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Table of contents 1. Introduction of WL Gore & Associates Inc. 3 2. Distinctive features of WL Gore’s organisation and management 3 3. Consistency of Gore’s management approach 5 4. Strengths and weaknesses of WL Gores approach to organisation and management 7 5. Transferability of WL Gore’s organisation and management style to other organisations 9 6. Conclusion 10 7. References 11 1. Introduction of WL Gore & Associates Inc. WL Gore & Associates Inc. is a U.S. global corporation specialising in discovery and product innovation. It was founded by Bill and Vieve Gore in Newark, Delaware in 1958 (Gore, 2018). It is proud of itself because of its contribution to the society in varied fields of life such as outerwear, medical devices, pharmaceutical and aerospace industries. WL Gore is a very successful company with over 2,000 patents recognised worldwide. Recently, it was awarded as the 135th America’s largest private company 2017 and the 149th America’s best employer 2018 (Forbes, 2018). In order to gain these successes, it has believed in its typical management system which is sharply different from other established corporations. Therefore, this report will make clear four main points, including what features are distinctive in WL Gore’s organisation and management, how these distinctive features support to Gore’s consistent management approach, strengths and weaknesses of the approach and the transferability of the approach to other companies. 2. Distinctive features of WL Gore’s organisation and management There are some features that help to build the distinction of WL Gore’s organisation and management. Firstly, from the case study itself of WL Gore & Associates, it is discovered that there is no job title and no hierarchy’s symbols given to Gore’s employees even Bill and Vieve who are founders of WL Gore. Specifically, all its employees are called “associates”, except board of directors and CEO which are legally required. There are also very few heads of functional departments such as HR and IT but these heads are chosen by other associates and they are considered as leaders (Mazal, 2014). This relates to another special strategy called emergent strategy. Following this strategy, leader will be emerged when a team comes together to discuss, debate, or bargain based on problems need to be solved. At this time, leader will be chosen by agreement of all other team members. As Terri, CEO of WL Gore expressed in an interview that when a person accumulates enough people who are willing to follow him, he will become a leader. However, the way leaders use their power of leadership is also different from other traditional organisations. At Gore, leaders’ responsibility is to help team members show their strengths and make them be successful. Leaders are also aware that if they do not follow Gore’s values, they easily lose their leadership (Dimopoulos, 2016). Apart from this, Gore follows team-based structure. At Gore each associate will have a sponsor and this sponsor can be an associate of another sponsor. Additionally, an associate can be member of two or three groups of different projects. Thus, in this kind of organisational structure, people know each other. Specifically, members within a group know each other and members of this group also need to know members of that group. At the end of the day, there are many small basic organisational units forming based on specific products and communication is made by peer to peer, not employers to employees. Last but not least, consensus decision-making is also a unique feature of Gore’ management style. Every group has rights to self-manage their teams. Because there is no supervisors and subordinates, members of a team will share responsibilities to each other and have rights to self-control their workload. Also, they are believed and authorised to make their own decisions without asking approval from top management, or they may consult with others if they feel the decisions may cause serious problems to Gore. However, at Gore decisions are made by agreements of all associates who involve in that specific project. All the above features are so different compared to other traditional companies where leaders are assigned from the top, titles are fixed, and subordinates need to report everything to their leaders (Kelly, 2015). Moreover, most big organisations will have quite same management style. CEO or leaders will make decision and pass it down to their subordinates or teamers. Especially, they have strong voice, and power to fire or downgrade their subordinates that make others must follow them (Dimopoulos, 2016). To be specific, C. R. Bard which is one of direct competitors of WL Gore has followed conventional style of management. Obviously, hierarchy and job titles are existing within Bard, including Board of Directors such as Chairman, Vice Chairman, CEO and COO (Bloomberg, 2018). Also, every division has its own manager. Unlike Gore, leaders at Bard are hired from outside the company through posts on job seeking websites such as Linkedin or they are appointed directly by the top management as promotion. Leaders at Bard have rights and power to make final decisions or give approval to implement employees’ ideas. That is why there is a distance in the relationship of employers and employees, and they cannot communicate from peer to peer compared to Gore’s case. 3. Consistency of Gore’s management approach The following table is made in order to do a comparison between the two forms of management and Gore’s management. Feature Mechanistic forms Organic forms WL Gore Task definition Inflexibility and specialisation required Flexibility and broad definition Flexibility and no specific direction given Coordination and control Regulations and instructions imposed vertically Mutual adjudgment, common culture Mutual adjudgment Communication Only vertical Both vertical and horizontal Both vertical and horizontal Knowledge Centralisation Dispersion Dispersion Commitment and loyalty To direct superiors To company and its objectives To company and follow its values Environmental context Stable with low technological uncertainty Dynamic with significant technological uncertainty and ambiguity Dynamic but quite chaotic Source: (Grant, 2010) According to the above table, it can be easily recognised that all features of WL Gore’s management style are similar to organic forms. In addition, the organic forms are relevant to McGregor’s theory X and Mintzberg’s adhocracy organisational type. Therefore, the two theories will be analysed before making comparison with Gore’s management style. Theory Y is the theory created and developed by McGregor during the period of 1950s-1960s (IWER, 2018). This theory was built focusing on human and based on job motivation and management. This theory stresses on motivating and encouraging employees to come up to their tasks without directions of direct employers. By using this theory, managers can make influence on motivation and productivity of employee in several ways (Morse and Lorsch, 1970). From that, the employees can feel satisfied and best achieve their own