Hermitage Escalator Company is an independent division of a large international manufacturer that sells and provides maintenance of elevators and escalators. Hermitage was started by an entrepreneur living in Hermitage, Tennessee in 1954, just as the demand for the “magic staircase” began to take off. In 1989 Hermitage was acquired by an elevator company that wanted to provide a full line of lift devices. Hermitage was able to maintain substantial autonomy as a separate division and to retain its brand name. Hermitage sells over 2,000 escalators each year. Principal areas of escalator sales include department stores, shopping malls, airports, transit system stations, convention centers, hotels, arenas, stadiums, office buildings, and government buildings. At the extreme, an escalator may carry people up multiple stories or hundreds of feet horizontally along corridors such as in an airport concourse. How Escalators Work In its simplest form, an escalator is like a conveyor belt with a pair of long chains, one on each side, looped around gears at each end. An electric motor turns the drive gear at the top, which pulls and rotates the chain loops, similar to the chain mechanism on a bicycle. A typical escalator uses a 100-horsepower motor to rotate the gears. The motor and chain system are housed inside a metal structure extending between the two floors. The chain loops move a series of steps. As the chains move, the steps stay level. At the top and bottom of the escalator, the steps collapse on each other, creating a flat platform. This makes it easier for riders to get on and off the escalator. Each step in the escalator has two sets of wheels that roll along on two separate tracks. The set of wheels near the top of each step are connected to the rotating chains, and hence are pulled by the drive gear from the top of the escalator. The other set of wheels at the bottom of the step simply glide along its track. The tracks are placed so that each step always remains level. At the top and bottom of the escalator, tracks level off to a horizontal position, flattening the stairway. Each step has a series of grooves so it will fit together with the step behind it and in front of it during the flattening. The electric motor in an escalator also moves the handrail. The handrail is simply a rubber conveyor belt that is looped around a series of wheels. This belt is precisely configured so that it moves at the same speed as the steps to give riders some stability. An escalator is much better than an elevator for moving people a short distance because of the escalator’s high loading rate. Escalator speeds vary from about 90 feet per minute to 180 feet per minute. An escalator moving 145 feet per minute can carry more than 10,000 people an hour, many more people than a standard elevator can move. The Need for Maintenance Although escalators are simple in concept, like all machinery there are many parts involved that may break down at any time. Safety mechanisms include inlet guards, an operating panel, safety switches, and step switches. The top and bottom operating units include a control panel, drive unit, main gear, drive chain, sprocket, and safety switches. The truss between floors includes the main track, trailing track, moving handrail drive unit, sprocket, moving handrail drive chain, and inlet guard. Other elements include the moving handrail, its interior panel, deck board, and skirt guard. The steps include the tread, riser, step demarcation line, driving rollers, and step chain. Escalator maintenance is important for customer satisfaction because nobody likes to climb a broken escalator. Maintenance can also be a serious issue. There are horror stories of people falling into broken escalators that opened up when people were climbing up the stairs. Moreover, escalators have collapsed sending people tumbling to the bottom. Escalators have caught fire, such as in 1987 when an escalator in a London Underground station actually exploded, sending flames into the ticketing office, killing 31 people. The cause was the accumulation of pounds of tiny bits of paper and lint that had collected in the inner workings and undercarriage of the machine. The IoT Approximately 28,000 new escalators and elevators are installed each year in the United States. Hermitage, like all manufacturing companies, was facing an industrial revolution, popularly known as Industry 4.0 or the industrial Internet of Things, as manufacturing converged with the digital economy, specifically with emerging big data col- lection systems and analytics. There is much discussion of how to create profitable business models using big data analytics. The best approach may be to identify bottle- necks and other problems, determine what real-time data is needed to overcome the problem, and then apply appropriate sensors, wireless connections, and analytics to collect, transfer and analyze this data. Hermitage must also decide what action should be taken in response to a problem, such as how to provide data or a data visualization to decision-makers, or even how to create decision algorithms that would automatically decide what action should be taken in response to a problem. Concerns at Hermitage Mardell Anderson, maintenance superintendent at Hermitage, had a number of concerns about digitalizing the new escalators as part of the industrial Internet of Things. According to Anderson, “Fixing an escalator the first time, every time, is crucial to maintain customers and reduce labor costs. I would really like to see our ability to fix a problem before it happens. Prediction and prevention, as