Global Perspectives on Innovation and Creativity - Essay Example

Centralised Organization Introduction This paper will study the impacts of integrating the EMC company with its newly acquired firm VMware to form a centralised form of management. A centralised form of management is a coherent unit where interdependent parts work as one (Carpenter, 2011). Therefore this coherence logic is the motivation behind this study. The supporting factor behind of coherent units is that the knowledge sourcing strategies are systematically related to organizational structures (Corporation, 2005b). EMC is a diversified information management firm. It majorly deals with the innovation if information system. The products created by EMC are sold to customers that use a variety of computing platforms and key applications (Drucker & Macimello, 2009). The market target for this company is the global 2000, mid ten market and service providers. VMware is a technology firm that has enabled multiple operating systems. Some of the systems include, the MICROSOFT WINDOWS, LINUX and NETWARE (EL-Reedy, 2011). It also provided virtual infrastructure software for industry standard Intel based servers as above. The software’s performed a variety of services which included evaluation, deployment and implementation of disaster recovery (EL-reedy, 2011). The adoption of the VMware software’s in the EMC Company would allow enterprise customers to improve their server utilization rates and dynamically allocate work load across multiple services. This is because the VMware software has more potential therefore the integration with the EMC will lead to greater innovations (Haslem, 2010). The main question that the essay is portraying whether the EMC Corporation should integrate with the VMW. The paper basically examines the importance of adopting the centralised system of management, the advantages and disadvantages that come with it (Jones & Spender, 2011). How resources can be allocated in a centralised organization. The central tenet of organization theory holds that the structures systems and process of a firm should be independent and must be mutually supportive and coherent (Jones & Spender, 2011). It therefore emphasizes on the need of the EMC Corporation to merge its operations with VMware. Furthermore it is proposed that the organization that is pursuing innovation, which in this case is the EMC, development of software’s should acquire a mode of supporting organizational structure (Kevacio & Leizar, 2012). In this case, the centralized system will be settled upon. This paper further confirms the fact that most research oriented companies have adopted the centralised system of organization (Lazaric & Becker, 2009). The reason why EMC Corporation should integrate with its newly acquired firm is that it will be more beneficial to the system being centralised. The ability to develop new ideas and innovations is the first priority of any organization, therefore when the EMC integrates with VMC firm; the impact on diversification will enable the research and development department to lay more concentration on the development of new ideas (Mackena, 2012). This will therefore enable the company to be able to be up to date with the changing trend in the market in terms of technology and competition. This paper therefore lays out a frame work to the managers who have the intention of adopting the centralised organization (Saunders, 2007). Advantages of adapting the centralised system The centralised form of organization comes with its advantages to the organization, these advantages include. Centralised firms generate innovations that are significantly different along several dimensions from those generated by firms that are decentralised (Schemerton & Wright, 2011). In particular, firms with centralised research and development organizations generate innovations that have a higher level of impact, upon a broader range of technological areas compared to the decentralised departments off research and design. The companies that have a centralised form of organization also benefits the large economies of scale, this is because the companies buy company requirement at great quantities that enable them to be given discounts (Schemerton & Wright, 2011). Therefore buying materials at a cheaper price by the centralised department will favour research and development investment in solving broader, non-specific research challenges and will feature weaker financial incentives for research and design personnel. Decentralised research also involves the selection of research problems that are more likely to lead into the discovery of fundamental or general knowledge (Sokolov B. v., 2010). A decentralised system also facilitates non local innovations more effectively. Therefore technologists and managers in a centralised research system will have more freedom to explore broader research projects that have great technological impacts because they have been protected from the immediate market pressures which are normally brought about by the customer demands. Centralized institutions also offers the ability to effectively pursue nonspecific research, that is research that is research whose fruits are applicable beyond the confines of a specific business (Sokolov V. b., 2010). Disadvantages of adapting the centralised organization One of the effects of adopting the centralized organization is that a company cannot be able to respond all the needs of the manufacturing departments. What’s more is that the company is tied up with work for industrial departments that it cannot undertake work along very radical lines (Winer & Dhai, 2011). Centralization does not bring out efficiency advantages as a result of complicated information processing and increased scope of managerial opportunism. The managers and employees are not informed about the characteristics of the product that is being innovated (corporation, 2005a). Decision making in a company that is exercising a centralised form of organization is cumbersome in both terms of reporting relationship of the research and development workers. Flow of information is hard to facilitate (Sokolov V. b., 2010). This is because of the complicated order of the structure. Furthermore it is very hard to control cooperation this is because there are no clear lines of responsibility (Haslem, 2010). Consequently it is very hard for an organization to reach its best due to the overloading of the workload. Setting One of the main technology concerns for this company in the increasing rate of data generation. Many companies need for storage raises at 50% a year (Carpenter, 2011). As the rate of generation of data increased, there raised a need for proper storage. Therefore EMC emerged out to have competitive advantages over the other companies in terms of quality, services offered, performance, functionality and availability (Drucker & Macimello, 2009). Therefore the need to integrate its operations with VMware was to work closely with it so that it could produce solutions of high value that the customer requires; the solutions include the software and networking applications (EL-Reedy, 2011). EMC also had to adopt partnerships with other companies so as to produce tailored solutions to the customers. The main aim of EMC was to ensure that the deals that were struck would widen both the sales and distribution channels (EL-Reedy, 2011). Therefore its integration with VMware meant that the company would have great innovations. The integration of the two companies meant that the VMware could generate a total of 200million revenue (Haslem, 2010). The intention of EMC was to operate VMware as a software subsidiary of EMC under its own management. Furthermore EMC intention was also to invest in their