goals by committing and involving in their company’s objectives. In addition, following theory Y, employee is considered as the most value of an organisation, and employers would not make an effort on structure or not try to control the employees closely. The employers will support the employees to be mature by paying less external control to the employees and letting them self-control. Consequently, the relationship between employers and employees more inclines to personal level (Hattangadi, 2015). It means the relationship would be improved and become better which will help to create a healthier working environment (Bayer, 2004). These are some key principles of theory Y as follows. Firstly, organisations should decentralise control and minimise management layers, delegate employees responsibility and give them rights of self-making decisions as well as partly self-controlling working environment. Secondly, enlarging the variety of job and giving chances to employees in order to satisfy their ego needs. Thirdly, supporting employees during the process of making decisions in order to bring out capacity of one’s initiative. Finally, appraising employees’ performance after letting them set their own objectives. Adhocracy is an organisational form of flexibility, adaptability and informality which is identified thanks to no formal structure. It can be said that adhocracy is opposite to bureaucracy fashion. The term of adhocracy was first mentioned by Warren Bennis (Bennis, 1968) and its concept was developed by Henry Mintzberg. According to Mintzberg, adhocracy organisational form is very complex and dynamic (Mintzberg, 1989). Additionally, adhocracy and bureaucracy are different from each other. Mintzberg considered bureaucracy is a form of the past while adhocracy is the form of the future (Travica, 1999). Adhocracy can be flourished in varied environment, and deals well with problem solving and innovations (Mintzberg, 1989). However, advanced, complex and automated technological systems are required for its development (Travica, 1999). It is believed that adhocracy contains many characteristics which allow it respond faster than other traditional organisations, i.e. bureaucracy. Followings are some outstanding characteristics of it, including highly organic structure, no formal training, specialised job, specialised team, no clearly defined roles, mutual adjustment and non-bureaucratic culture, absence of hierarchy (Mintzberg, 1989 and Travica, 1999). In adhocracy organisational form, support staff is a very important part and the number of it is very large in order to support the complicated structure. Aside from that mutual adjustment is used as a way of coordination, and some selected models of decentralisation are maintained. Moreover, within this structure, formalisation and decentralisation have a tendency to be low and technostructure is small because technologists and technical experts are engaged in operative core of companies. Also, adhocracy organisations more involve in unusual tasks and sophisticated technology is used within these organisations because their key objectives are innovation so as to adapt to changing environments. Therefore, most adhocracy organisations are medium sized, including pharmaceutics, aerospace and electronics companies (Lunenburg, 2012). As can be seen after the above analyses, Theory X of McGregor and Adhocracy of Mintzberg have some common features which are applied by Gore since its establishment. In the case study itself, it is mentioned that Bill Gore’s ideas about management were affected by McGregor. Gore values a lot on human rather than on system. It creates the best working environment for its associates. People are free to think, to talk, to be creative and to do what they desire if they give commitment and their tasks is based on Gore’s value. They can also choose where they want to belong to. At the end, they will receive as much as what they give because Gore is using mutual adjudgment to grade their associates. How much associates give and contribute to the company, it will fairly and transparently return to them. In conclusion, McGregor’s Theory Y and Mintzberg’s theory, which are more humanistic, are the two consistent theories within Gore. 4. Strengths and weaknesses of WL Gores approach to organisation and management The above distinctive features show that Gore is having lattice management style. This style flats organisational structure in order that information can collaboratively and transparently flow without being unconstrained by traditional top-down ladder. Additionally, it makes all individuals involve in the entire company by freely giving ideas and suggestions in all company’s areas (Benko and Anderson, 2011). In general, lattice companies are allowed to be more flexible, easily and quickly adapt when market conditions change. Moreover, these lattice organisation can take more advantages of their talents, minimise turnover rate and obviously increase productivity (Magloff, 2018). Likewise, Gore gains many advantages thanks to apply and use the lattice management style. Firstly, this style fosters higher level of employee’s motivation because they are treated as owners of the company which makes them feel engage in the company. Furthermore, they can set their own objectives but these objectives should be not against the company’s values. In other words, they can be their own boss, and self-decide what they would like to work on and where they want to contribute so as to bring the best results (Dimopoulos, 2016). In this lattice structure, associates are encouraged to bring out their initiatives, be willing to take risks and make the best performance (Grant and Gale, 2007). However, they have to make commitment on what they decided and need to deliver it as they promised. Therefore, there also exists limitations that is every associate needs to be a self-disciplined person and knows how to self-define objectives. Everyone needs to have high awareness about being self-responsible for the company’s incredible outcomes (Dimopoulos, 2016). Secondly, there is no intermediate within the flat structure so the process of decision making will be faster. Fewer people that decisions need to be consulted with, lesser time is waste and quicker speed that problems are solved (Lombardo, 2018). Moreover, at Gore, associates are giving rights to get advice or what they need directly from any person who can support them to be successful (Dimopoulos, 2016). This builds a straight communication line within the lattice structure. Thirdly, the lattice also makes communication become clear and transparent. It is clear that when information is delivered through a string of mouths and ears, it will end up with distortion, puff or deflation. The more layers that information is passed across, the more misunderstanding or miscommunication will be made. Therefore, the lattice helps to avoid these matters because information will be delivered straight to the end person (Lombardo, 2018). Fourthly, less dominance and supervision are required. It is believed that heads or owners of organisations have to be able to control and monitor all things happened