How should the company be organized to handle the new foreign production facilities? How can Eleconnect reduce the time needed to bring new designed to market? MINICASE ELECONNECT, INC.-MUST IT REORGANIZE? Eleconnect, Inc. manufactures specialized electronic and of them, which could dramatically affect the potential for electrical connectors used on such diverse products as com- exporting to these markets. Having a small international puters, home appliances, telecommunications, mining equip- division with some South American expertise responsible ment, and the airbag and antiskid systems of automobiles. for monitoring these markets would help the firm avoid The company has been in business for more than 50 years. being surprised by a competitor's move. The accompanying table provides a summary of the impor After the Brazilian Eleconnect plant was in production, tant financial information for the last five years. more firms in that nation were willing to do business with the For some time, Eleconnect has been exporting to South company than when it had served the market through America, where its major markets are Brazil, Argentina, exports. In fact, the major portion of the 2018 sales increase Chile, Colombia, and Peru. When its foreign sales were was due to improved sales to Brazil. However, the new cus- confined to exports, the company functioned well with an tomers also brought the company into a new, higher level of export department whose manager reported to the competition than it had known before. Other Brazilian com- company's marketing manager. In 2017, however, another petitors were bringing out new products at a considerably U.S. firm tried to enter the Brazilian market as that country faster rate than Eleconnect. The company's president won- began to emerge from an economic recession, and there dered if horizontal linkages across functions, such as the link- were rumors that a Brazilian firm from a related industry ages automakers have used to reduce their design time, was searching for a licensor in the United States to supply might help his firm. Also, on his trips to Brazil, the marketing it with manufacturing technology. As a result, Eleconnect people told him things about the market and the competitors decided to set up its first foreign plant in Brazil. When that were not being sent to the Eleconnect home office. did, Eleconnect hired financial and marketing people with It was obvious to the president that overseas production experience in South America and established an interna and growth in overseas sales demanded a reorganization of tional division at headquarters to oversee the Brazilian the firm. Even though the company had only one plant over operation. The company's president felt that the situation seas, in Brazil, the president was confident that other plants would be repeated in Chile, Colombia, and perhaps other would soon be needed. How should the company be orga nations. These were all good export markets at the time, nized to handle the new foreign production facilities? How ut it was reasonable to suppose that some competitor can Eleconnect reduce the time needed to bring ould soon set up manufacturing facilities in one or more designs to market? Eleconnect Five-Year Financial Highlight Summary