A study of a defense organization -TARDEC

Sarang Bhutada DoMS, IIT Madras

sarang.bhutada@gmail.com

TARDEC is US Army’s Tank-Automotive Research, Development, and Engineering Center, located in Warren, Michigan

Roots back to 1946, when it was formed with the sole mission of building quality tanks and supplying them to the US Army

Army’s hub of R&D activity for ground vehicles and their associated integration and logistics

Underwent a major re-structuring in 1989, when Dr. Kenneth Oscar sculpted a paradigm shift in their internal strategy

Showed characteristics typical of a declining organization like• Shrinking Market Size: Figured on federal Government’s base

closure list• Alternative opportunity seeking: Ventured into civilian space• Employee turnover: Faced consistently declining employee

levels• Centralized in an ever changing environment: Multi-

hierarchical linear structure• Ageing Infrastructure• Outdated management practices

Issues concerning organization effectiveness Quality management not efficient Vehicular technology rapidly changing Delayed decisions and longer response times Lack of clear vision amongst and within the ranks Low input by associates in management decisions

How do you factor this in and restructure (Delayer) an archaic organization?

TARDEC

Customers Suppliers

Government/ Fed Agencies Competitors

Armed Forces

Auto Industry

Academia

International Markets

Demographic, cultural and social forces

Economic Forces

Technological Forces

Political Forces

Specific Environment

General Environment

TARDEC had a structure that was highly complex, formalized and centralized

For its very survival it needed to restructure itself into an organisation that would be less formalized and decentralized

High level of formalization in R&D organizations stifles innovation, and increases red-tapism

A matrix-structure does promise the best-of-both-world effect

Each team would work in a product division and would include management expertise from different VPs

Senior management’s (VPs +) role is now more as a mentor and a guide, than authority

Vertical and top-down

Corporate Level Strategies Business Level Strategies Functional Level Strategies Delve into civilian space Pursue top grade quality awards

Make the organization flatter Tie individual performance with

organization performance Project TARDEC as an innovative

organization to the industry

Detail actions concerning team processes, roles & responsibilities, awards, etc

As per Chandler, new organizational forms are no more than a derivative of strategy

Growth drivers gave rise to the need for an autonomous, multidimensional structure

Highly centralized structure inefficient and impractical in dealing with a complex organization, like TARDEC

For better allocation of resources, accountability of performance and coordination between units team based organization was preferred, which could be monitored

As per Miller and Snow, PROSPECTORS are organisations that

• continually search for new market opportunities. • Their domain is broad and in a constant state of development. • The main tasks are maintaining flexibility in technological and administrative

components. • Technologies are less formalised and more embedded in the minds of the

organisation’s personnel.• Planning is based on incremental adjustments based on feedback from

experiments.

TARDEC followed a typical Prospector Strategy: Tried to exploit a new market opportunity , by extending into civilian space Focused on innovation and applied for various quality awards Demonstrated flexibility in scanning the environment for potential opportunities Decentralized into a number of teams

The number of employees had been decreasing However, with the elimination of a number of levels,

we think TARDEC would be in a position to retrench. This would result in a loss of routine for a lot of

managers, and hence the reduction. Since the size of the organization would be decreasing,

it would aid in reducing formalization and thus help decentralize easily

TARDEC can be classified as an organization using small batch and unit technology

Such organizations have typically low technical complexity

However, flexibility and the ability to respond to a wide range of customer requests make this technology ideally suited to producing new and complex products

Typical characteristics of such an organization, as per Woodward’s Approach includes:

Levels in the hierarchy

Span of Control of CEO

Span of Control of team leader

Structure of organization

Type of structure

Ideal Small Batch and Unit Tech*

3 4 20 Relatively flat, with a narrow span of control

Organic

Before Delayering 8 6 4 Tall Mechanistic

After Delayering 3-4 5 NA Relatively flat, with a narrow span of control

Organic

*Source: J Woodward, Industrial Organization: Theory and Practice. London: Oxford University Press, 1965

Key tenets of TQM incorporatedCease dependence on mass inspection to achieve quality. Quality should be a team responsibility.

Break down barriers between departments.

Put everyone in the company to work to accomplish the transformation

Benchmark the organization against the best in industry. Alternatively, set benchmarks for industry to follow.

End the practice of awarding business on price tag alone. Instead, minimize total cost

We need to check if de-layering has successfully absorbed the environmental changes

When the environment is rapidly changing and on-the-spot decisions need to be made, lower-level employees need to have the authority to make important decisions- i.e. they need to be empowered

The empowered team goes ahead with their decisions, which speeds up the process of decision making

Mechanistic Organizational Structure Organic

Low Environmental Uncertainty High

Mechanistic StructureSimple StructureLow DifferentiationLow IntegrationCentralized decision makingStandardization

Organic StructureComplex StructureHigh DifferentiationHigh IntegrationDecentralized decision makingMutual Adjustment

TARDEC before Delayering

TARDEC after Delayering

Impact of Delayering on Culture On OCTAPACE parameters-

Openness Confrontation Trust Authenticity Proactivity Autonomy Collaboration Experimentation

Effect of Delayering

Analysis across the 3 competing dimensions-

Before Delayering After Delayering

People vs. Organization Organization Centric People Centric

Control vs. Flexibility Control Flexibility

Means vs. Ends Ends Means

Delayering is an effective approach, available to declining organizations

Delayering effects need to be carefully evaluated and the negative ones pre-empted

Dimensions need to be carefully evaluated as discussed above, and validated by existing theories around them