within their companies, not except their employees. Nevertheless, some studies have shown that the less time leaders spend for managing their followers, the more productive their followers can make since they are given higher sense of responsibility. On the other hand, Gore is facing with several disadvantages of the lattice management style. First of all, management can easily be out of control, especially when number of associate is too out of proportion compared to number of leaders (Lombardo, 2018). It is obvious that people will always be responsible or perform perfectly within an organisation. Then, it will become worse if there is not enough people to control the situation. Although Gore tries to keep the maximum of 200 people for each manufacturing facility and many teams are divided within a facility; out of control is unavoidable sometimes. The next disadvantage could be work-relationship. When individuals belongs to several groups, it is not easy to keep connecting with all other associates on personal level, which is very crucial in building trust and promoting responsibility of employees for their works and their companies as a whole (Lombardo, 2018). Furthermore, at Gore as a person can play different roles such as associate or sponsor or leader in different groups at the same time, it creates chaos in their duties and the implementation of tasks. The other weaknesses are groupthink and conformity. It is a term of psychological phenomenon which arises within a group of individuals where every members try to lessen group conflicts and strive for consensus decisions within their group (Cherry, 2018). In several cases of groupthink, individuals try to leave their own beliefs and agree with opinions of other group members (Bloom, 2010). Although groupthink helps to increase the group cohesiveness, it could result in inefficient, unproductive or even disastrous outcomes because people may commit serious mistakes in case that all group members converge hurriedly (Janis, 1982 and Janis, 1983). In August, 2018, Cherry also stated that groupthink restraints individual opinions and initiatives, and finally controls innovation (Cherry, 2018). Lastly, conformity is an act happened when people try to match their attitudes, personal beliefs and behaviours with norms of their group (Cialdini and Goldstein, 2004). People are forced to consent and often make conformity because of the security and values of their group without realistic appraisal (McLeod, 2011). At the end, conformity could lead to bad results as same as groupthink because people need to think and act as they are in a group, and they need to compromise between themselves and their group members. 5. Transferability of WL Gore’s organisation and management style to other organisations As Kelly expressed in an interview, the lattice management style are still being evolved by Gore and Gore has not figured it all out. Therefore, if another CEO would like to apply the lattice, there are some points that they should follow. Firstly, managers need to understand the values which are embedded in their companies. They need to know what kind of behaviours are rewarded and strengthened during the time of operation of the companies? Are they cultures which are believed in and motivate employees? Do these cultures help to strengthen a collaborative spirit? Do they embolden knowledge sharing? All these things that managers should understand and tackle as the priority. There is a biggest mistake organisations can make is to enunciate all the great values but they do not live up to. Subsequently, people may feel cynic because the values are not same as what they can see every day from their managers (Dimopoulos, 2016). Secondly, it is a must that company should evaluate their leadership model. It is really vital to pay attention to the leaders’ motivation, the way they are rewarded and what they value. If the company ignores this point, it may bring troubles. The lattice style requires leaders acknowledge and implement their roles differently. They are not commanders or superiors, their responsibilities are to support others of their organisation successful. They need to throw away their power and manage to allow this disordered process to happen. Thus, the leaders can get several of different viewpoints as well as perceptions, and their teams can come together for decision-making (Dimopoulos, 2016). Thirdly, assessments and balances need to be transparent and clear for everyone. At Gore, the process has been viewed by all the peers; however, in another company’s case, it can be something else. One of the important thing should be embedded in the management practices is what reward and reinforce the values of the company. This should be the succession that companies should follow if they would like to apply Gore’s culture (Dimopoulos, 2016). Actually, it is obvious that culture is one of the things that is difficult to be transferred and applied to another organisation. Because at the beginning, every organisation will build their own culture and if it does not bring bad things to the company, no company will accept to adopt new culture. Especially, people who are living with and within the culture, they might refuse to change because they may think their current culture is not bad and they are scared to change and adopt new one. However, some types of organisations that is impossible to transfer to Gore’s management are engineering firms, medical field organisations, designers or production teams and technology. Because these kinds of firms focus on human, creativity and innovation which are key things paid attention to by the lattice type. Apart from culture, which is quite difficult to be transferred, innovation and technology are the things can be transferable. Because technology and innovation are the things that are easily imitated and they can be transferred to another technology based company. 6. Conclusion In conclusion, Gore’s lattice structure is considered as a new management style that can adapt with changing environment where people want to be free to be creative and be adjudged suitably and correctly. The lattice can bring both positive and negative to the company; however, it depends on what kind of company apply it. For those working on innovative and creative aspects such as IT, pharmacy, engineering and designers, the lattice can be an ideal but before applying it, there are some factors should be considered. 