Course Work of Business Organization Theory

Organizational Theory

Investing in Artificial Intelligence (AI) Research and Development (R&D)

Investing more funding in the organization’s R&D creates room for the company to retain its highly educated and experienced engineers and scientists. This creates a strong firm’s knowledge base which is an intangible asset which if the AI project succeeds will act as the source of future profit generation. Although the overall R&D results can be codified in reports, some tacit knowledge is retained by employees because of their differences in expertise and hand-on ability. The organization can still control the R&D undertakings and keep the team involved in check. Since the workers are formal employees, they are paid as normal workers and hence the company does not spend extra financing towards their compensation. This poses a risk of losing tacit knowledge if employees involved in the R&D team are fired or leave the organization. Besides, employees may face redundancy in innovativeness as they are bound to stick with the company’s traditions which denies them the flexibility to stretch their imagination.

Launching a fully owned AI research and development subsidiary also offers the firms exclusive monitoring and control of the employee performance and innovation. It also gives the employees involved in the R&D ample time to focus on autonomous vehicle development without engaging in other firm activities. The subsidiary organization is granted autonomy to acquire more human resources and introduce fresh minds. This will enable the team to increase its mental flexibility and explore diverse alternatives without being bound by traditions. Consequently, they will invest more time and effort towards achieving positive results within a shorter time than if they were still performing their other normal duties. The newly formed company will remain as part of the organization in the future hence can be modified and adapted for future technological innovation use. Other than artificial intelligence development, a research ad development subsidiary will act as the company’s backbone in future technological endeavors and continually develop competitive products for the market. It will also allow the company’s professionals to horn their innovative skills and obtain satisfaction in terms of career development. However, it requires a huge amount of capital to create and manage a subsidiary company. The new company will require registration and running expenses which are separate from the company’s financial outlay. Additionally, the subsidiary will require the recruitment of expertise to steer the organization towards the AI innovation project.

Partnering with a major Silicon Valley technology company that has advanced in AI is a highly optimal solution because it makes the R&D more focused. Besides, it absorbs the company’s financial, time, and human resource outlay risk because the chances of success are highly likely. The partnership will also allow the company to spread its risks because any losses can be equally absorbed by the two organizations or according to a pre-determined ratio. Besides, the company employees will get an opportunity to learn various technical cues and practices from the more experienced professionals from the partnering organization which seems to be ahead in the AI development innovation. This will give a platform for the employees to engage in more complex projects for the future growth of the firm. However, partnership means that the two companies are entitled to the right of ownership in case the project is a success. Consequently, profits will be split among them. Due to varying organizational structures and the advancement already made in the AI development by the partner company, it is difficult to monitor results through an independent team.

Merger and Acquisition Project Management

The decision to acquire a company is based on the market fit or the product/service. For instance, an Acquisition like BigEntertainment purchasing CreativeEntertainment is a step in the right direction because it enables the established parent organization to introduce new and creative ideas that will improve its products and services. However, due to the varying organizational structures and cultures, this may be a daunting task though not impossible. This is because the differences among employees are ignored and employee issues are assumed as easy to get through. However, just like in this case, the failure to recognize these employee variations has created a rift for the new organization that if not well addressed may cause an acquisition failure and long-term negative impacts.

As part of the team, I suggest that although the acquisition was to revamp the company's effectiveness and competitiveness in the market, the management should take a vital decision to consider intangible factors. Since the human aspects to the acquisition are overlooked with the notion that the managers and employees can be rehired, it has hurt the long-term outcome of the new corporation. Therefore, an elaborate process through which communication will be improved, a cultural strategy developed, and a clear organizational structure defined must be developed by the team to ensure the current acquisition issues are addressed. Besides, a realistic timeframe should be set upon which various tasks to address these issues can be accomplished and a smooth transition facilitated. I would propose that we start by comparing the current status to the target status. The strategic management report outlining the expected performance of the acquisition should be evaluated to determine the benchmarks placed to guide its performance. Since it has already been noted that the performance has deviated from the target parameters and there are clashes within the newly formed firm, the progress of these alterations should be checked regularly on agreeable intervals. The results achieved from the comparison of actual and target values will guide the team on required planning and controlling initiatives that need to be taken to develop an efficient organizational structure and accommodate diversity among workers from the two merged companies.

I also suggest that the functions of workers at each hierarchy should be clearly defined to ensure each individual knows their job descriptions and the chain of command. Communication channels should also be opened for employees and management to create a feedback loop. This will enable the management to understand employee grievances before they develop into a long-term threat to the company success and also offer room to make suggestions that can be implemented to increase the acquisition effectiveness. Due to diverse organizational culture incorporation, the human resources team should come up with an appropriate and accommodative culture to ensure that all workers feel part of the team and can give their input unreservedly. This can be effectively pursued by evaluating the extent to which the culture has been affected by the merger in relation to the overall cultural skills, habits, and values previously upheld by the company. Moreover, all workers should be trained on employee diversity to ensure the parent firm workers do not feel threatened and the acquired firm workers can exercise their innovativeness to achieve the company goals and objectives.

Honda Motors

PART C: Nissan Motor Corporation

Key Conclusions
            The discussions reveal reduction in Nissan’s production costs from joint ventures with Renault and Mitsubishi. In addition, the company registered great success in production of 100% electric cars, as Toyota controls the Hybrid car technologies. However, it is recommended that the company should replicate lean production practices to eliminate waste, and enhance efficiency, greater operating margin, and ROAs.