Organization Structure and Work of Detroit Electric Case Study

Organization Structure and Work of Detroit Electric - Case Study Example Detroit Electric Company invests in outlining what work it requires to be done and then outsources the services of other companies. It does not do any design or manufacturing. The company maintains that this kind of organizational structure helps it escape capital expenses which may be too huge for it to afford at this point in time, bearing in mind that it is still at startup level. However, there is the indication that this company may slowly stop outsourcing its operations as time goes by and as their revenues continue to build on. This is due to the fact that they attribute their outsourcing arrangement to ‘avoiding capital costs which could be fatal to its start-up’ (p. 512). The reason why Detroit Electric chose to use this structure is to capitalize on the economic advantage that is brought by a division of work into highly specialized or precise jobs. The company realized that there was already the presence of specialized vehicle manufacturing companies such as Proton Holdings where manufacturing resources could be outsourced to. Proton Holdings was chosen to do the manufacturing activities of Detroit Electric because it had a modern production facility was committed to research and development, was cost-efficient, stable, and had a highly qualified labor force. Detroit Electric Company is on pace to present its electric vehicles to the market only three years after its inception. On the other hand, Ford will have taken forty years to produce a viable electric car by 2011. The pace of development in these two companies is affected by the organizational structures the two companies have deployed in their organizations. The organizational structure defines the manner in which the human resource is organized and their reporting arrangements.