7. References Bayer, R. (2004). [online] Upperbay.org. Available at: http://upperbay.org/DO\%20NOT\%20TOUCH\%20-\%20WEBSITE/articles/employee\%20management.pdf [Accessed 1 Oct. 2018]. Benko, C. and Anderson, M. (2011). The Lattice That Has Replaced The Corporate Ladder. [online] Forbes.com. Available at: https://www.forbes.com/2011/03/16/corporate-lattice-ladder-leadership-managing-hierarchy.html#1e7f4d4a3228 [Accessed 30 Sep. 2018]. Bennis, W. (1968). The temporary society. New York: Harper & Row. Bloomberg.com. (2018). Health Care Equipment and Supplies - Company Overview of C. R. Bard, Inc.. [online] Available at: https://www.bloomberg.com/research/stocks/private/committees.asp?privcapId=254131 [Accessed 29 Sep. 2018]. Cherry, K. (2018). Groupthink and Why We Strive for Consensus. [online] Verywell Mind. Available at: https://www.verywellmind.com/what-is-groupthink-2795213 [Accessed 1 Oct. 2018]. Cialdini, R. and Goldstein, N. (2004). Social Influence: Compliance and Conformity. Annual Review of Psychology, 55(1), pp.591-621. Dimopoulos, S. (2016). W.L. Gore: Lessons from a Management Revolutionary. [online] Linkedin. Available at: https://www.linkedin.com/pulse/wl-gore-lessons-from-management-revolutionary-spiros-dimopoulos [Accessed 29 Sep. 2018]. Forbes.com. (2018). #149 WL Gore & Associates. [online] Available at: https://www.forbes.com/companies/wl-gore-associates/#3f312059b7da [Accessed 29 Sep. 2018]. Gore. (2018). The Gore Story | History and Information | Gore. [online] Available at: https://www.gore.com/about/the-gore-story#our-history [Accessed 28 Sep. 2018]. Grant, R. (2010). Contemporary strategy analysis. 7th ed. New Jersey: Wiley. Grant, T. and Gale, T. (2007). International Directory of Company Histories. Farmington Hills: Saint James Press [Imprint]. Hattangadi, V. (2015). Theory X & Theory Y. International Journal of Recent Research Aspects, 2(4), pp.20-21. IWER. (2018). Institute for work and employment research. [online] Available at: http://iwer.mit.edu/about/iwer-pioneers/douglas-m-mcgregor/ [Accessed 1 Oct. 2018]. Janis, I. (1982). Decision making under stress. New York: Free Press. Janis, I. (1983). Groupthink. Small Groups and Social Interaction, 2, pp.39-46. Kelly, T. (2015). What Its Like To Lead A Non-Hierarchical Workplace. [online] Wbur.org. Available at: http://www.wbur.org/hereandnow/2015/07/01/wl-gore-ceo-terri-kelly [Accessed 29 Sep. 2018]. Lombardo, C. (2018). 11 Key Advantages and Disadvantages of a Flat Organizational Structure | ConnectUS. [online] Connectusfund.org. Available at: https://connectusfund.org/11-key-advantages-and-disadvantages-of-a-flat-organizational-structure [Accessed 1 Oct. 2018]. Lunenburg, F. (2012). Organizational Structure: Mintzberg’s Framework. INTERNATIONAL JOURNAL OF SCHOLARLY, ACADEMIC, INTELLECTUAL DIVERSITY, 14(1). Magloff, L. (2018). How Does a Lattice Organization Work?. [online] Smallbusiness.chron.com. Available at: https://smallbusiness.chron.com/lattice-organization-work-3846.html [Accessed 1 Oct. 2018]. Mazal, J. (2014). Flat and Fluid: How Companies Without Hierarchy Manage Themselves. [online] Medium. Available at: https://medium.com/@jorgemazal/flat-and-fluid-how-companies-without-hierarchy-manage-themselves-2da856304b27 [Accessed 28 Sep. 2018]. McLeod, S. (2011). Conformity. Simply Psychology. Mintzberg, H. (1989). Mintzberg on Management: Inside Our Strange World of Organizations. New York: Free Press. Morse, J. and Lorsch, J. (1970). Beyond Theory Y. [online] Harvard Business Review. Available at: https://hbr.org/1970/05/beyond-theory-y [Accessed 1 Oct. 2018]. Travica, B. (1999). New organizational designs. Stamford, Conn: Ablex Pub. Corp. Case 24 W. L. Gore & Associates: Rethinking Management? If a man could flow with the stream, grow with the way of nature, he’d accomplish more and he’d be happier doing it than bucking the flow of the water. —W. L. GORE Malcolm Gladwell (author of The Tipping Point and Outliers) described his visit to W. L. Gore & Associates (Gore) as follows: When I visited a Gore associate named Bob Hen, at one of the company’s plants in Delaware, I tried, unsuccessfully, to get him to tell me what his position was. I suspected, from the fact that he had been recommended to me, that he was one of the top executives. But his office wasn’t any bigger than anyone else’s. His card just called him an “associate.” He didn’t seem to have a secretary, one that I could see anyway. He wasn’t dressed any differently from anyone else, and when I kept asking the question again and again, all he finally said, with a big grin, was, “I’m a meddler.”1 The absence of job titles and the lack of the normal symbols of hierarchy are not the only things that are different about Gore. Since its founding in 1958, Gore has deliberately adopted a system of management that contrasts sharply with that of other established corporations. While the styles of management of all start-up companies reflect the personality and values of their founders, the remarkable thing about Gore is that, as a $2.5 billion company with 8500 employees (“associates”) in facilities located in 24 countries of the world, its organizational structure and man- agement systems continue to defy the principles under which corporations of similar size and complexity are managed. The Founding of Gore Wilbert L. (Bill) Gore left DuPont in 1958 after 17 years as a research scien- tist. At DuPont, Gore had been working on a new synthetic material called This case was prepared by Robert M. Grant. ©2015 Robert M. Grant. Grant, RM 2016, Contemporary Strategy Analysis : Text and Cases Edition, Wiley, Somerset. Available from: ProQuest Ebook Central. [4 March 2018]. Created from northampton on 2018-03-04 22:27:27. C op yr ig ht © 2 01 6. W ile y. A ll rig ht s re se rv ed . CASE 24 W. L. GORE & ASSOCIATES: RETHINKING MANAGEMENT? 719 polytetrafluoroethylene (PTFE), which it had branded “Teflon.” Gore was convinced that DuPont’s commitment to a business model based on large industrial markets for basic chemical products had caused it to overlook a whole range of innovative applications for PTFE. In forming a business together with his wife, Vieve, Gore was also motivated by the desire to create the energy and passion that he had experi- enced when working in small research teams at DuPont on those occasions when they were given the freedom to pursue innovation. Working out of their own home in Newark, Delaware, and with the help of their son, Bob, the Gore, first product was Teflon-insulated cable (which was used for the Apollo space program among other applications). The company’s biggest breakthrough was the result of Bob Gore’s discovery of the potential of Teflon to be stretched and laced with microscopic holes. The result- ing fabric had several desirable properties; in particular, it shed water droplets but was also breathable. Gore-Tex received a US patent in 1976. Not only did it have a wide range of applications for outdoor clothing, the fact that Gore-Tex was chemi- cally inert and resistant to infection made it an excellent material for medical appli- cations such as artificial arteries and intravenous bags. The potential to vary the size of the microscopic holes in Gore-Tex made it ideal for a wide range of filtration applications. Origins of the Gore Management Philosophy FundingUniverse.com describes the development of Bill Gore’s management ideas as follows: From their basement office, the Gores expanded into a separate production facil- ity in their hometown of Newark, Delaware. Sales were brisk after initial product introductions. By 1965, just seven years after the business had started, Gore & Associates was employing about 200 people. It was about that time that Gore began to develop and implement the unique management system and philosophy for which his company would become recognized. Gore noticed that as his com- pany had grown, efficiency