opposed to reaction, is where the industry is headed. We are driving toward preventative and predictive maintenance out of necessity. If we can install sensors and Internet of Things components, we could dispatch the right people to fix the right problem at the right time. Or better yet, prevent the problem from occurring at all.” Low-rise escalator equipment can be maintained with competent technical know-how. Competent maintenance workers make about $50 per hour and can earn over $100,000 a year with overtime. An IoT package is cost- effective on new escalators but expensive to retrofit on legacy escalators. “It will take several years to replace legacy escalators,” Anderson said. “In the meantime, we are learning the weak spots in our escalator systems and where sensors would have the best payoff. It would be great if we had information coming from the equipment to tell us which mechanics to send and when to send them but that is several years away on our installed maintenance base. It could be 10 years before we have all of our installed escalators talking and communicating in a meaningful way.” Anderson wanted to be creative in his approach to maintenance during the 10-year interim. “Is it possible to find another way to achieve predictive maintenance? We have a lot of repair and callback history that we could use to do a big data-type effort, even before escalators have sensors and are connected to the IoT. Knowing that a large percentage of our callbacks are related to electric motors and chains, for example, is important. I want us to get bet- ter at using the data we already have as we move toward big data analytics.” “A really good mechanic can troubleshoot an escalator over the phone by just asking questions,” Anderson says. “There are not millions of things that can go wrong. There is a finite number of questions for every escalator that would lead them down the right path. That kind of knowledge needs to be part of our predictive maintenance system.” Anderson continued, “Our challenge is selecting and positioning the sensors and cameras within the units and then selecting the right things to measure in order to arrive at predictive capability. Measuring the right things using well-placed hardware and connecting it to the cloud would not achieve our goal without clear rules. The rules of maintenance are not derived from a rulebook, but from the accumulated knowledge and expertise of hundreds of maintenance and repair mechanics over decades of service. As part of the remote monitoring program, our rules for data collection and remote monitoring will allow the first generation of rules to be written that help dispatch the right person to the right problem.” “Now we are taking this knowledge to the next level to do predictive analytics. We want to capture and transfer knowledge that we have in our most talented technicians down to the next generation that will lead us into our future service model. With seemingly unlimited IoT data on the horizon from sensor technology, we will use this information to rewrite the rules on how we dispatch and who we send on service for maintenance calls.” “Predictive maintenance analytics will not be easy to put into practice. For example, with new data coming in, we can expect to see ‘false positives’ – meaning indicators that something was wrong when nothing was wrong. With matters of safety and satisfaction, how could a technician know if the alarm was a false one? False positives have the potential to increase our costs, not decrease them. Then there is the issue of natural variability in our operating equipment. How can we set parameters on distinguishing what we call “noise” from a problem that requires action? In addition, once it is determined that an action has to be taken, what should that action be? Could a certain maintenance action be bundled together with other maintenance items and then addressed as part of the next regularly scheduled maintenance service?” “When you move to a predictive model, you can easily drive up costs. If you take every single thing that was sensed and automatically send a technician to check it out, you spend money for each visit with no benefit. That would cost a lot. If there is a safety issue or an error that could cause a shutdown, then dispatch the technician right away. But, if we are being smart, some issues detected can be bundled into our next maintenance visit to the location.” “So, my thinking is that when we write our rules for maintenance and maintenance calls, we should start with analyzing the callbacks and repairs in our history, because that is where we can influence costs and outcomes. The existing data could help us tremendously. We for sure know on which type of equipment each callback or repair occurred.” At Hermitage, all new installations will have an IoT sensor package installed. A big question is how the Inter- net of Things can be used to increase revenue and decrease rather than increase costs, all the while providing better customer service. How can Hermitage capture all the promise of IoT to deliver more value to the customer and to itself? Questions 1. How might Hermitage codify and manage the knowledge of experienced maintenance technicians into the new rules to be written for handling maintenance responses under the upcoming deluge of big data from the Internet of Things? Explain. 2. How might big data analytics actually be more costly rather than less costly with respect to maintaining escalators? 3. What specific value might come from analyzing data on past maintenance calls? What specific data do you think would have value? Why?
