Organizational Behavior - Culture Lens

Dynacorp Case

IUJ, Fall 2005
Pham Thi Thuy Ha

Problems inside Dynacorp:

When Dynacorp has changed its structure, there are problems of linkage and alignment in the light of Strategic Design Lens. According to the new structure, Research and Advanced Development Group and Business Units (BUs) are in the back and Customer Operations are in the front to communicate with markets and customers. Being in the back, the Research and Advanced Development Group and BUs have almost no relation with customers. As a result, the fragmentation of technical expertise would be deepened, the integration between market needs and technology development would be very poor and the technical support services are slow. Therefore, enhancing the integration and cooperation between the front and the back will become a big challenge. On the other hand, the new structure does not totally solve the alignment problem of improving performance measurement system because some branch managers and product managers of BUs are still spending most of their time worrying about the new performance measurement system that is based on performance against revenue and margin goals. In short, the new structure still has weaknesses in linkage between the back and the front and in alignment.

Problems in the view of Political Lens:

In light of Political Lens, the new structure is facing the problems of interest conflicts between BUs and the weak power of executives. As M. Pauley said, different product team leaders are trying to sell different types of products depending on their particular product lines. Moreover, BUs work on their different preferences and compete with each other to develop products in their interest because each of them focuses on particular product category. It means that there is still no recognition that interests are very important for the BUs and their totally different interests and priority are not yet understood and analyzed. Moreover, while arranging the new structure, most of the leaders who came from the old engineering department became the heads of the BUs. As a result, they may have not yet had full power to control their BUs that consist of people from the old production, engineering and marketing departments. Therefore, it is necessary that Dynacorp maps the interests of different BUs, gets buy-in, builds network among groups and increases power of the heads of BUs.

Structure change:

Dynacorp has changed its culture to motivate employees by altering its structure from the functional to front/back structure in order to bring them closer through account teams and by putting engineering and manufacturing functions together, but Dynarcop is still facing a big problem of creating a new organizational culture that matches with its new structure. Its people still work in the old manner and hold old concepts, beliefs, habits, norms, knowledge etc while the new structure requires new knowledge, skills, concepts and so forth. Even though the structure has changed for 2 years, its employees are still in the dark to find out themselves ways to adapt to the new structure and fulfill their new functions. Therefore, it needs to provide training to its employees in order for them to get accustomed to the new working culture and to get new necessary knowledge and skills to carry out their new responsibilities. At the same time, it needs to modify the job guidelines and put employees to suitable positions. As M. Walker noticed, it also needs to replace at leas 25 percent of its current staff and recruit new employees that fit the requirements of the new system. These actions are quite hard to carry out but urgently necessary in order to change Dynacorp’s culture to match with its new structure.