and productivity had started to decline. He needed a new management structure, but he feared that the popular pyramid management structure that was in vogue at the time suppressed the creativity and innovation that he valued so greatly. Instead of adopting the pyramid structure, Gore decided to create his own system. During World War II, while on a task force at DuPont, Gore had learned of another type of organizational structure called the lattice system, which was devel- oped to enhance the ingenuity and overall performance of a group working toward a goal. It emphasized communication and cooperation rather than hierarchy of authority. Under the system that Gore developed, any person was allowed to make a decision as long as it was fair, encouraged others, and made a commitment to the company. Consultation was required only for decisions that could potentially cause serious damage to the enterprise. Furthermore, new associates joined the company on the same effective authority level as all the other workers, including Bill and Vieve. There were no titles or bosses, with only a few exceptions, and commands were replaced by personal commitments. Grant, RM 2016, Contemporary Strategy Analysis : Text and Cases Edition, Wiley, Somerset. Available from: ProQuest Ebook Central. [4 March 2018]. Created from northampton on 2018-03-04 22:27:27. C op yr ig ht © 2 01 6. W ile y. A ll rig ht s re se rv ed . 720 CASES TO ACCOMPANY CONTEMPORARY STRATEGY ANALYSIS New employees started out working in an area best suited to their talents, under the guidance of a sponsor. As the employee progressed there came more respon- sibility, and workers were paid according to their individual contribution. “Team members know who is producing,” Bill explained in a February 1986 issue of the Phoenix Business Journal. “They won’t put up with poor performance. There is tre- mendous peer pressure. You promote yourself by gaining knowledge and working hard, every day. There is no competition, except with yourself.” The effect of the system was to encourage workers to be creative, take risks, and perform at their highest level.2 Bill Gore’s ideas about management were influenced by Douglas McGregor’s The Human Side of Enterprise, which was published as Gore’s own company was in its start-up phase. In it, McGregor identifies two models of management: the conven- tional model of management, rooted in Taylor’s scientific management, and Weber’s principles of bureaucracy, which he terms “Theory X.” At its core is the assumption that work is unpleasant, that employees are motivated only by money, and that man- agement’s principal role is to prevent shirking. “Theory Y” is rooted in the work of the human relations school of management, which assumes that individuals are self- motivated, anxious to solve problems, and capable of working harmoniously on joint tasks. A key element in Bill Gore’s management thinking related to the limits of organi- zational size. He believed that the need for interpersonal trust would result in orga- nizations declining in effectiveness once they reached about 200 members. Hence, in 1967, rather than expand their Delaware facility, Bill and Vieve decided to build a second manufacturing facility in Flagstaff, Arizona. From then on, Gore built a new facility each time an existing unit reached 200 associates. According to Malcolm Gladwell, Gore’s insistence upon small organizational units is an application of a principle developed by anthropologist Robin Dunbar. According to Dunbar, social groups are limited by individuals’ capacity to manage complex social relationships. Among primates, the size of the typical social group for a species is correlated with the size of the neocortex of that species’ brain. For humans, Dunbar estimates that 148 is the maximum number of individuals that a person can comfortably have social relations with. Across a range of different societ- ies, Dunbar found that 150 was the typical maximum size of tribes, religious groups, and army units.3 Organization Structure and Management Principles The Gore organization does include elements of hierarchy. For example, as a cor- poration, it is legally required to have a board of directors—this is chaired by Bob Gore. There is also a CEO, Terri Kelly. The company is organized into four divi- sions (fabrics, medical, industrial, and electronic products) each with a recognized “leader.” Within these divisions there are specific business units, each based upon a group of products. There are also specialized, company-wide functions such as human resources and information technology. What is lacking is a codified set of ranks and positions. Gore associates are expected to adapt their roles to match their skills and aptitudes. The basic organiza- tional units are small, self-managing teams. Grant, RM 2016, Contemporary Strategy Analysis : Text and Cases Edition, Wiley, Somerset. Available from: ProQuest Ebook Central. [4 March 2018]. Created from northampton on 2018-03-04 22:27:27. C op yr ig ht © 2 01 6. W ile y. A ll rig ht s re se rv ed . CASE 24 W. L. GORE & ASSOCIATES: RETHINKING MANAGEMENT? 721 Relationships within teams and between teams are based upon the concept of a lattice rather than a conventional hierarchy. The idea of a lattice is that every organizational member is connected to every other organizational member within the particular facility. In the lattice, communication is peer to peer, not superior to subordinate. For Bill Gore, this was a more natural way to organize. He observed that in most formal organizations it was through informal connections that things actually got done: “Most of us delight in going around the formal procedures and doing things the straightforward and easy way.”4 New associates are assigned to a “sponsor” whose job is to introduce the new hire to the company and guide him or her through the lattice. The new hire is likely to spend time with several teams during the first few months of employment. It is up to the new associate and a team to find a good match. An associate is free to find a new sponsor if desired. Typically, each associate works on two or three different project teams. Annual reviews are peer based. Information is collected from at least 20 other associates. Each associate is then ranked against every other associate within the unit in terms of overall contribution. This ranking determines compensation. The company’s beliefs, management principles, and work culture are articulated on its website (Exhibit 1). Leadership Leadership is important at Gore, but the basic principle is that of natural leadership: “If you call a meeting and people show up—you’re a leader.”5 Teams can appoint team leaders; they can also replace their team leaders. As a result, every team leader’s accountability is to the team. “Someone who is accustomed to snapping their fingers and having people respond will be frustrated,” says John McMillan, a Gore associate. “I snap my fingers and nobody will do anything. My job is to acquire followership, articulate a goal and get there … and hope the rest of the people think that makes sense.”6 CEO Terri Kelly compares the conventional approach to leadership