research and development (Jones & Spender, 2011). What is more is that EMC and VMware combined their server utilization storage with storage virtualization. The integration of EMC and VMware also meant that the EMC company would be able to offer virtual information infrastructure to its customers where customers would dynamically configure their computer storage environments with little downtime (Jones & Spender, 2011). Furthermore, VMware’s offerings were more superior to their Microsoft counterparts. Thus the acquiring of VMware firm had a major benefit to the EMC Company, this is because the VMware’s products were highly regarded in the market, and therefore this would increase their stagnant stock prices (Kevacio & Leizar, 2012). Although the integration posed a major challenge to EMC because they already had enough workers under them and the integration called for the adoption of more workers. Research and development is always managed in business units, closer to where it will be applied arguably because often unit managers are more likely to favour investments that are closely tied to the existing products (Lazaric & Becker, 2009). There is a theory that explores why firms access external knowledge. The internal knowledge helps firms to identify, evaluate and assimilate external knowledge (Mackena, 2012). In this case EMC was able to identify the VMware firm, evaluated its performance and decided that it was the best company to be merged with as it would result to an economic advantage. Furthermore it is stated that a firm will perform well if the organizational structure, internal research and knowledge acquisition are aligned to support each other (Mackena, 2012). Therefore what is more evident in this study is that regardless of the type of structure of an organization has adopted, organizational structure and knowledge outsourcing should be coherent. Analysis EMC Corporation should integrate with VMware firm. This is because when the two companies are merged together, the benefits accrued by EMC will be far much compared to the disadvantages. Both companies associate with technology (Saunders, 2007) .EMC is concerned with software information storage while VMware is concerned with the innovation of virtualized software. It is clearly stated that when a research firm is centralizes its activities, then the research and development department will be able to achieve great innovations that have a larger and broader impact (Schemerton & Wright, 2011). On the subsequent technological evaluation Due to centralization a firm can be able to conduct distant search, a research and development department will be able to generate innovations that draw on a wide range of technologies (Sokolov B. v., 2010). This is evident due to the fact that the VM ware software’s are mostly preferred in the market by customers and therefore results to the EMC achieving profits. The centralization mode of organization is more favorable than the decentralized one; this is because a centralized organization will lead to reduced cost in terms of labor. It will also accrue huge economies of scale. Furthermore, wastages will be reduced (Schemerton & Wright, 2011). As much as it is argued that a decentralized system of organization is more efficient due to the efficiency and the advantages that come from improved information processing and reduced cases of managerial opportunism, it is very clear that decentralization will not accrue the economies of scale (Sokolov B. v., 2010). Furthermore decentralized systems cannot share common space and staff support time simultaneously. Centralized system result to higher transaction costs, this is because a centralized form of organization offers the ability to effectively pursue nonspecific research (Sokolov V. b., 2010). These results are applicable beyond any confinement. On the contrary decentralized form of organization offers traditional beliefs as the results are often associated with measurement to market demand and customer satisfaction. It is also argued that it’s the link between a firm’s diversification strategy and its organizational structure that always affects its performance (Winer & Dhai, 2011). More over a centralized system will have centralized research facilities that are more effective compared to the decentralized. The theory by the tenet of organization theory holds that the structures system and process of a firm should be independent and must be mutually supportive and coherent (corporation, 2005a). This has been evidently proved with a centralized form of organization has an effective and smooth mode of operation. Therefore the EMC should integrate with the VMware in order to attain the smooth running of the organization. It will also result to the organization achieving high profit growth, 11% of centralized forms are in the top textile of share patents acquired compared to 57% of decentralized firms (Carpenter, 2011). Centralized firms make substantially fewer acquisitions than hybrid or decentralized forms (Drucker & Macimello, 2009). Centralized forms absorb 64% of their targets, compared to 42% percent for hybrids and only 21% from decentralized firms. Centralized firms acquired substantially smaller portfolios (Drucker & Macimello, 2009). Centralized firms publish more dollar of sales revenue than decentralized firms and they have substantially higher research and development intensity. Research results suggest that firms with high internal research investment acquire less external knowledge, not just because of their internal research and development focus, but also because such firms also have a centralized structure which itself is also correlated with fewer acquisition (EL-reedy, 2011) . Recommendation EMC should integrate with VMware in order to benefit from the advantages that come with having a centralized organization. Adapting decentralized system will not be of so much benefit to the company as there won’t be great innovations adapting the centralized system will mean the company using the available staff and workers . This means that the company will save on the amount of money that would be used to acquire workers and working premises (Kevacio & Leizar, 2012). Furthermore, adopting the centralized form of organization will mean that the company will benefit huge economies of scale which means that the company will save up on money which can be used to invest to other programmes that can turn to be beneficial to the company (Haslem, 2010). Having the centralized system means that the two companies can support each other to come up with greater innovations. Conclusion The company should adopt the centralized system and merge with the VMware firm. It will be easier for the company and thus it will achieve many benefits as compared to the decentralized system. The integration with the VMware will mean that the EMC Company will benefit in the market, this is because the software’s invented by the firm are most desired by the customers (Kevacio & Leizar, 2012). Hence the integration will mean that its market shares will rise. Furthermore the VMware software has more potential therefore the integration with the EMC will lead to great innovations. The paper also highlights the fact that most research companies have now adopted the centralized system as they are more beneficial (Lazaric & Becker, 2009). Centralized research and design firms also appear to conduct technological search outside their organizational boundaries more widely than the decentralized system research and design firms (Mackena, 2012). It is further illustrated that firms that are hybrid, those that use both centralized and decentralized organization do not generate great innovations as centralized. 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