrieved October 19, 2011, from CNN Money: http://money.cnn.com/2011/09/30/technology/solyndra/index.htm King, C. (2009, November 9). 2009 Roofing Contractor of the Year Residential. Retrieved October 18, 2011, from Roofing Contractor: http://www.roofingcontractor.com/articles/2009-roofing-contractor-of-the-yearresidential Kravitz, D. (2011, May 18). Downturn continuing for home builders. Retrieved October 19, 2011, from Boston.com: http://articles.boston.com/2011-0518/business/29556801_1_midsize-builders-kb-home-small-builders PetersenDean Solar & Roofing, Inc. (2011). The PetersenDean difference. Retrieved October 19, 2011, from PetersenDean Solar & Roofing, Inc.: http://www.petersendean.com/about/index.html