with Gore’s “distributed leadership model”: The model of the single powerful leader who operates through command and control is attractive in its simplicity … In reality, it is impractical to expect the single leader to have all the answers, and history has shown that relying upon rigid con- trol mechanisms will not prevent catastrophic outcomes. It’s far better to rely upon a broad base of individuals and leaders who share a common set of values and feel personal ownership for the overall success of the organization. And as organiza- tions grow in size and complexity, it becomes even more critical to distribute the leadership load . . . The capacity of the organization increases when it distributes the leadership load to competent leaders on the ground who can make the best knowledge-based decisions.7 She argues that talented newcomers to the workforce adapt much more easily to the distributed leadership than to traditional modes of management. Young people recognize they have choices, are not wedded to a single organization, and will move to where they perceive the best opportunities. As a result companies that persevere with traditional management models will find it difficult to retain the best talent. At the same time, warns Kelly, making the shift to a distributed leadership model is Grant, RM 2016, Contemporary Strategy Analysis : Text and Cases Edition, Wiley, Somerset. Available from: ProQuest Ebook Central. [4 March 2018]. Created from northampton on 2018-03-04 22:27:27. C op yr ig ht © 2 01 6. W ile y. A ll rig ht s re se rv ed . 722 CASES TO ACCOMPANY CONTEMPORARY STRATEGY ANALYSIS EXHIBIT 1 What We Believe Founder Bill Gore built the company on a set of beliefs and principles that guide us in the decisions we make, in the work we do, and in our behavior toward others. What we believe is the basis for our strong culture, which con- nects Gore associates worldwide in a common bond. FUNDAMENTAL BELIEFS Belief in the individual: If you trust individuals and believe in them, they will be motivated to do what’s right for the company. Power of small teams: Our lattice organization har- nesses the fast decision-making, diverse perspectives, and collaboration of small teams. All in the same boat: All Gore associates are part owners of the company through the associate stock plan. Not only does this allow us to share in the risks and rewards of the company; it gives us an added incentive to stay committed to its long-term success. As a result, we feel we are all in this effort together, and believe we should always consider what’s best for the company as a whole when making decisions. Long-term view: Our investment decisions are based on long-term payoff and our fundamental beliefs are not sacrificed for short-term gain. Guiding Principles ◆ Freedom: the company was designed to be an orga- nization in which associates can achieve their own goals best by directing their efforts toward the suc- cess of the corporation; action is prized; ideas are encouraged; and making mistakes is viewed as part of the creative process. We define freedom as being empowered to encourage each other to grow in knowledge, skill, scope of responsibility, and range of activities. We believe that associates will exceed expectations when given the freedom to do so. ◆ Fairness: everyone at Gore sincerely tries to be fair with each other, our suppliers, our customers and anyone else with whom we do business. ◆ Commitment: we are not assigned tasks; rather, we each make our own commitments and keep them. ◆ Waterline: everyone at Gore consults with other associates before taking actions that might be “below the waterline”—causing serious damage to the company. Working in Our Unique Culture Our founder Bill Gore once said, “The objective of the Enterprise is to make money and have fun doing so.” And we still believe that, more than 50 years later. Because we are all part owners of the company through the associate stock plan, Gore associates expect a lot from each other. Innovation and creativ- ity; high ethics and integrity; making commitments and standing behind them. We work hard at living up to these expectations as we strive for business success. a challenge to top management that requires a fundamental change in the values, attitudes, and reward systems that are deeply embedded in most organizations: It will require a shift within the organization from valuing a key few to valuing the unique contributions of many. Individuals will need to feel they have a voice and can be heard. Leaders will need to recognize that their primary role is to empower others versus build their own power. They will no longer stand behind a title with assumed authority to tell people what to do. Grant, RM 2016, Contemporary Strategy Analysis : Text and Cases Edition, Wiley, Somerset. Available from: ProQuest Ebook Central. [4 March 2018]. Created from northampton on 2018-03-04 22:27:27. C op yr ig ht © 2 01 6. W ile y. A ll rig ht s re se rv ed . CASE 24 W. L. GORE & ASSOCIATES: RETHINKING MANAGEMENT? 723 But we also trust and respect each other and believe it’s important to celebrate success. Gore is much less formal than most work- places. Our relationships with other associates are open and informal and we strive to treat everyone respectfully and fairly. This type of environment naturally promotes social interaction and many associates have made lifelong friends with those they met working at Gore. Do Something You’re Passionate About At Gore, we believe it’s important to have pas- sion for what you do. If you’re passionate about your work, you are naturally going to be highly self-motivated and focused. If you feel pride and ownership, you will want to do whatever it takes to be successful and have an impact. So when you apply for an opportunity at Gore, be sure you’re going to be passionate about the work you’ll be doing. The Lattice Structure and Individual Accountability Gore’s unique “lattice” management structure, which illustrates a nonhierarchical system based on interconnection among associates, is free from traditional bosses and managers. There is no assigned authority, and we become leaders based on our ability to gain the respect of our peers and to attract followers. You will be responsible for managing your own workload and will be accountable to others on your team. More importantly, only you can make a commitment to do something (for example, a task, a project, or a new role)—but once you make a commitment, you will be expected to meet it. A “core commitment” is your primary area of concen- tration. You may take on additional commitments depending on your interests, the company’s needs, and your availability. Relationships and Direct Communication Relationships are everything at Gore—relation- ships with each other, with customers, with vendors and suppliers and with our surround- ing communities. We encourage people to build and maintain long-term relationships by com- municating directly. Of course we all use e-mail, but we find that face-to-face meetings and phone calls work best when collaborating with others. Sponsors Everyone at Gore has a sponsor, who is committed to helping you succeed. Sponsors are