Muhammad UmerYasin

Case Application 1
Ask Chuck

The Charles Schwab Corporation (Charles Schwab) is a San
Francisco-based financial services company. Like many companies
in that industry, Charles Schwab struggled during the economic
recession. Founded in 1971 by its namesake as a discount
brokerage, the company has now “grown up” into a full-service
traditional brokerage firm, with more than 300 offices in some 45
states and in London and Hong Kong. It still offers discount
brokerage services, but also financial research, advice, and
planning; retirement plans; investment management; and
proprietary financial products including mutual funds, mortgages,
CDs, and other banking products through its Charles Schwab Bank
unit. However, its primary business is still making stock trades for
investors who make their own financial decisions.The company
has a reputation for being conservative, which helped it avoid the
financial meltdown suffered by other investment firms. Founder
Charles R. Schwab has a black bowling ball perched on his desk.
“It’s a memento of the long-forgotten bubble of 1961, when
shares of bowling-pin companies, shoemakers, chalk
manufacturers, and lane operators were thought to be can’t-miss
plays on the limitless potential of suburbia— and turned out to be
duds.” He keeps the ball as a reminder not to “buy into hype or
take excessive risks.” Like many companies, Charles Schwab is
fanatical about customer service.

By empowering front-line employees to respond fast to customer issues and
concerns, Cheryl Pasquale, a manager at one of Schwab’s branches, is on the front
line of Schwab’s efforts to prosper in a “resource-challenged economy.” Every
workday morning, she pulls up a customer feedback report for her branch
generated by a brief survey the investment firm e-mails out daily.The report allows
her to review how well her six financial consultants handled the previous day’s
transactions. She’s able to see comments of customers who gave both high and low
marks and whether a particular transaction garnered praise or complaint. On one
particular day, she notices that several customers commented on how difficult it
was to use the branch’s in-house information kiosks. “She decides she’ll ask her
team for insights about this in their weekly meeting.” One thing that she pays
particular attention to is a “manager alert—a special notice triggered by a client who
has given Schwab a poor rating for a delay in posting a transaction to his account.”
And she’s not alone. Every day, Pasquale and the managers at all the company’s
branches receive this type of customer feedback. she’ll ask her team for insights
about this in their weekly m eating.” One thing that she pays particular attention to
is a “manager alert—a special notice triggered by a client who has given Schwab a
poor rating for a delay in posting a transaction to his account.”And she’s not alone.
Every day, Pasquale and the managers at all the company’s branches receive this
type of customer feedback.

Discussion Questions:
1. Describe and evaluate what Charles Schwab
is doing.

2. How might the company’s culture of not
buying into hype and not taking excessive risks
affect its organizational structural design?

3. What structural implications—good and bad—
might Schwab’s intense focus on customer
feedback have?

4. Do you think this arrangement would work
for other types of organizations?Why or
why not?

2:

Admit it. Sometimes the projects you’re working on (school, work,
or both) can get pretty boring and monotonous. Wouldn’t it be
great to have a magic button you could push to get someone else
to do that boring, time-consuming stuff? At Pfizer, that “magic
button” is a reality for a large number of employees.44 As a global
pharmaceutical company, Pfizer is continually looking for ways to
help employees be more efficient and effective. The company’s
senior director of organizational effectiveness found that the
“Harvard MBA staff we hired to develop strategies and innovate
were instead Googling and making PowerPoint.” Indeed, internal
studies conducted to find out just how much time its valuable
talent was spending on menial tasks was startling. The average
Pfizer employee was spending 20 percent to 40 percent of his or
her time on support work (creating documents, typing notes,
doing research, manipulating data, scheduling meetings) and only
60 percent to 80 percent on knowledge work (strategy, innovation,
networking, collaborating, critical thinking). And the problem
wasn’t just at lower levels. Even the highest-level employees were
affected.Take, for instance, David Cain, an executive director for
global engineering. He enjoys his job—assessing environmental
real estate risks, managing facilities, and controlling a
multimillion-dollar budget

But he didn’t so much enjoy having to go through spreadsheets and put together
PowerPoint. Now, however, with Pfizer’s “magic button, "those tasks are passed off to
individuals outside the organization. Just what is this “magic button?” Originally called
the Office of the Future (OOF), the renamed PfizerWorks allows employees to shift
tedious and time-consuming tasks with the click of a single button on their computer
desktop.They describe what they need on an online form, which is then sent to one of
two Indian service outsourcing firms. When a request is received, a team member in India
calls the Pfizer employee to clarify what’s needed and by when.The team member then e-
mails back a cost specification for the requested work. If the Pfizer employee decides to
proceed, the costs involved are charged to the employee’s department. About this unique
arrangement, Cain said that he relishes working with what he prefers to call his “personal
consulting organization.”The number 66,500 illustrates just how beneficial PfizerWorks
has been for the company.That’s the number of work hours estimated to have been saved
by employees who’ve used PfizerWorks. What about Joe Cain’s experiences?When he
gave the Indian team a complex project researching strategic actions that worked when
consolidating company facilities, the team put the report together in a month, something
that would have taken him six months to do alone. He says, “Pfizer pays me not to work
tactically, but to work strategically.”

Discussion Questions:
1. Describe and evaluate what Pfizer is doing
with its PfizerWorks.

2. What structural
implications—good
and bad—does this
approach have?
(Think in terms of
the six
organizational
design elements.)

3. Do you think this arrangement would work for
other types of organizations?Why or why
not?What types of organizations might it also work
for?

4. What role do you think organizational
structure plays in an organization’s efficiency
and effectiveness? Explain.