Perkins Case

The present manufacturing company “Perkins Component Company” is a medium-sized producer of highly technical industrial machinery. Within this industry quality of the products, high margins and also delivery time are crucial to stay competitive. The Perkins Component Company faces difficulties due to internal disagreements at the extent of product quality. At Perkins, the two dominant professions, engineering and manufacturing, are in constant battle for influence. In addition, hierarchies and chains of command are not respected which leads to constant struggle between the departments.

Power dynamics differ from the display of formal power on the organisational chart. The formal power is distributed to different people in order to maximize profits and standardise processes. Therefore, Perkins has - like so many others - a pyramid-shaped organisational chart where commands flow downwards and responsibilities decrease from top to bottom.^[1]

The company is divided in two main divisions, engineering and manufacturing, both are 3 levels divisions with one VP. However, recent findings show that this hierarchical structure more often than not opposes innovation and is hindering effective problem solving.^[2]

In our opinion, the problems at Perkins stir from this problematic, somehow obsolete distribution of authority and the own agendas which are pushed within every layer of the company.

Firstly, the two rivaling VPs openly exchange animosities while constantly fighting for influence and power. The prerogatives are not clearly defined and instead of creating one only entity working with towards the same objective two camps are created; both trying to discredit the work and the importance of the other. Frequently, these arguments ended in favour for Burdett (VP Engineering).

Secondly, one layer down a similar struggle surfaces. Tom Darrow, the Chief Technician of Industrial Engineering holds a fair amount of informal power within the manufacturing department. His proposed changes were endorsed by the VP of manufacturing, Ted Luther. It is stated that Darrow’s ideas and responsibilities are repeatedly defended in management committee meetings.

However, these changes needed approval from engineering and when Darrow did not get these, he tried to implement the changes off the record. That these proposals, new drawings and last minute changes initiated by Darrow got executed regardless by the different foremen of the factory also suggests that he is somewhat influential in his department.

In the bigger picture though, one could conclude that Darrow is used as a scapegoat and utilized by Luther to further challenge the engineering department and his rival Fred Burdett.

The heat gets fired when Frank Murtaugh (Chief Technician Engineering) is able to draw Darrow further away from production to prevent interference from his side.

The third person on this layer is the most interesting one: Jerry Taylor. The plant manager (Taylor) was in constant conflict with production control (scheduling) and industrial engineering (performance measurement) due to fairly unjust production performance measurement and pressure of all kinds on the different departments under Taylor.