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Technology Operations

The document discusses innovation management through case studies of Car and Ikea, focusing on new product development (NPD) and organizational structures. It outlines three types of organizational structures: Functional, Project, and Matrix, highlighting their strengths and weaknesses in handling NPD. Additionally, it covers the concept of target costing and its importance in managing product costs throughout their lifecycle, using the Tata Nano as an example of market shifts and challenges in the automotive sector.

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Tamar Salant
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6 views2 pages

Technology Operations

The document discusses innovation management through case studies of Car and Ikea, focusing on new product development (NPD) and organizational structures. It outlines three types of organizational structures: Functional, Project, and Matrix, highlighting their strengths and weaknesses in handling NPD. Additionally, it covers the concept of target costing and its importance in managing product costs throughout their lifecycle, using the Tata Nano as an example of market shifts and challenges in the automotive sector.

Uploaded by

Tamar Salant
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Innovation Management #2 2 Cases: Car & Ikea

Topics Today:
-New Product Development [NPD] & Organizational Structures
-Target Cost

Organizational Structures:
Functional Organization: Hierarchy/Leadership, different departments; Bureaucratic;
Traditional Team structure; Project members answer to their function heads, not project team;
When project complete, project is disbanded
-Strengths: Brings functional expertise to problem solving; Function
managers control resources for tasks they perform; Less disruptive to
organization at large
-Weaknesses: Judge based on functional performance not project results;
Lack of coherence between functional tasks on complex problems; Cookie
cutter approach
Project Organization: Everyone organized under a project manager;
Each project starts new; Integrated & Cross-Functional, Co-Located
(Share workspace/Collaborative) Truly integrated cross-functional
structure; Team members are co-located and only answer to project
manager; Project team has complete control over mission, resources,
results; Performance is completely based on project result
-Strengths:Speed and agility to handle most challenging development
projects; No conflicting forces pulling at team members
-Weaknesses: Less corporate control, little use of existing process creations (information
sharing)- can reinvent the wheel; Unique solutions may be difficult to
integrate into the existing business
Matrix Organization: Manager of Project Managers, HYBRID of the 2,
*Found to be more effective for NPD*
Various Matrix Forms- 3 forms:
-Lightweight Form: Authority of functional manager predominates; project
manager has indirect authority
-Balance (Middleweight) Form: Traditional matrix in which
the project manager sets the overall plan & functional manager
determines how work to be done; Most Pushback in BOTH
directions
-Heavyweight Form: Project manager has broad (most) control
and functional departments act as subcontractors to the project

Organizing for the Disruptive Innovation:


-Companies can’t move disruptive new products through their
org and into market in a timely way
-Disruptive technologies tend to look financially unattractive to established companies
-In-House managers are not incentivized to support disruptive technologies
-Hard for established companies to undertake such experimentation, but start-ups can
-Leads to notion of keeping disruptive technology innovation programs independent

Target Costing: “Reducing the overall cost of a product over the entire life-cycle with the help
of production, engineering, research and design.”
-A target cost: maximum amount of cost that can be incurred on a product and with it the firm
can still earn the required profit margin from that product at a particular selling price.—Wiki,
2015

New Product Cost: 3 Main types–Manufacturing, Volume, Product Life-Cycle Cost (Warranty?
Cost associated with), Supply Chain & Transportation Cost (Safety stock, mode of
transportation, location of customer base from manufacturing– Offshore?), Labor/skill/cost
required to producing

Starting with Price: Tata Nano (Car Case)


Market Shifts- Changes in demand & Keeping up, Deliver volume of cars @ timeframe (couldn’t
keep up)

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