This study is based on the scenario on the Harrison-Keyes, a global publisher of books, journals, and educational materials. The paper discusses the problems that are faced by the company with its new strategy: e-book publishing. This strategy has been the company’s solution to the current tough competition in the publishing industry. The paper aims to present the problems that are associated with this new strategy and the ways on how the company should handle and solve these problems.
This study’s objective is to present the importance of having the right organization that fits to the strategy of a company. It aims to determine the effect of the organization to the implementation of a strategy especially a global strategy that can bring changes to the production process, distribution and marketing channel that will demand new ways of organization.
Harrison-Keyes is a leading global publisher of technical, scientific, business books and journals, professional and consumer books, textbooks and educational reading materials since 1899. The company holds about 22,700 active titles and publishes about 2000 new titles each year. In recent years, the company has felt the competition from low-cost retailers and other publishing industry players. As an answer to this challenge, the company hired a new CEO who strongly proposes a new strategy for the Harrison-Keyes, the e-book publishing.
With the e-book publishing strategy, many problems arise, from the alignment of the company’s core business to the strategy, to leadership as well as financial problems.
The basic problem of the company came to the challenge of still gaining the top position in the publishing market by creating another market through the e-book publishing strategy. E-book publishing strategy is basically the publication of books through the internet. A company which utilizes the internet and other advancement in technology should have a good information technology system and information system strategy to capitalize the technology properly. This has been the first problem of Harrison-Keyes, the lack of established information technology system. First of all the CIO of the company lacks a strong background in technology. The company needs a CIO that has strong knowledge and can align the company’s information technology system with the implementation of e-book publishing. In most multinational companies today, both the productivity and competitiveness are dependent on an ability to generate and make use of information (Hillesund, 2001). The information needed for the implementation of e-books is a digital and network based technology for both distributing and reading books which needs technological competence, financial resources and access to information (Hillesund, 2001).
Moreover, production of e-books has been largely digitized. Writing, layout, and pre-press preparations are computerized and the publishing workflow is all network-based (Hillesund, 2001). This means that the company needs a standardized information system that will make its production reliable. Publishers will no longer be mere producers of paper books, but digital content agents, producing content in several formats and for different distribution channels, Publishers will produce books on paper and on demand in various digital formats, changing the structure of book production (Hillesund, 2001). The traditional information system of Harrison-Keyes will need a great change to adapt to technological changes brought about by e-book publishing. The company needed a strategic plan like updating their systems to fit to the digital content. Publishers like Harrison-Keyes need to relate to new technologies and should meet the special requirements on structuring and formatting of e-books. To be competitive in the world of digital books, a certain level of competence in the area of technology will have to be developed within the organization and more on to the research and development department of the company.
With the leadership of its CIO, Harrison-Keyes could have been started the project by planning it carefully, making sure that the project was backed up by reliable and capable systems, ensuring that all information and resources needed for the project will be distributed and allocated properly. The company basically needs an integrated information system that will help track its authors and books-in-process as well as the sales and royalties. The company needs a CIO that has strong technical qualifications plus a background in finance, marketing and strategic planning. With today’s technology driven industries, the role of the CIO is moving from technical planning and implementation to strategic planning. CIO tends to focus on the planning and implementation of specific information technologies, rather than on long-term company strategy (Anonymous, 1999). The current CIO of Harrison-Keyes lacks most these skills and the company should consider hiring someone more qualified to the current business plans of Harrison –Keyes.
Another problem of the company is the deal and communications with one of the company’s stakeholders, the outsourcing company, Asia Digital Publishing. Harrison-Keyes’ production manager is having a hard time communicating with the company that will format the e-books and is causing a significant delay to the implementation of the e-book project. The Asia Digital Publishing which was hand-picked by the company’s Executive Vice President for Global Strategy has a good reputation on the business. Looking at the situation, it seems that the problem is in the part of the production manager of Harrison-Keyes. Although he has been in the publishing industry for 25 years, e-books strategy is new to him and with the background of the company’s executive vice president in global strategy and consulting firm, she will not go wrong in picking up a company that should work with Harrison-Keyes.
To solve this issue, Harrison-Keyes might need a staff that will coordinate with Asia Digital, a staff who has good public relation, strong technical background on e-book productions and has good experience dealing with foreign suppliers. A good collaboration with a company that offers formatting for the e-books, along with Digital Rights Management, DRM, website construction maintenance, hosting and payment systems should be established. With the introduction of e-books, the whole production of process of books at Harrison-Keyes will definitely change and the knowledge and understanding of a production manager in the new situation should also be leveraged with the technology used in e-book production.
Another major problem of Harrison-Keyes has also something related to the stakeholders of the e-book supply chain, the authors. A well-known author who has been in the company for years has reservations and fear that his works are at risk of being pirated once becomes digitized. This issue has also put the company’s reputation in bad publicity. The company’s first step to address this problem is to convince the authors that there are existing technologies that will protect their works and prevent piracy. Again, this is another task of the CIO, to conduct researches on the development of new technologies such as encryption and Extensible Rights Markup Language, XrML, that will give protections to authors and the company and it should have been part of the project planning process even before the stakeholders were informed of the e-book project. There are companies that provide software and Digital Rights Management, DRM, systems for the protection of e-books. The problem with Harrison-Keyes is its being not up to date with the latest in technology.
