Tucker Company

In 1993 the Tucker Company underwent an extensive reorganization that divided the company into three major divisions. These new divisions represented Tucker's three principal product lines. Mr. Harnett, Tucker's president, explained the basis for the new organization in a memo to the board of directors as follows:

The diversity of our products requires that we reorganize along our major product lines. Toward this end I have established three new divisions: commercial jet engines, military jet engines, and utility turbines. Each division will be headed by a new vice president who will report directly to me. I believe that this new approach will enhance our performance through the commitment of individual managers. It should also help us to identify unprofitable areas where the special attention of management may be required.

For the most part, each division will be able to operate independently. That is, each will have its own engineering, manufacturing, accounting departments, etc. In some cases, however, it will be necessary for a division to utilize the services of other divisions or departments. This is necessary because the complete servicing with individual divisional staff would result in unjustifiable additional staffing and facilities.

The old companywide laboratory was one such service department. Functionally it continued to support all of the major divisions. Administratively, however, the manager of the laboratory reported to the manager of manufacturing in the military jet engine division.

From the time the new organization was initiated until February 1999, when the laboratory manager Mr. Garfield retired, there was little evidence of interdepartmental or interdivisional conflict. His replacement, Ms. Hodge, unlike Mr. Garfield, was always eager to gain the attention of management. Many of Hodge's peers perceived her as an empire builder who was interested in her own advancement rather than the company's well-being. After about six months in the new position, Hodge became involved in several interdepartmental conflicts over work that was being conducted in her laboratory.

Historically, the engineering departments had used the laboratory as a testing facility to determine the properties of materials selected by the design engineers. Hodge felt that the laboratory should be more involved in the selection of these materials and in the design of experiments and subsequent evaluations of the experimental data. Hodge discussed this with Mr. Franklin of the engineering department of the utility turbine division. Franklin offered to consult with Hodge but stated that the final responsibility for the selection of materials was charged to his department.

In the months that followed, Hodge and Franklin had several disagreements over the implementation of the results. Franklin told Hodge that, because