Mergers fuel middle-management comeback

University Park, PA--Megamergers, such as the one between America's Chrysler Corp. and Germany's Daimler-Benz, help middle managers make a comeback. So reports Albert A. Vicere, professor of business administration in the Pennsylvania State University's Smeal College of Business Administration.

"All this talk about merged companies becoming even leaner and meaner has a scary ring to it," Vicere says, "but there's definitely an upside to this."

Vicere and Robert M. Fulmer, W. Brooks George professor of business administration at the College of William and Mary, co-authored a book, "Leadership By Design: How Benchmark Companies Sustain Success Through Investment in Continuous Learning," recently published by the Harvard Business School Press.

"The global economy has certainly forced companies around the world to become more competitive--and more creatively competitive," Vicere notes. "Many corporations have responded to this by restructuring themselves into what we refer to as shadow pyramids." In a shadow pyramid, companies outsource many essential but not core functions, such as bookkeeping, data processing, maintenance, and sometimes manufacturing.

"From the corporate standpoint. the union of Chrysler and Daimler-Benz is a marriage made in heaven," Vicere feels. "It will result in a shadow pyramid where the core company can develop top-notch products and services, while establishing partnerships with other companies to expand market opportunities around the world. Chrysler, for instance, specializes in design; Daimler-Benz in engineering."

A shadow pyramid is indeed flatter, leaner, and more focused, Vicere admits. "It represents only those competencies and processes in which the company excels on a worldwide basis," he adds. "All other activities are conducted through contracts, partnerships, and alliances."

Because of the shift in worker values, the issues of employee loyalty and motivation are critical within a shadow pyramid. A company of this kind, Vicere notes, requires a radically new definition of the employer-employee relationship, one more focused on open communication, personal involvement, and professional development.

How does this new organizational structure apply to design engineers? "As engineers build their knowledge and professional network they become a very critical part of a company's ability to stay on the leading edge of its core competencies," Vicere tells Design News. "This, in turn, makes them a valuable resource in the company's managerial structure."