Case Study Sun Microsystems

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Case Study: Sun Microsystems

Case Study: Sun Microsystems Sun Microsystems has an accommodating work environment. The owners’ vision was to create a “Peter Pan” atmosphere where creativity reigns. It is a fun place to work. This loose arrangement has caused some trouble along the way. This study will explore several issues that threaten Sun’s continued success. This is what we know… We know that Sun Microsystems started out with a bang. Their sales revenue and profits have increased exponentially. Their company grew quickly and without a formal structure. We also know that the leaders in the corporation have all the skills necessary to turn their goals into reality. Despite all this, Sun saw their profits crash. And so, they are in quite a predicament… The fact that Sun Microsystems saw their profits crash is only a symptom of the underlying problem that exists in their company. The real problem is that there is no structure in place. Because of this, their organization is not efficient. People do not know who is in charge. They have to wait for approvals. There are inventory issues. Work is being repeated. Because the four founders of the company wanted to start a company with an informal environment and a “Never Grow Up” motto, they have put the future success of their company in jeopardy. This is what we do not know… While we know that the competition for the company was saturated at the end, we do not know the level of competition at the beginning. Knowing this may be beneficial because it could explain the huge sales revenue growth and profit growth at the beginning. This is important because without competition, of course they would own the market and all the profits that went

along with that. Only after competition has entered the market, can the strength of the company be measured. What do we do now? This problem can be addressed in several different ways. Table 1 illustrates several solutions to Sun Microsystems organization issues. Table 1 Sun may choose to create a Divisional Organization. A Divisional Organization is an organization that is divided in smaller sections and each section is responsible for a certain part of the process. Another option would be to create a Functional Organization. In this type of organization, a company organizes it work around functions that are essential to the operation. A Matrix Organization is an option as well. In a Matrix Organization, “arranges teams or groups of people representing various functions of a firm. Each member of the group reports both to the head of the group (say, a program manager or project director) and to the head of the function where housed (say, the vice president of manufacturing).” (Landos, PhD, 2007). Given our knowledge of the owners of Sun Microsystems, they may need something a little less formal. One idea is to simply hold sessions where the employees can discuss issues with the owners and let their opinions of how things are operating known. Still another option is to create a task force to identify and come up with solutions for problem areas. Finally, the company may

decide to create a Business Process Management plan. Business Process Management is “(BPM) is a systematic approach to improving an organization's business processes. BPM activities seek to make business processes more effective, more efficient, and more capable of adapting to an ever-changing environment. BPM is a subset of infrastructure management, the administrative area of concern dealing with maintenance and optimization of an organization's equipment and core operations.” (WhatIs.com, n.d.) For Every Action, There is a Reaction… There are positives and negatives to any of the options above. In a Divisional Organization there is a clear structure. Associates know the structure and the process that they are to follow. There is a definite person or persons in authority from which authorization and guidance is given. Further, it is easy to see how the departments are performing. If there is a department that is struggling, it will be clear where to target improvement. At the same time, a Divisional Organization may continue to repeat work. The owner loses some control and departments are divided. In the case of Sun Microsystems, the loose work environment is eliminated. In a Functional Organization Structure, the owners maintain control, workflow is efficient and the structure is simple. However, the workload for leaders increase and contact with the customer may be weakened. In a Matrix Organization, people with specific knowledge are more accessible. Work assignments are clear and stable and associates can focus on the specific function or their job. On the down side, coordination efforts take more time. This may create conflict and there may be confusion in who is in charge. The owners may simply choose to get the opinion of the associates. They are the ones performing tasks, so they may possibly be the best people to point out inefficient operations.

This method will help the associates’ voices be heard. In return, they will have higher work esteem. Alternatively, associates may not be aware of everything that is contributing to the problem. This method has no structure or authority to it. Finally, the associate’s main concern may not be serving the customer. A different approach may be to form a task force. A task force may be able to tackle problems and address them. In addition, they may be able identify unknown problems and solutions. On the other hand, a task force may not have the authority to make changes. They may not be aware of other factors or have all information necessary to fully understand the problem. The task force might lack structure. Lastly, the customer may not be considered in decisions. One final solution is that the owners may want to adopt a Business Process Management Plan. This choice would give the organization a clear focus. It would involve all employees in the process. This solution stresses the importance of strong leadership. The problems are solved in a logical manner and the results of the efforts are measurable. This solution is not without its negatives. First, information gathering takes a lot of time and setting priorities is difficult. If the wrong priorities are set, it could be detrimental to the success of the company. There is a lot of work involved in BPM. It may become busy work if those involved are not committed to the process. This type of process eliminates the loose work environment and the owner’s control of the structure of the company. And now, we get down to it… The problem, clearly stated, is that there is no structure in place. Because of this, their organization is not efficient. Because this is what is causing work to be repeated, inventory problems, late approvals and profits to decline, a radical change needs to be made. It is clear that structure needs to be established. The lacksidasical method of management that has been in

place must be replaced in order for positive change to come about. Because of this, Sun Microsystems should choose to implement a Business Process Management Plan. While this solution takes time and hard work, it also brings proven results. In addition, it adds a human element. It involves the people doing the work in the process. It takes them into consideration. This will fall in line with the spirit of the “never grow up” philosophy on which the company was founded. So, what did we learn from all of this? In every situation in which change is needed, there is a lesson to be learned that transcends the situation at hand. In this case study, a brilliant company, with bright, intelligent leaders was struggling to maintain their edge. They had a quality product and quality people and still they struggled. I think the lesson learned here is that successful businesses need more than brilliant people and products. Successful businesses need a brilliant plan. It needs a strategic blue print by which problems are anticipated and solved.

References Landos, G., PhD (2007). Glossary of Terms in New Products Management. Retrieved November 27, 2008, from http://faculty.stonehill.edu/glantos/Lantos1/PDF_Folder/BA347_PDF/Glossary%20F %2007.htm WhatIs.com (n.d.). What Is Business Process Management?. Retrieved November 27, 2008, from http://searchcio.techtarget.com/sDefinition/0,,sid182_gci1088464,00.html