The management of Harrison-Keyes must also gives emphasis on the advantages of e-books on the part of the authors such as reaching a wider audience than by just publishing in print encouraging new readers by producing e-books in an attractive format; gaining status from the wider dissemination of their publications; and gaining revenue from e-book (JISC, 2003). In order for the project to be successful there should be an alignment of the stakeholders such as the publisher which includes its management, the authors, the suppliers and the outsourcing company. By understanding stakeholders’ issues and striving for solutions, a company can maintain support for its operations and expansion plans (Willis, 2005).
Due to the delay of the launching of the project, financial problems arise in Harrison-Keyes. Due to not well-anticipated project cost, the project needed a cost that is beyond the budget of the company. It seems that the CIO and the CFO of Harrison-Keyes has no good strategic planning team. Another problem is that there is someone in the management who lacks good corporate ethics and links information outside the company that causes bad publicity.
Summarizing the problems of Harrison-Keyes, its problems include stakeholder misalignments, organizational structure and lack of good information technology system. Generally, Harrison-Keyes has good strategy but its strategy planning and implementation are hindered by many factors such as having the wrong person at a certain position due to lack of appropriate skills and stakeholders misalignment. Most multinational companies undergo reorganization especially when implementing a new project or strategy that will significantly change the company in order to meet new challenges. Basically, the challenges face by the company is to have a certain level of competence in the e-book publishing.
Considering the scenario on Harrison-Keyes, strategy planning and its relationship with the entire organization and the stakeholders should be taken into consideration.
Organizational structure and strategy are essential elements in the formula of sustainable business performance. Sound organizational structure usually means a certain mix and interaction of talented individuals, working in relevant functions and areas of responsibility, sharing knowledge and related assets, behaving responsively and constructively (Wolfe, 2003). When a structure’s elements are properly aligned with one another, that structure facilitates effective implementation of the firm’s strategies (Barth, 2003). Thus, organizational structure is a critical component of effective strategy implementation processes (Barkerna et al., 2002).
Effective organizational structure provides the stability of the firm to successfully implement its strategies and maintain its current competitive advantages that will be needed for its future strategies (Ireland et al., 2003). A firm’s structure specifies the work to be done and how to do it, given the firm’s strategy or strategies (Jenster & Hussey, 1997). Thus organizational structure influences how managers work and the decisions resulting from that work (Schilling et al, 2001).
Selection of new strategy calls for changes to an organizational structure especially when inefficiencies force it to do so. (Chandler, 1962). Some top-level managers hesitate to conclude that there are problems with the firm’s structure or strategy. Because of these inertial tendencies, structural change is often induced by the actions of stakeholders who are no longer willing to tolerate the firm’s performance.
Harrison-Keyes exhibits a functional type of organizational structure. Functional structure is a structure consisting of a chief executive officer, CEO, and a limited corporate staff with functional line managers in dominant organizational areas such as production, accounting, marketing, research and development, engineering and human resources. This structure allows for functional specialization, thereby facilitating active sharing of knowledge within each functional area. The negative effect of a functional orientation like this is on communication and coordination among those representing different organizational functions. Because of this, the CEO must work hard to verify that the decisions and actions of individual business functions promote the entire firm rather than a single function.
Analyzing Harrison-Keyes’ organizational structure, the new CEO is highly driven by technology while it CFO is not conformed to the new strategy. The company has roster of talents with its executive vice president who has knowledge in global strategy; with its vice president for marketing which is said to be creative; and with its head of the implementation team who seeks for promotion and seems to exert effort to get his promotion.
On the other hand, the company seems to be not ready with the implementation of e-books due to its current CIO who lacks understanding of new technologies and interpretation on how these technologies can be applied to the advantage of the business; financial background to properly set IT investment priorities to achieve business goals; knowledge management and knowledge creation.
The e-book publishing strategy is greatly dependent on new technology so the company needs a reliable CIO that can effectively develop, implement and align information technology strategy of the company with the implementation of e-book publishing. The CIOs of today plays key roles in strategic planning due to the driving force of technology and information.
The company’s production manager although has years of experience in publishing, e-book publishing is entirely different to traditional publishing and therefore should also has to be replaced by someone more knowledgeable of e-books production and process or the company can add another production manager that will be assigned solely on the implementation of e-books.
The main reason behind Harrison-Keyes implementation of e-book publishing is to maintain long-term competitive success which is kind of international strategy. International strategies also allow the firm to search for new markets, resources, core competencies, and technologies as part of its effort to outperform competitors (Begley et al, 2003). Therefore, an effective organizational structure is necessary for its implementation. Global operations such as e-book publishing need proper matching of strategies and organizational structure for coordination and control.
A strategy designed to achieve growth will be ineffective without the appropriate organization of a company’s talent and resources. As a company grows or implements a strategy that causes change to the company, it has to evolve its organizational structure to ensure optimal performance and to deal with changing priorities and business complexity. However, reorganization is a high-risk activity that represents a shock to the corporation, is personal to employees and can result in an erosion of performance. To address the risks associated with reorganization, companies need to be aware of key success factors when implementing reorganization initiatives and to initiate systematic communications plan to influence perceptions ay all levels and stakeholders within the organization (Goold and Campbell, 2002).
Having the right people in place allows a company to face changes and growth. Management needs to attract right people, train them properly if necessary and position them at the right position that can help the company pursue its purpose and meets the reasonable expectations of stakeholders.
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