responsible for supporting your growth, for providing good feedback on your strengths and areas that offer opportunities for development and for helping you connect with others in the organization. Source: www.gore.com/en_xx/careers/whoweare/ about-gore.html, W. L. Gore & Associates: Beliefs, Principles and Culture. Reproduced by permission of W. L. Gore & Associates. Leaders’ focus will shift to creating the right environment and instilling the right values that can enable capable leaders to emerge. They will recognize that they are only leaders if they have willing followers, and that this needs to be earned every day. Ultimately their contributions will be judged by the people they lead. Most rewards systems depend upon higher-level management to assess the effec- tiveness of the leader. This view can be somewhat limited and biased by the fact the managers were often the ones who put the leader in the role in the first place. Grant, RM 2016, Contemporary Strategy Analysis : Text and Cases Edition, Wiley, Somerset. Available from: ProQuest Ebook Central. [4 March 2018]. Created from northampton on 2018-03-04 22:27:27. C op yr ig ht © 2 01 6. W ile y. A ll rig ht s re se rv ed . 724 CASES TO ACCOMPANY CONTEMPORARY STRATEGY ANALYSIS Those who know their leaders best are typically the individuals they lead. If you want individuals to have a voice in the organization, they must also have a voice in selecting and evaluating their leaders. In our company, we have found it very useful to adopt a peer ranking system. All associates get the opportunity to rank members of their team, including their leaders. They are asked to create a contribution list in rank order based on who they believe is making the greatest contribution to the success of the enterprise. This approach serves as an excellent form of “checks and balances” when it comes to who is truly recognized for their contributions as well as for overall leadership.8 EXHIBIT 2 Examples of Innovation at W. L. Gore & Associates Change Music How did the creators of GORE-TEX® products—worn by outdoor enthusiasts and people with active life- styles all over the world—invent a new kind of guitar string? Although manufacturers have coated their guitar strings for many years to make them last longer by pro- tecting them from perspiration, oil, and dirt the coating severely compromised the quality of the sound. Gore had no presence in the music industry until one associate envisioned a completely new type of guitar string that would prevent string contamination, last longer, and be more comfortable for musicians to play. Relying on the company’s unique culture and mentoring system to support his efforts, he formed a cross-functional team—including Michael and John— to make it happen. Each member of the Gore team had the knowledge and know-how needed to develop this exciting new product. With the entrepreneurial spirit characteristic of Gore, they took this innovative concept to the mar- ketplace in less than two years. But the team’s commitment to integrity didn’t stop in the lab. They asked 15,000 musicians to test the new strings for sound quality before the product was intro- duced. Since then, revolutionary ELIXIR® Strings have inspired a generation of musicians all over the world to pick up their guitars and play. And their ELIXIR® Strings experience and the challenges they overcame have changed their lives too. Change Lives How did the creators of GORE-TEX® products—worn by outdoor enthusiasts and people with active lifestyles all over the world—invent material to patch human hearts? For people with a serious heart problem known as an atrial septal defect, or “hole in the heart,” open heart surgery was once the only treatment. The surgeon makes an incision in the chest to expose the heart; a heart-lung bypass machine pumps blood while the heart is stopped and the defect is patched. Many patients with this condition are infants and small chil- dren, for whom this surgery poses an even greater risk. A dedicated team of Gore associates—including Hannah, Nitin, and Sarah—developed a minimally invasive device that physicians implant through a car- diac catheter to permanently close the hole without Grant, RM 2016, Contemporary Strategy Analysis : Text and Cases Edition, Wiley, Somerset. Available from: ProQuest Ebook Central. [4 March 2018]. Created from northampton on 2018-03-04 22:27:27. C op yr ig ht © 2 01 6. W ile y. A ll rig ht s re se rv ed . CASE 24 W. L. GORE & ASSOCIATES: RETHINKING MANAGEMENT? 725 major surgery. Driven by Gore’s core values of integrity, innovation, and quality, the team spent years perfecting the device before taking it to mar- ket. Patients treated this way experience much less pain, recover much more easily and quickly, and have less scarring. Since then, the GORE HELEX septal occluder has changed the way doctors treat patients with this heart defect and has helped thousands of patients throughout the world—more than half of them infants and children—lead normal, healthy lives. And the team’s experience with the septal occluder product changed their lives, too. Change Industries How did the creators of GORE-TEX® products— worn by outdoor enthusiasts and people with active lifestyles all over the world—invent mate- rial that protects firefighters from heat, flames, and hazardous chemicals? Gore makes a line of protective fabrics based on its patented membrane technologies. These fabrics are used by Gore’s customers—garment manufacturers—as one layer of protective cloth- ing for military and law enforcement uniforms, medical protective wear, workwear, and turnout gear for fire and safety personnel. Firefighters rely on protective gear—includ- ing boots, pants, jackets, gloves, and headgear— to keep them safe. While already incorporating waterproof and breathable GORE-TEX® fabric to improve the comfort and quality of their gear, the firefighting industry identified a need for bar- rier fabrics that also protected firefighters against bloodborne pathogens and common fire ground chemicals. Dave, Henri, and Ron were part of a cross-functional team that set out to engineer high-performance CROSSTECH® protective barrier fabric to meet this need. By building relationships with firefighters, suppliers, and industry experts, the global Gore team came to understand the extreme condi- tions that firefighters are exposed to. Harnessing deep knowledge of Gore’s membrane technolo- gies and their passion for making a difference, they developed Gore protective barrier fabrics that change the way firefighters respond to emergencies. And their fire service experience and the challenges they overcame have changed their lives, too. Source: “Associates Stories,” http://www.gore.com/ en_xx/careers/associatestories/1234722965408.html, accessed October 1, 2012. Reproduced by permission of W. L. Gore & Associates. Innovation The success of Gore’s unusual management system is its capacity for innovation. Between 1976 and the end of May 2012, Gore received 1026 US patents. Even more remarkable has been its ability to extend its existing technological breakthroughs to a wide variety of new applications. Central to Gore’s ability to innovate is its willing- ness to allow individuals the freedom to pursue their own projects: each associate is allowed a half day each week of “dabble time.” The company’s website gives examples of the results of these initiatives (Exhibit 2). Gary Hamel closes his discussion of Gore with the following challenge: Grant, RM 2016, Contemporary Strategy Analysis : Text and Cases Edition, Wiley, Somerset. Available from: ProQuest Ebook Central. [4 March 2018]. Created from northampton on 2018-03-04 22:27:27. C op yr ig ht © 2 01 6. W ile y. A ll rig ht s re se rv ed . 