Case Study #2: MicroAge In April 2000, MicroAge Technology Services transformed itself to an eBusiness infrastructure services company that operates as a virtual organization, with an agile and mobile sales force able to reach broader geographic markets. "The rapidly changing climate of the technology industry, primarily due to the growth of the Internet and emphasis on reducing operating and technology costs through eBusiness, has made it clear that we must make significant changes to our business to meet the demands of the new digital marketplace," said MicroAge Technology Services President, Jeff Swanson. "As a virtual organization, our sales teams will no longer be tied to physical brick-and-mortar facilities. They will be able to cover broad geographic areas to meet the needs of clients wherever they do business. At the same time, we will continue migrating clients to MicroAgeDirect for product procurement so MicroAge Technology Services sales associates can focus their full attention on relationship management of their clients in fulfilling their infrastructure service needs." Swanson continued, "As a client-centric organization the need for physical locations is minimized so that we can work more directly with clients to help them profit from technology in the internet economy." The company's strategic initiatives, aimed at transforming MicroAge Technology Services into a flexible and agile organization fully capable of providing the eBusiness infrastructure services its clients require, included: a) Expansion of market coverage through the establishment of a field structure composed of thirteen broad geographic market areas, eliminating in three phases the costly network of thirty-five branch offices. b) Centralization of operations and, processes to lower costs and increase efficiency as MicroAge Technology Services moved to a virtual, field organization. Branch inside sales functions will transition to centralized sales support and client site-based sales teams as appropriate. c) Completion of centralized service dispatch for all branches. MicroAge launched plans to centralize service dispatch in order to implement consistent quality standards and enhance overall client satisfaction. d) Migration of all clients to MicroAgeDirect for product procurement. Sales support for major clients will continue to be provided by existing client-site teams or by a centralized team operating from the company's Tempe offices. MicroAge Inc., President Christopher Koziol noted that the restructuring of the procurement function allows the MicroAge Technology Services sales force to focus their full attention on serving the needs of clients and meet the demands of the new connected economy. "This strategy allows our associates to focus their full attention on managing client relationships and releases them from the burden of managing product transactions, which are more efficiently handled by automated procurement systems such as MicroAge Direct. We will also be able to reduce the costs of delivering services and products, significantly streamline operations and ensure consistent, high-quality service delivery to all clients. The most significant benefits of this new structure will be improved sales productivity and growth increased profitability, and client satisfaction," he said. Questions: 1. Organizational Design stands on three pillars Organizational Structure, Rewards, and Measurement. Given the virtual nature of operations at MicroAge, discuss what kind of rewards and measurements can be put in place to ensure managers will continue to have ample control over the sales teams in spite of these teams operating virtually and remotely. 2. Fit is an important criterion to ensure the right kind of candidate joins the sales team at MicroAge. As the HR executive at MicroAge, how will you ensure fit when making recruiting decisions? 3. Consider Christopher Koziols strategy of going fully virtual as an organization. What are the challenges the organizational structure will have to address in order to support this strategy? How feasible is it?