Case Analysis of: M-Tronics
A Case Analysis of:
M-TRONICS
Key Issues:
The main issues of this case are best summarised as follows. They are; 1) how can M-Tronics increase operating efficiency and reduce costs in its electronics department? 2) How can M-Tronics reduce conflict problems between R&D and other segments of its Electronics department? 3) How should the philosophy towards the level of autonomy CEO Martel gives his directors be shaped in the future to address management concerns? 4) What is the best way to provide new financial resources to ensure continued success for the Machine division? 5) Lastly, how should the Entrepreneurial Subsidiaries program be formatted to provide for continued growth and success for M-Tronics?
Internal Analysis:
The analysis of M-Tronics will consist of a separate analysis of the old McKenna Machine Co., as well as one of Datronics. This will provide for a greater understanding of the ambidextrous organizational structure of M-Tronics.
Beginning with McKenna Machine Co., it was founded in the early 1900’s when there was consolidation of small local machine shops. There were four local machine shops that merged to form an industrial machine parts manufacturing corporation. McKenna Machine Co. was a family run business with a management team that consisted of mostly older executives. Most of these top executives held positions with McKenna for over 20 years. At the time of acquisition, they had revenue of $600 million and net profit of $12 million. They also held a market share of 40-60%. This positioned them as the market leader. However, the budget for the machine division has become static and new financial requirements needed to increase production quality have not been received since its last investment in the 1970s.
The organizational structure was that of a centralized chain of command. The leadership style was that of a paternalistic family oriented business. They had a strategy that included economies of scale, having high quality
M-TRONICS
Key Issues:
The main issues of this case are best summarised as follows. They are; 1) how can M-Tronics increase operating efficiency and reduce costs in its electronics department? 2) How can M-Tronics reduce conflict problems between R&D and other segments of its Electronics department? 3) How should the philosophy towards the level of autonomy CEO Martel gives his directors be shaped in the future to address management concerns? 4) What is the best way to provide new financial resources to ensure continued success for the Machine division? 5) Lastly, how should the Entrepreneurial Subsidiaries program be formatted to provide for continued growth and success for M-Tronics?
Internal Analysis:
The analysis of M-Tronics will consist of a separate analysis of the old McKenna Machine Co., as well as one of Datronics. This will provide for a greater understanding of the ambidextrous organizational structure of M-Tronics.
Beginning with McKenna Machine Co., it was founded in the early 1900’s when there was consolidation of small local machine shops. There were four local machine shops that merged to form an industrial machine parts manufacturing corporation. McKenna Machine Co. was a family run business with a management team that consisted of mostly older executives. Most of these top executives held positions with McKenna for over 20 years. At the time of acquisition, they had revenue of $600 million and net profit of $12 million. They also held a market share of 40-60%. This positioned them as the market leader. However, the budget for the machine division has become static and new financial requirements needed to increase production quality have not been received since its last investment in the 1970s.
The organizational structure was that of a centralized chain of command. The leadership style was that of a paternalistic family oriented business. They had a strategy that included economies of scale, having high quality