726 CASES TO ACCOMPANY CONTEMPORARY STRATEGY ANALYSIS Notes 1. M. Gladwell, The Tipping Point (Little, Brown & Co., London, 2000). 2. “W. L. Gore & Associates, Inc. History,” http://www. fundinguniverse.com/company-histories/WL-Gore-amp;- Associates-Inc-Company-History.html, accessed July 20, 2015. 3. Gladwell, op. cit.: 177–81. 4. Quoted by G. Hamel with B. Breen, The Future of Management (Harvard Business School Press, Boston, MA, 2007, p. 87). 5. Reprinted by permission of Harvard Business School Press from The Future of Management by Gary Hamel. Boston, MA, 2007, p. 100 Copyright © 2007 by the Harvard Business School Publishing Corporation; all rights reserved. 6. “W. L. Gore & Associates, Inc.: Quality’s Different Drummer,” IMPO Magazine, January 14, 2002, http://www.impomag.com/articles/2002/01/ wl-gore-associates-inc-qualitys-different-drummer, accessed July 20, 2015. 7. Terri Kelly, “No More Heroes: Distributed Leadership,” Management Inforation eXchange (April 8, 2010), http://www.managementexchange.com/blog/no-more- heroes, accessed July 20, 2015. 8. Ibid. 9. Reprinted by permission of Harvard Business School Press from The Future of Management by Gary Hamel. Boston, MA, 2007, p. 100. Copyright © 2007 by the Harvard Business School Publishing Corporation; all rights reserved. Bill Gore was a 40-something chemical engineer when he laid the foundations for his innovation democracy. I don’t know about you, but a middle-aged polytetra- fluoroethylene-loving chemist isn’t my mental image of a wild-eyed management innovator. Yet think about how radical Gore’s vision must have seemed back in 1958. Fifty years later, postmodern management hipsters … THE UNIVERSITY OF NORTHAMPTON Faculty of Business & Law MODULE: COMPETITIVE STRATEGY & INOVATION 2018-2019 Module Code Level Credit Value Module Leader STRM043 7 20 Adrian Pryce Assignment 2 Brief – “Haier or WL Gore” Assignment title: An Individual Written Case Analysis / Report (AS1) Weighting: 50\% Deadline: TBA Feedback and Grades due: TBA Resit Date TBA STRM043 Assignment 2 You have a choice between two cases related to the Grant textbook and available in the e-book. You must choose ONE and do a written individual case analysis which addresses the questions detailed below relating to your chosen case: Case A: HAIER GROUP - Internationalization Strategy 1. What are the main features of Haiers internationalization strategy since early 1990s and how does it differ from the pattern of international development typical of Western enterprises? (30\%) 2. How successful has Haiers internationalization strategy been and why? (30\%) 3. What are the principal features of Haiers management system? In what ways do Haiers principles and methods of management differ from those deployed by Western companies? What lessons might be drawn by a) other Chinese companies and b) by Western enterprises? (40\%) Case B: WL GORE & ASSOCIATES - Rethinking Management 1. What are the distinctive features of WL Gores organization and management and to what extent do they represent a consistent management approach based upon identifiable principles? (40\%) 2. What are the advantages and disadvantages of WL Gores approach to organization and management? (30\%) 3. To what extent is the WL Gore approach to organization and management transferable to other companies? And if it is, to what types of companies & why? (30\%) Word Count: 3,000 words, + or - 10\% Recommendations 1. You may work in study groups to discuss your analysis of the chosen case study, but must submit an individual written submission 2. In support of your analysis you can/should draw material and references from all modules on your MBA, especially organization behavior & HR. 3. 3. You may wish to reflect on your own aspirations in terms of a management style you would like to work under and/or a management style that you would adopt if and when you become a leader or business owner. 4. Key to success will be to think, focus and write strategically. Dont get lost in detail Explain the case material using core strategy and management concepts and frameworks to aid rapid analysis then add value through your own comment and opinion as you discuss the questions. 5. Make sure to read the relevant chapters in Grants textbook, as well as draw on other relevant material, from journal and practitioner articles as well as the quality press, as appropriate. Assessment Submission To submit your work, please go to the ‘Submit your work’ area of the Module NILE site. It is important that you submit your work to the correct module NILE site, and that your work is submitted on time. Assessment Guidance You will be expected to read the case several times to make sure you understand the context, grasp the detail and then review the key elements using the key strategy models to go through the strategy process, drawing on evidence from the case to justify your views. You should read the module material for the first half of the module, and the related chapters in the core module text / e-book – Grant’s ‘Contemporary Strategy Analysis’ 9th edition. You can carry out further research on your chosen company, however you must only use material drawn from credible sources such as: academic articles and texts; quality newspaper and business periodicals, e.g., the FT, The Economist and the official company website. You should not use unreliable sources such as non-reviewed websites, e.g., Wikipedia. Academic Practice This is an individual assignment. The University of Northampton policy will apply in all cases of copying, plagiarism or any other methods by which students have obtained (or attempted to obtain) an unfair advantage. Support and guidance on assessments and academic integrity can be found from the following resources • SkillsHub: http://skillshub.northampton.ac.uk • CfAP: http://skillshub.northampton.ac.uk/centre-for-achievement-and- performance-cfap/ Learning outcomes The learning outcomes being addressed through this assignment are: Knowledge and Understanding c) Recognise, consider and address macro-economic trends in a changing world and their impact on business whilst evaluating competitive, organisational and ethical values. Subject Specific Skills e) Develop appropriate policies and strategies within a changing environment for a variety of organisations, to meet stakeholder interests. Key Skills f) Develop and demonstrate key communication and time management skills. h) Demonstrate critical thinking and creativity: engage the creative processes in self and others; organise thoughts, analyse, synthesise and critically appraise alternative strategies and choices.