Learning Goals The multinational organization is an increasingly common and important part of the economy. This case takes you into the world of a cutting-edge music software business seeking success across three very different national and organizational cultures. Its managers need to make important decisions about how to structure work processes so that employees can be satisfied and productive doing very different tasks. The Scenario Newskool Grooves is a transnational company that develops music software used to compose music, play recordings in clubs, and produce albums. Founder and CEO Gerd Finger is, understandably, the companys biggest fan. I started this company from nothing, from just me, my ideas, and my computer. I love musiclove playing music, love writing programs for making music, love listening to musicand the money is nice, too. Finger says he never wanted to work for someone else, to give away his ideas and let someone else profit from them. He wanted to keep control over them, and their image. Newskool Grooves is always ahead of the pack. In this business, if you cant keep up, youre out. And we are the company everyone else must keep up with. Everyone knows when they get something from us, theyre getting only the best and the newest. The company headquarters are in Berlin, the nerve centre for the organization, where new products are developed and the organizational strategy is established. Newskool outsources a great deal of its coding work to programmers in Bangalore, India. Its marketing efforts are increasingly based in its Toronto offices. This division of labour is at least partially based on technical expertise and cost issues. The German team excels at design and production tasks. Because most of Newskools customers are English speakers, the Toronto office has been the best group to write ads and market products. The Bangalore offices are filled with outstanding programmers who dont require the very high rates of compensation you would find in German or Canadian offices. The combination of high-tech software, rapid reorganization, and outsourcing makes Newskool the very definition of a virtual organization. Finger also makes the final decision on all hiring for the company and places a heavy emphasis on independent work styles. Why would I want to put my company in the hands of people I cant count on? he asks with a laugh. They have to believe in what were doing here, really understand our direction and be able to go with it. Im not the babysitter, Im not the school master handing out homework. School time is over. This is the real world. The Work Culture Employees want to work at Newskool Grooves because its cutting edge. Newskools core market is dance musicians and DJspeople who appreciate that while relatively expensive, Newskool is a very high-quality and innovative brand. Newskool sees itself as a trendsetter, and this strategy has tended to pay off. While competitors develop similar products and therefore need to continually lower their prices to compete with one another, Newskool has kept revenues high by creating completely new products that dont face this type of price competition. Unfortunately, computer piracy has eroded Newskools ability to make money with just software-based music tools, and it has had to move into the production of hardware, such as drum machines and amplifiers that incorporate its computer technology. Making this massive market change might be challenging for some companies, but for an organization that reinvents itself every two to three years like Newskool does, the bigger fight is a constant war against stagnation and rigidity. The organization has a very decentralized structure. With only 115 employees, the original management philosophy of allowing all employees to participate in decision making and innovation is still the lifeblood of the companys culture. One developer notes, At Newskool, they want you to be part of the process. If you are a person who wants to do what youre told at work, youre in trouble. Most times, they cant tell you what they want you to do nextthey dont even know what comes next! Thats why they hire employees who are creative, people who can try to make the next thing happen. Its challenging, but a lot of us think its very much an exciting environment. The Virtual Environment Because so much of the work can be performed on computers, Finger decided early to allow employees to work outside the office. The senior management in Berlin and Toronto are both quite happy with this arrangement. Because some marketing work does require face-to-face contact, the Toronto office has weekly in-person meetings. Employees who like Newskool are happiest when they can work through the night and sleep most of the day, firing up their computers to get work done at the drop of a hat. Project discussions often happen via social networking on the companys intranet. The Bangalore offices have been less eager to work with the virtual model. Managers say their computer programmers find working with so little structure rather uncomfortable. They are more used to the idea of a strong leadership structure and well-defined work processes. When I started, says one manager, Gerd said getting in touch with him would be no problem, getting in touch with Toronto would be no problem. Were small, were family, he said. Well, it is a problem. When I call Toronto, they say to wait until their meeting day. I cant always wait until they decide to get together. I call Gerdhe says, Figure it out. Then when I do, he says it isnt right and we have to start again. If he just told me in the first place, we would have done it. Some recent events have also shaken up the companys usual way of doing business. Developers in the Berlin office had a major communications breakdown