> Do you believe it is possible for a global company to simultaneously achieve the goals of global efficiency and integration, national responsiveness and flexibility, and the worldwide transfer of knowledge and innovation? Discuss.
> They are the most treasured possessions; they line mantels and living room walls; they are the first items frantically sought by family members following fires or natural disasters. They are family photographs. Considering the popularity and demand for b
> Traditional values in Mexico support high power distance and a low tolerance for uncertainty. What would you predict about a company that opens a division in Mexico and tries to implement global teams characterized by shared power and authority and the l
> Name some of the elements that contribute to greater complexity for international organizations. How do organizations address this complexity? Do you think these elements apply to a company such as Spotify that wants to expand its music streaming service
> When would an organization consider using a matrix structure? How does the global matrix differ from the domestic matrix structure described in Chapter 3?
> What are some of the primary reasons a company decides to expand internationally? Identify a company in the news that has recently built a new overseas facility. Which of the three motivations for global expansion described in the chapter do you think be
> Do you think it makes sense for a transnational organization to have more than one headquarters? What might be some advantages associated with two head- quarters, each responsible for different things? Can you think of any drawbacks?
> Many American companies enter China through joint ventures with local firms, but China is succeeding in the United States primarily with a strategy of buying companies outright. What are some factors that might account for this difference?
> Why do you think the tension between a desire for global uniformity and local responsiveness is greater today than in the past?
> Compare the description of the transnational model in this chapter to the elements of organic versus mechanistic organization designs described in Chapter 1. Do you think the transnational model seems workable for a huge global firm? Discuss.
> Name some companies that you think could succeed today with a globalization strategy and explain why you selected those companies. How does the globalization strategy differ from a multi-domestic strategy?
> How does the desire for legitimacy result in organizations becoming more similar over time?
> The Aquarius Advertising Agency is a medium-sized firm that offered two basic services to its clients: customized plans for the content of an advertising campaign (e.g., slogans and layouts) and complete plans for media (e.g., radio, TV, newspapers, bill
> Do you believe that perceived legitimacy really motivates a large, powerful organization such as Walmart? Is acceptance by other people a motivation for individuals as well? Explain.
> Discuss how the process of variation, selection, and retention might help explain innovations that take place within an organization.
> The population-ecology perspective argues that it is healthy for society to have new organizations emerging and old organizations dying as the environment changes. Do you agree? Why would European countries pass laws to sustain traditional organizations
> Discuss how the adversarial versus partnership orientations work between you and other students in your course. Is there a sense of competition or collaboration for grades? Is it possible to develop true partnerships if your grade depends on the work of
> Many managers today were trained under assumptions of adversarial relationships with other companies. Do you think operating as adversaries is easier or more difficult than operating as partners with other companies? Discuss.
> Assume you are the manager of a small firm that is dependent on a large manufacturing customer that uses the resource-dependence perspective. Put yourself in the position of the small firm, and describe what actions you would take to survive and succeed.
> How do you feel about the prospect of becoming a manager and having to manage a set of relationships with other companies rather than just managing your own company? Discuss.
> How do mimetic forces differ from normative forces? Give an example of each.
> The concept of business ecosystems implies that organizations are more interdependent than ever before. From personal experience, do you agree? Explain.
> Assume you have been asked to calculate the ratio of staff employees to production employees in two organizations—one in a simple, stable environment and one in a complex, shifting environment. How would you expect these ratios to differ? Why?
