Texas Instruments 13.4 Essay

3450 Words Apr 4th, 2013 14 Pages
1. Summarize the major features of Texas Instruments’ management systems. To what extent, and how, are these system mutually reinforcing?
In 1960, Texas Instruments’ (TI) revenue reached $232 million, which was $32 million over company’s president Pat Haggerty’s announced goal of $200 million. However, the industry was facing a recession at the time, and Patrick Haggerty knew that TI needed to develop a system that would help with innovation and growth of the company. In 1962, Duddy Harris was assigned to find such system, which resulted in development of the OST System: Objectives, Strategies and Tactics.
Pat Haggert believed that Texas Instruments must be consumer product centered. Under his leadership TI has organized itself into six
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Finally, at lower level Tactical Action Programs (TAPs) are created to execute these strategies.
This approach allows TI to tap into resources and personnel throughout its organization to tackle strategic initiatives and be flexible with its resources. To avoid conflict the company funds OST programs separately from their normal operating expenses using “decision package ranking”. Corporate Development Committee and People and Asset Effectiveness Committee evaluate, rank each OST initiative, and identify programs that will are aligned with company objective and have the most potential to contribute to the growth of company. OST expenses for strategic activities are evaluated separately from normal operating activities; and reported on separate lines on TI’s income statement.
Texas Instruments recognizes that change and innovation is the key to company’s survival and growth as a technology company. Since TI has many divisions and business units, there can be multiple approaches to effectively manage the organization. TI’s management system enables the company to organize its resources and personnel across divisions and PCCs as individual tools in a tool box. Projects and ideas are evaluated by committees, which are then implemented using whatever tools are necessary among different divisions or business units. If Texas Instruments eliminates or reduces the number of

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