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Steinway & Sons produces grand and upright pianos through a craft-based production process requiring over 12,000 handmade parts. Keeping skilled workers has been difficult as they could set up their own repair shops. Increased competition also comes from Asian piano manufacturers and electronic keyboards. The organization effectively aligns its differentiation strategy, craft-based technology, functional structure, formal measurement systems, and culture emphasizing quality to produce unique, high-end pianos and maintain organizational effectiveness. Recommendations include further formalizing strategies and increasing integration across organizational components.

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Arpita Ghosh
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201 views

ODC

Steinway & Sons produces grand and upright pianos through a craft-based production process requiring over 12,000 handmade parts. Keeping skilled workers has been difficult as they could set up their own repair shops. Increased competition also comes from Asian piano manufacturers and electronic keyboards. The organization effectively aligns its differentiation strategy, craft-based technology, functional structure, formal measurement systems, and culture emphasizing quality to produce unique, high-end pianos and maintain organizational effectiveness. Recommendations include further formalizing strategies and increasing integration across organizational components.

Uploaded by

Arpita Ghosh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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ORGANIZATIONAL DIAGONISIS OF STEINWAY AND SONS

By; ARPITA GHOSH (Roll-9) TARUSH KHANDELWAL

INTRODUCTION TO THE CASE


Steinway & sons offers several different pianos, including two brands(Steinway & less expensive Boston brand) & both upright & grand piano models. The company hand crafts its grand pianos in New York & Germany,& sells them through more than 200 independent dealers. Creating Steinway concert grand piano requires more than 12000 mostly handcrafted parts.

There are three major steps in the production processi. Wood-drying operations convert moisture-rich lumber into useable raw material through air drying & computer-controlled kilns. ii. Parts-making operations involves bending of the piano rim that are formed of multiple layers of specially selected maple that are manually forced into a unified shape held in presses for several hr. Then seasoned for 10 weeks before being joined to other wooden parts. iii. Piano-making operation include bellying, finishing & tone regulating. The bellying process involves the careful fitting of the soundboard ,iron piano plate & rim to each other.

PROBLEMS:
Keeping workers has proved extremely difficult Many of the workers could easily set up their own shop to repair or rebuild older Steinways pianos. Several Asian companies such as Yamaha, Kawai , Young Chang and Samick emerging as important competitors. Increased electronic keyboard sales.

INPUTS:

General

Environment of the

company Industry Structure

DESIGN COMPONENTS:

Strategy Technology Structure Measurement System Human Resource System

OUTPUT:
Organizational Effectiveness

INPUTS
GENERAL ENVIRONMENT OF THE COMPANY:

Steinways external environment is only moderately uncertain and not very complex. The organization operates on a global basis.
Use of the classic methods of production . They are very picky while choosing the material for the pianos therefore

COMPANYS INDUSTRY STRUCTURE

Steinways industry is moderately competitive and profit pressure can be mapped by looking at the five key forces.
The threat of entry is fairly low The threat of substitute product is fairly low The bargaining power of the suppliers is high Bargaining power of buyers varies with segment Rivalry among firms is severe

DESIGN COMPONENTS
STRATEGY: Primary strategy is a sophisticated niche and differentiation market. Attempt to meet their financial and other objectives by offering a unique and high quality product to sophisticated artists. The dealer network is an important part of Steinways strategy because of its role in the Concert Bank program.

TECHNOLOGY: Steinways core technology is highly uncertain and moderately interdependent. The manufacturing process is craft based and dependent on the nature of the material. It is moderately interdependent because the major steps in the process are not linked in time. Making the action sets is independent of the bellying processes for example.

STRUCTURE: The corporate organization is division while the piano subsidiary appears to have functional structure. The key functions are manufacturing, distribution and sales.

MEASUREMENT SYSTEM:
Formal measurement systems within the production process are clearly present. 100% inspection (as opposed to statistical sampling)costs time and manpower is seen as critical to quality. System of keeping tracks of work-in-progress, finished goods, and concert bank system inventories.

HUMAN RESOURCES SYSTEM: Human resource system is highly developed. Reward system includes both hourly and piece rate processes The organization maintains union relationships Steinways undertakes : -workers retention programs -global hiring -provides compensations & benefits -training programs

CULTURE: The dominant focus is on: -the high end segment -craft nature of the production process -important of the concert bank program -long history of family influence all point to culture of quality -craftsmanship -responsiveness

OUTPUT
ORGANIZATIONAL EFFECTIVENESS:

The first concern is between the environmental inputs and the strategic orientation. The moderate complexity and uncertainty in the general environment argue for a strategy that is flexible enough to address the few critical dependencies but formal enough to control.

The second concern is the alignment of the design component . I. They intend to differentiate its product by serving the high-end segment with unique high quality pianos but a broad product line could dilute the focus. II. There appears to be a good fit between the strategy and other design components. The differentiated strategic focus on creating sophisticated and unique product. For this purpose the flexible structure, formal inspection system and responsiveness culture of the organization suits the best

Thirdly, the technology is well aligned and support the structure. I. The production process is craft based and the functional structure promotes specialization and professionalization of skills and knowledge. II. It built loyalty into customers and ensured future demand III. Feedback from customers were taken which ensures the artist demand and emerging trends in sound IV. Due to well developed Human Resource System, the marketing and production function was facilitated

RECOMMENDATIONS:
On the basis of diagnosis of Steinway organization two possible intervention are suggested: I. Formulizing rather than changing the Steinway strategies

II. Increasing the integration and coordination of its structures, measurement systems and human resource system

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