> The first Holtzclaw Supermarkets store was started in 1977 by Sam Holtzclaw and his brother Bob. Both were veterans who wanted to run their own business, so they used their savings to start the small grocery store in Charlotte, North Carolina. The store
> Why do organizations become involved in inter-organizational relationships? Do these relationships affect an organization’s dependency? Explain.
> Compare an organic organization to a mechanistic organization. How does the environment influence organic and mechanistic designs?
> Do you think planning becomes more important or less important in a world where everything is changing fast and crises are a regular part of organizational life? Why?
> Describe differentiation and integration. In what type of environmental uncertainty do you think differentiation and integration would be greatest? Least?
> Discuss the importance of the international sector for an organization today compared to domestic sectors. What are some ways in which the international sector affects organizations in your city or community?
> Name some factors causing environmental complex- ity for a local organization of your choice, such as a restaurant or sporting goods store. How might this environmental complexity lead to organizational complexity? Explain.
> Which typically has the greatest impact on organizational uncertainty—environmental complexity or environmental dynamism? Why?
> Is changing the organization’s domain a feasible strategy for coping with a changing environment? Explain, using either Amazon or Walmart as an example.
> How would the task environment of a new Internet- based company compare to that of a large government agency? Discuss.
> Why do companies using a holacracy team structure have cultures that emphasize openness, employee empowerment, and responsibility? What do you think it would be like to work in a company with such a structure?
> Locals referred to it—affectionately or sarcastically—as the “Adding Museum.” Housed in the massive Romanesque-style former mansion of Horace and Margaret Addlington, the 100-year-old Addlington Gallery of Art had, by 2016, reached a tipping point of ins
> The manager of a consumer products firm said, “We use the brand manager position to train future executives.” Why do you think the brand manager position is considered a good training ground? Discuss.
> Why do you think the pressure of scarce resources across product lines causes managers to consider a matrix structure?
> As a manager, how would you create an organization with a high degree of relational coordination?
> When Burton Lee took over as plant manager for the Burlington division of a large manufacturing company, he saw the opportunity to transform the lowest performing unit as a pathway to his promotion into top management. Burton was aware of his reputation
> The Daily Tribune is the only daily newspaper serving a six-county region of eastern Tennessee. Even though its staff is small and it serves a region of mostly small towns and rural areas, the Tribune has won numerous awards for news coverage and photojo
> Hu-go. Hu-go. As Alissa Mason drove up the mountain through the rain, she turned up the volume on the radio to clear her mind. However, even the steady rhythm of the truck’s windshield wipers steered her mind back to the problem—Hu-go, Hu-go. Ten years e
> Harmon Davidson stared dejectedly at the departing figure of his management survey team leader. Their meeting had not gone well. Davidson had relayed to Al Pitcher complaints about his handling of the survey. Pitcher had responded with adamant denial and
> Jim Malesckowski remembered the call of two weeks ago as if he had just put down the telephone receiver: “I just read your analysis and I want you to get down to Mexico right away,” Jack Ripon, his boss and chief executive officer, had blurted in his ear
> Fabulous Footwear produces a line of women’s shoes that sell in the lower-price market for $27.99 to $29.99 per pair. Profits averaged 30 cents to 50 cents per pair 10 years ago, but according to the president and the controller, labor
> NASCAR fans expect their drivers to be smart, crafty, and calculating and, if need be, playing just this side of the rule book—in the garage and on the track. Loyal fans “know” their drivers and can easily picture themselves drinking a beer or spending a
> Larisa Harrison grimaced as she tossed her company’s latest quarterly earnings onto the desk. When sales at Virginia- based Millier Machine Parts & Services surged past the $10 million mark some time back, Larisa was certain the company was well position
> Curtis Simpson sat staring out the window of his office. What would he say to Tom Lawrence when they met this afternoon? Tom had clearly met the challenge Simpson set for him when he hired him as president of Midwest Controls, Inc. a little more than a y
> Bachmeyer Foods is a large distribution company with more than 5,000 employees and gross sales of more than $900 million (2017). The company purchases salty snack foods and liquor and distributes them to independent retail stores throughout the United St