about their hardware DJ controller, which required many hours of discussion to resolve. It seems that people who seldom met face to face had all made progressbut had moved in opposite directions. To test and design the companys hardware products, employees apparently need to do more than send each other code; sometimes they need to collaborate face to face. Some spirited disagreements have been voiced within the organization about how to move forward in this new environment. At the same time, the Toronto office was experiencing challenges in its ability to execute its marketing plans. According to Marketing Director Sandra Pelham, Now that we were producing hardwarereal instrumentswe finally thought, All right, this is something we can work with! We had a whole slate of musicians and DJs and producers to contact for endorsements, but Gerd said, No way. He didnt want customers who only cared that a celebrity liked us. He scrapped the whole campaign. He says were all about creativity and doing our own thinguntil we dont want to do things his way. Although the organization is not without problems, there is little question Newskool has been a standout success in the computer music software industry. While many companies are failing, Newskool is using its market power to push forward the next generation of electronic music-making tools. As Finger puts it, Once the rest of the industry has gotten together and figured out how theyre all going to cope with change, theyll look around and see that were already three miles ahead of them down the road to the future. Summary of the Case The transnational company Newskool Grooves develops music software and the found and CEO is Gerd Finger Headquarters is in Berlin and offices in Bangalore, India, and Toronto, Canada with 115 employees total The core market is dance musicians and DJs When it comes to hiring the final decision comes down to Gerd Finger He has a heavy emphasis on independent work styles What draws people to the company is it being creative, cutting edge, and exciting work environment Newskool sees itself as a trendsetter The organization reinvents itself every two to three years Since most of the work is done on computers, employees work outside the office Senior management in the Berlin and Toronto offices are both happy working outside the office The Toronto office has weekly in person meetings due to part of marketing requires face to face contact The Bangalore office is not too excited about working outside the office, due to them liking to have a structured work environment There is communication issues between all of the offices Having issues executing marketing plans Root Problem Analysis 1. The virtual environment is working for headquarters in Berlin who deal with organizational strategy and product development and for marketing in Toronto because their work is suitable to that environment, but Bangalore prefers an environment with leadership and work process structure when it comes to doing coding. 1.1. Some employees are happy, but other employees are uncomfortable in their work environments. This is due to functional departmentalization in the company, because each department performs different tasks they have different needs. 1.2. Bangalore prefers an environment with more leadership, the current style of leadership does exhibit any of the path goal theory leadership styles. This leads to employees not viewing the leader, particularly Gerds behaviour as acceptable as it is not providing them with satisfaction now nor in the future. 1.3. The virtual environment has also posed communication issues for Bangalore as as the speed of written communications is far slower than oral communications 2. Gerd Finger the CEO has a hard time with not always being in control and things not being done his way but wants his employees to be independent and creative which they do, but then it doesnt always meet his standards which is causing the Toronto marketing team challenges. 2.1. Gerd is trying to give his employees empowerment by allowing them to make decisions without his direction but because he is not giving them all the tools they need to be fully empowered specifically information required to make decisions (what his standards are) this not necessarily working well. 2.2. Dysfunctional conflict arises when Gerd does not agree with the ideas and plans of the marketing team due to his lack of communication with them. 2.3. The lack of communication from Gerd of his standards for the marketing team's work is a problem with the downward flow of communication. Gerd needs to communicate openly and honestly with these employees about what he would like to see. 3. The lack of face-to-face meetings is becoming a problem for Berlin because for them to test and develop products it requires at least some face-to-face meetings to stay coordinated with the programmers and marketers. 3.1. This is a flaw in the lateral communication within the company as the goal of lateral communication between employees is to save time and ease issues with coordination, which is not happening here. 3.2. Berlin finds oral communication much more effective than other methods, this is due to the necessary speed of communication and feedback. 3.3. Berlin prefers to make group decisions when working on projects as it ensures everyone is moving in the same direction, and everyone's views and opinions are heard. This is difficult in a virtual environment without face to face meetings.

question 1 - please find correct recommendations for this case- Recommendations 1. 2. 3.

Recommendations Root Problem Recommendations Pros/Cons Explanation of Connection to OB Concepts Root Problem #1 Recommendations Root Problem Recommendations Pros/Cons Explanation of Connection to OB Concepts Root Problem #2