The Medtek Corporation

The Medtek Corporation has seen tremendous growth from the 1970's into the mid 1980's. During this time period they produced many innovative products that were well received by the healthcare industry. Medtek was respectively increasing sales by 20%, 26% and 21% in the previous three years. Medtek's inability to introduce new products to the market over the past two years is the real problem facing the firm. It is jeopardizing their ability to sustain their growth. A decrease in sales will also lead to less revenue dedicated to R&D in the upcoming years. A decrease in R&D funding will severely limit their ability to create innovative new products for years to come. If Medtek fails to take action on these problems they will risk declining sales and a loss of market share to their competitors in the near future.

There are several underlying causes that are restraining Medtek's ability to introduce new products to the market to sustain future sales growth. The early 1980's brought changes to their external environment such as increased Federal regulations and competitor competition. The new regulation standards forced Medtek to make modifications to their existing products. Their competitors were able to become the second movers of their technology and quickly comply with the new regulations. They were also able to offer their own diagnostic line to compete competitively against Medtek's equipment.

The changing environment put a lot of pressure on Medtek's Technical division. The technical division was the companies R&D department and they are responsible for creating innovative ideas that could be developed into commercial products. Medtek struggled with their organizational structure, especially in the technical division. During their period of rapid growth they implemented a formal organization structure. The changes were made very promptly and failed to address issues such as roles and responsibilities. They failed to address Todd Jick's commandments of managing change. Their implementation plan was rushed, it lacked communication and the structural changes did not create a shared vision and direction.

The different departments under the technical division had no sense of direction, goals or accountability. There was also a clear lack of communication. All the different departments worked in silo's and ran as if they were separate business entities. They would each work towards creating new advancements in their particular fields but the team work across departments was often lacking. For example, preliminary research done by the research department was often disregarded by the advanced development department who started from scratch. The poor transitions