> High-tech within the corporate world was developed, in part, on the notion of mobile strategy and convenience— the ability to communicate, work remotely and accomplish the same results; cutting the corporate and personal car- bon footprint by reducing co
> Fifty-year-old Paul Sandberg glanced up from his CNC (computer numerically controlled) turning machine to the computer control office above him on the 2nd floor of the workshop. A new program had been initiated that morn- ing and, despite earlier tests,
> The acetate department’s product consisted of about twenty different kinds of viscous liquid acetate used by another department to manufacture transparent film to be left clear or coated with photographic emulsion or iron oxide. Before
> Sitting in Maisson’s Restaurant, Janelle Mosley completely lost interest in her chef salad and now sat sipping her Pinot Grigio and watching with a combination of amusement and curiosity her rival, Jonathan Draper, “doing his own thing.” Seated across th
> Jenny Amaraneni is a social entrepreneur determined to build a social enterprise named SOLO Eyewear. Solo produces a line of hand-crafted sunglasses made from bamboo materials, with a portion of the funds from each pair sold donated to providing eye care
> David Javier was reviewing the consulting firm’s proposed changes in organization structure for Rhinebeck Industrial (RI). As Javier read the report, he wondered whether the changes recommended by the consultants would do more harm than
> Would you prefer to work in an organization with a tight or a loose culture (BookMark)? Explain why.
> What importance would you attribute to leadership statements and actions for influencing cultural values in an organization? Explain.
> Do you think strong subcultures would be a good thing for an organization? Why?
> How might the symbols apparent in a business college differ from symbols in a school of social work? If you have access to both types of schools, walk through them and record any differences you see.
> In which of the four cultures described in Exhibit 11.4 would you prefer to work? Why?
> Describe the four elements of the feedback control model. Which of these elements is more similar to behavior control? Outcome control?
> Many of the companies on Fortune magazine’s list of most admired companies are also on its list of most profitable ones. Some people say this proves that high social capital translates into profits. Other people suggest that high profitability is the pri
> How would you describe the major differences between a hierarchical philosophy of control and a decentralized philosophy of control? Which philosophy of control would be easier for a manager to implement? Discuss.
> How much do you think it is possible for an outsider to discern about the underlying cultural values of an organization by analyzing symbols, ceremonies, dress, or other observable aspects of culture, compared to an insider with several years of work exp
> Numerous large financial institutions, including Lehman Brothers and Merrill Lynch, experienced significant decline or dissolution in recent years. Which of the three causes of organizational decline described in the chapter seems to apply most clearly t
> At the age of 39, after working for nearly 15 years at a leading software company on the West Coast, Alex Schaaf and his soon-to-be-wife, Emily Rockwood, had cashed in their stock options, withdrawn all their savings, maxed out their credit cards, and st
> To better understand the importance of organization structure in your life, do the following assignment. Work with a partner or a small team to select one of the following situations to organize and to complete this exercise: • A copy and print shop • A
> Assume that you could design the perfect organization that reflected your values. What goals would receive priority in that organization? Rank order the list of goals below from 1 to 10 to reflect the goals you consider most important to least important
> Individually or in a small group of two, interview two employees who are in different organizations or who are in the same organization but in different parts and doing different jobs. Ask each person to answer the following questions on a four-point sca
> Think about how you typically handle a dispute with a team member, friend, or co-worker and then answer the following statements based on whether they are True or False for you. There are no right or wrong answers, so answer honestly. Scoring and Interpr
> Respond to each of the following statements based on how you have actually approached a difficult problem at school or work. Indicate whether each statement is True, Somewhat True, or False for you. Scoring and Interpretation: Sum questions 1-9 by giving
> In order to examine differences in the level of innovation encouragement in organizations, you will be asked to rate two organizations. The first should be an organization in which you have work experience, or your university. The second should be someon
> Individually read the measures and objectives below for a business firm. Make a check for each objective/measure item in the correct balanced score- card column. If you think an objective/measure fits into two balanced scorecard categories, write the num
