Muhammad Umer Yasin

Case Application 1Ask Chuck

The Charles Schwab Corporation (Charles Schwab) is a San Francisco-based financial services company. Like many companies in that industry, Charles Schwab struggled during the economic recession. Founded in 1971 by its namesake as a discount brokerage, the company has now “grown up” into a full-service traditional brokerage firm, with more than 300 offices in some 45 states and in London and Hong Kong. It still offers discount brokerage services, but also financial research, advice, and planning; retirement plans; investment management; and proprietary financial products including mutual funds, mortgages, CDs, and other banking products through its Charles Schwab Bank unit. However, its primary business is still making stock trades for investors who make their own financial decisions. The company has a reputation for being conservative, which helped it avoid the financial meltdown suffered by other investment firms. Founder Charles R. Schwab has a black bowling ball perched on his desk. “It’s a memento of the long-forgotten bubble of 1961, when shares of bowling-pin companies, shoemakers, chalk manufacturers, and lane operators were thought to be can’t-miss plays on the limitless potential of suburbia— and turned out to be duds.” He keeps the ball as a reminder not to “buy into hype or take excessive risks.” Like many companies, Charles Schwab is fanatical about customer service.

By empowering front-line employees to respond fast to customer issues and concerns, Cheryl Pasquale, a manager at one of Schwab’s branches, is on the front line of Schwab’s efforts to prosper in a “resource-challenged economy.” Every workday morning, she pulls up a customer feedback report for her branch generated by a brief survey the investment firm e-mails out daily. The report allows her to review how well her six financial consultants handled the previous day’s transactions. She’s able to see comments of customers who gave both high and low marks and whether a particular transaction garnered praise or complaint. On one particular day, she notices that several customers commented on how difficult it was to use the branch’s in-house information kiosks. “She decides she’ll ask her team for insights about this in their weekly meeting.” One thing that she pays particular attention to is a “manager alert—a special notice triggered by a client who has given Schwab a poor rating for a delay in posting a transaction to his account.” And she’s not alone. Every day, Pasquale and the managers at all the company’s branches receive this type of customer feedback. she’ll ask her team for insights about this in their weekly m eating.” One thing that she pays particular attention to is a “manager alert—a special notice triggered by a client who has given Schwab a poor rating for a delay in posting a transaction to his account.” And she’s not alone. Every day, Pasquale and the managers at all the company’s branches receive this type of customer feedback.

Discussion Questions:1. Describe and evaluate what

Charles Schwab is doing.

2. How might the company’s culture of not buying into hype and not taking

excessive risksaffect its organizational structural

design?

3. What structural implications—good and bad—might Schwab’s intense

focus on customerfeedback have?

4. Do you think this arrangement would work for other types of

organizations? Why orwhy not?

Case application 2:

A new kind of structure

Admit it. Sometimes the projects you’re working on (school, work, or both) can get pretty boring and monotonous. Wouldn’t it be great to have a magic button you could push to get someone else to do that boring, time-consuming stuff? At Pfizer, that “magic button” is a reality for a large number of employees.44 As a global pharmaceutical company, Pfizer is continually looking for ways to help employees be more efficient and effective. The company’s senior director of organizational effectiveness found that the “Harvard MBA staff we hired to develop strategies and innovate were instead Googling and making PowerPoint.” Indeed, internal studies conducted to find out just how much time its valuable talent was spending on menial tasks was startling. The average Pfizer employee was spending 20 percent to 40 percent of his or her time on support work (creating documents, typing notes, doing research, manipulating data, scheduling meetings) and only 60 percent to 80 percent on knowledge work (strategy, innovation, networking, collaborating, critical thinking). And the problem wasn’t just at lower levels. Even the highest-level employees were affected. Take, for instance, David Cain, an executive director for global engineering. He enjoys his job—assessing environmental real estate risks, managing facilities, and controlling a multimillion-dollar budget

But he didn’t so much enjoy having to go through spreadsheets and put together PowerPoint. Now, however, with Pfizer’s “magic button, "those tasks are passed off to individuals outside the organization. Just what is this “magic button?” Originally called the Office of the Future (OOF), the renamed Pfizer Works allows employees to shift tedious and time-consuming tasks with the click of a single button on their computer desktop. They describe what they need on an online form, which is then sent to one of two Indian service outsourcing firms. When a request is received, a team member in India calls the Pfizer employee to clarify what’s needed and by when. The team member then e-mails back a cost specification for the requested work. If the Pfizer employee decides to proceed, the costs involved are charged to the employee’s department. About this unique arrangement, Cain said that he relishes working with what he prefers to call his “personal consulting organization.” The number 66,500 illustrates just how beneficial Pfizer Works has been for the company. That’s the number of work hours estimated to have been saved by employees who’ve used Pfizer Works. What about Joe Cain’s experiences? When he gave the Indian team a complex project researching strategic actions that worked when consolidating company facilities, the team put the report together in a month, something that would have taken him six months to do alone. He says, “Pfizer pays me not to work tactically, but to work strategically.”

Discussion Questions:1. Describe and evaluate what Pfizer

is doing with its Pfizer Works.

2. What structural

implications—good and bad—

does this approach have?

(Think in terms of the six

organizational design elements.)

3. Do you think this arrangement would work for other types of organizations? Why or whynot? What types of organizations might it also

work for?

4. What role do you think organizational structure plays in an

organization’s efficiency and effectiveness? Explain.