One of the most difficult problems facing management is that of how to minimize the transition time between changeover from a purely traditional organizational form to a project organizational form. Managing the changeover is difficult in that management must consistently “provide individual training on teamwork and group problem solving; also, provide the project and functional groups with assignments to help build teamwork.”31 TRW Systems Group tried to make almost an instantaneous conversion from a traditional to a matrix organizational form. Managing the conversion was accomplished through T-groups and special study sessions. Describe the problems associated with new organizational form conversion. Which project form should be easiest to adapt to? State how long a period you might need for conversion from a traditional structure to a product structure, matrix structure, and task force structure.

William J. Bryan is the general manager of an electrical equipment plant. He

must decide whether to install a number of assembly robots in his plant. This

investment would be risky because both management and the workforce have

no real experience with the introduction or operation of such robots. His

indifference curve between expected rate of return and risk is as shown in the

figure. a. If the riskiness (s) of this investment equals 3, what risk premium does

he require? b. What is the riskless rate of return? c. What is the risk-adjusted discount rate?

d. In calculating the present value of future profit from this investment, what interest rate should be used?