> Think back to one of your most favorite and least favorite courses in school. How did the instructor assert control over you, other students, and the classroom in those courses? Write down your answers for the comparisons below. How were rules, standards
> The era of big data has arrived. Discussions of terabytes and petabytes that were reserved for supercomputing facilities just a few years ago are common today. Companies are recognizing the tremendous value in the data they create, and they want to capit
> You will be analyzing the work technology used in two different small businesses—a local cleaners and a local family restaurant. Your instructor will tell you whether to do this assignment as individuals or in a group. You must visit bo
> This exercise will help you better understand the concept of ethics and what it means to you. It probably will not happen right away, but soon enough in your duties as an organization manager, you will be confronted with a situation that will test the st
> ABC World News ran a special series called “Made in America.” In the opening program, correspondents David Muir and Sharyn Alfonsi removed all foreign-made products from a family’s Dallas, Texas, home
> 1. Divide into groups of three. Half the groups, on one side of the room, are “1s” and the other half are “2s.” 2. The 1s are Pharmacology; the 2s are Radiology. Read only your own role, not the other one. 3. Any students not in a negotiating group can b
> Below, list four organizations you somehow rely on in your daily life for some resource. Examples might be a restaurant, a clothing store, a university, your family, the post office, your wireless provider, an airline, a pizzeria that delivers, and your
> Can an organization be efficient without being effective? Can an inefficient organization still be an effective one? Explain your answers.
> A handful of companies on the Fortune 500 list are more than 100 years old, which is rare. What organizational characteristics do you think might explain 100-year longevity?
> Describe some ways in which the digitalization of business has influenced or affected an organization with which you are familiar, such as your college or university, a local retailer or restaurant, a volunteer organization, a club to which you belong, o
> What is one contingency factor that might help explain the poor performance of GE when Jeffrey Immelt was CEO? Explain.
> What is the difference between a task force and a team? Between liaison role and integrating role? Which of these provides the greatest amount of horizontal coordination?
> What are the primary differences in structure between a traditional, mechanistic organization designed for efficiency and a more flexible organic organization designed for learning?
> Large corporations tend to use different structures in different parts of the organization. Why would that be so?
> When is a functional structure preferable to a divisional structure?
> Describe the virtual network structure. What are the advantages and disadvantages of using this structure compared to performing all activities in-house within an organization?
> To what extent does the true structure of an organization appear on the organization chart? Explain.
> What are the similarities and differences between assessing effectiveness on the basis of competing values versus the strategic constituents approach? Explain.
> What are the advantages and disadvantages of the resource-based approach versus the goal approach for measuring organizational effectiveness?
> Suppose you have been asked to evaluate the effectiveness of the police department in a medium-sized community. Where would you begin, and how would you proceed? What effectiveness approach would you prefer?
> Do you believe mission statements and official goal statements provide an organization with genuine legitimacy in the external environment? When a company such as CVS (discussed in the chapter) makes a decision to stop selling cigarettes because that act
> Discuss the similarities and differences in the strategies described in Porter’s competitive strategies and Miles and Snow’s typology.
> What is the difference between a goal and a strategy as defined in the text? Identify both a goal and a strategy for a campus or community organization with which you are involved.
> What is a goal for the class for which you are reading this text? Who established this goal? Discuss how the goal affects your direction and motivation.
> How might a company’s goals for employee development be related to its goals for innovation and change? To goals for productivity? Can you discuss how these types of goals might conflict in an organization?
> A noted organization theorist once said, “Organizational effectiveness can be whatever top management defines it to be.” Discuss.
> How might the top management of an organization use SWOT analysis or scenario planning to set goals and strategy? Explain.
> Early management theorists believed that organizations should strive to be logical and rational, with a place for everything and everything in its place. Discuss the pros and cons of this approach for organizations today.
