Give an example of differentiation in Stanley Lynch’s organization structure

The Stanley Lynch Investment Group is a large investment firm headquartered in New York. The firm has 12
major investment funds, each with analysts operating in a separate department. Along with knowledge of the
financial markets and the businesses it analyzes, Stanley Lynch’s competitive advantage comes from its
advanced and reliable computer systems. Thus an effective information technology (IT) division is a strategic
necessity, and the company’s chief information officer (CIO) holds a key role at the firm.

When the company hired J. T. Kundra as a manager of technology, he learned that the IT division at Stanley
Lynch consisted of 68 employees, most of whom specialized in serving the needs of a particular fund. The IT
employees serving a fund operated as a distinct group, each of them led by a manager who supervised several
employees. (Five employees reported to J. T.)

He also learned that each group set up its own computer system to store information about its projects. The
problems with that arrangement quickly became evident. As J. T. tried to direct his group’s work, he would ask
for documentation of one program or another. Sometimes, no one was sure where to find the documentation;
often he would get three different responses from three different people with three versions of the
documentation. And if he was interested in another group’s project or a software program used in another
department, getting information was next to impossible. He lacked the authority to ask employees in another
group to drop what they were doing to hunt down information he needed.

J. T. concluded that the entire IT division could serve the firm much better if all authorized people had easy
access to the work that had already been done and the software that was available. The logical place to store that
information was online. He wanted to get all IT projects set up in a cloud so that file sharing, and therefore
knowledge sharing, would be more efficient and reliable. A challenge would be to get the other IT groups to buy
in to the new system given that he had authority over so few of the IT workers.

J. T. started by working with his group to blueprint how the system would work. Then he met with two higher-
level managers who report to the CIO. He showed them the plan and explained that fast access to information
would improve the IT group’s quality and efficiency, thus increasing the productivity of the entire firm. He
suggested that the managers require all IT employees to use the cloud system. He even persuaded them that their
use of the system should be measured for performance appraisals, which directly impacts annual bonuses.

The various IT groups quickly came to appreciate that the system would enhance performance. Adoption was
swift, and before long, the IT employees came to think of it as one of their most important software systems.

DISCUSSION QUESTIONS

1. Give an example of differentiation in Stanley Lynch’s organization structure and an example of integration
in this structure.

2. What role did authority play in the adoption of the cloud system by the IT division at Stanley Lynch?

3. How did the IT division use coordination to achieve greater integration?