Organizational Behavior Analysis: Dynatronics Corporation

Company Overview

Dynatronics Corporation (formerly Dynatronics Laser Corporation) was founded in 1979 with the initial intent of developing laser technology for use in medical procedures. Unable to acquire the necessary FDA approval required to market the technology, the company turned to other areas within the medical rehabilitation market. Seeing an opening for ultrasound electrotherapy technology, the company soon found a distribution channel that could support the new product offerings. Subsequent years led to the development of additional products used to treat chronic pain, test physical ability with computer software, and provide other forms of therapy. The company also ventured into the aesthetic market, patenting and distributing microdermabrasion technology for use by both aestheticians and plastic surgeons.

Dynatronics has made several acquisitions over the years with mixed results. The purchase of a rehabilitation manufacturing plant in Columbia, South Carolina proved to be a drain on both management skills and financial resources. Other acquisitions include the purchase of RME in College Station, Tennessee, which provided a reliable stream of income and a wealth of existing and new customers. Over the years, Dynatronics Corporation has become well-known in the physical rehabilitation market, manufacturing and shipping more than $16 million per year in rehabilitation and aesthetic equipment and supplies.

Although Dynatronics is a public company, it is owned primarily by family and friends of the Chairman of the Board, Kelvyn H. Cullimore, Sr. His son, Kelvyn H. Cullimore, Jr., serves as President and CEO. Additional company officers include Larry K. Beardall, Executive Vice President of Sales and Marketing; Ronald J. Hatch, Senior Vice President of Operations; and Robert J. Cardon, Corporate Secretary.

Component Analysis

The following section examines key organizational behavior components within Dynatronics, identifying current practices and offering recommendations for improvement in each area.

Work Groups, Teams, and Performance

Productivity within individual work groups is difficult to improve given the high turnover in various positions throughout the company. As a small company with fewer than 500 employees, work groups frequently consist of only two or three people. The largest work groups are found in manufacturing, sewing, and customer service. Many of these jobs are repetitive and unpleasant, causing significant turnover as a natural consequence of the work itself. Turnover is further compounded by other organizational problems. Because the company is small and relies on nepotism as its primary system for hiring and promotions, there is little incentive for employees to work harder and increase overall productivity.

Recommendation: Dynatronics could limit turnover by creating a reward structure tied to tenure. This would reduce costs associated with retraining and minimize the production errors that naturally occur at the beginning of new employees' learning curves. The reward system could range from simple cash bonuses to more complex arrangements that give tenured employees additional opportunities to develop skills useful for advancement — though the latter would require additional structural changes.

Dynatronics is not a promotion-seeking company, nor does it actively market its own name, since it is a manufacturer rather than a direct retailer for most of its products. The influences on the company's public image are mixed: some products are designed to help people recover from injury, while others appeal to aesthetic vanity. Notably, the company provided complimentary treatments with its electrotherapy and ultrasound equipment to Olympic athletes at the Olympic Village in Salt Lake City during the 2002 Winter Games.

Recommendation: Depending on how the company views its obligation to the broader social structure, it could take a number of meaningful steps. For example, Dynatronics could donate devices to hospitals in low-income areas, helping to reduce the treatment costs associated with rehabilitation for underserved populations.

As President and CEO, Cullimore, Jr. is a charismatic and highly intelligent leader. His detailed knowledge of the organization's operations gives him unique insight into the business. However, his tendency to hire friends with great frequency represents a serious weakness of which he may be wholly unaware. Nevertheless, the company has demonstrated potential with him at the helm.

Recommendation: Cullimore, Jr. should take deliberate steps to ensure that hiring decisions are based solely on merit. Eliminating the hiring of family members by policy would be difficult given that his father is Chairman of the Board, but meaningful improvements could still be made — for example, by establishing interview panels that include various managers who have no personal connection to the applicants.

Employees who have remained with the organization for any significant length of time tend to exhibit an ability to refrain from raising controversial issues. As a rule, they also possess well-developed communication and interpersonal skills. This dynamic helps the company maintain the status quo but discourages innovation.

Recommendation: Proposing the kind of cultural change that would allow employees to voice their opinions more freely is inherently difficult, but it could be achieved over time. Allowing employees to submit ideas anonymously, and having management engage with each idea honestly, would be a good starting point. Management could then encourage further participation by sharing valued ideas at general meetings with the broader employee population.

The company is widely perceived as producing high-quality products and standing behind them. This reputation is a function of its willingness to listen to individual retailers and to honor the lengthy warranties that accompany so many of its manufactured products.

Recommendation: Dynatronics has a poor reputation for handling credits and returns in a timely manner. Improved technology and established procedures would go a long way toward replacing the paper-based system currently in use.

With limited opportunities for upward mobility and modest company income, there appear to be few intrinsic motivators at Dynatronics. Individual team leaders must therefore rely on charisma and leadership skills to inspire their work groups. Without those skills, the only motivating force remaining is the threat of job loss.

Recommendation: Allocating budget resources toward employee training and development is an ideal motivator. Employees who demonstrate success in a particular area could be rewarded with the opportunity to attend additional training courses for other positions within the organization.

The teams responsible for assembling and repairing the complex circuitry and mechanics of Dynatronics devices are comprised of engineers and electronics technicians. These teams produce sophisticated, high-quality equipment used in physical therapy offices around the world. Given the company's strong reputation in this area, these workers have clearly found a way to perform at a high level, though it is difficult to determine whether they are operating at full capacity or simply meeting minimum expectations.

Recommendation: Dynatronics has done a good job of creating high-performance teams in its technical areas, but the less skilled teams in customer service are not working at the same level. One reason for this gap is a lack of cohesion resulting from inadequate opportunities for team meetings and planning. The company should create a call schedule that allows for regular team meetings and proper planning within the customer service area.

Because the company is small, few roles on any given team can afford to be ineffective. In groups as large as ten, the responsibility of each member is closely monitored by co-workers, which helps prevent individual underperformance. On the other hand, there is a risk of groupthink and the development of teams that have reached a tacit agreement to perform at a fixed level and no more.

Recommendation: There are no established metrics for certain groups within the company that drill down to individual performance. As a result, assessing individual contribution is difficult. Dynatronics should develop specific performance metrics for each job in the organization. As noted in the literature on group collaboration technology, "improvements in computer and communications technologies have made possible a new class of application systems intended to support group work. The objective of these systems is to support meetings, coordination, project management, co-authoring, decision making, and collaboration on a variety of activities" (Olson & Symposium on Technological Support for Work Group Collaboration, University Graduate School of Business, 1989, p. 167). Dynatronics should draw on these resources to establish measurable individual performance standards.

As a company that ships internationally and manufactures medical devices, Dynatronics maintains an elaborate quality and problem-reporting system. ISO 9000 procedures are used to ensure consistency in work and in the development process. Central databases track problems so that solutions can be identified and implemented. The level of coordination required to maintain FDA compliance indicates that teamwork is functioning and in relatively good order.

Recommendation: One area of the quality management process that warrants closer examination is the training and development of internal auditors. Internal auditors are currently poorly trained and frequently fail to provide the level of preparation the company needs to ensure that external audits proceed smoothly. Additional training should be provided so that internal audit work more closely mirrors the standards applied by external auditors.

Very few decisions made within this small company are reached by consensus. Because the range of options in many situations is narrow, choices are often dictated by fixed constraints, making decisions more programmed than deliberative. Team discussions are rarely part of the process.

Recommendation: The value of multiple inputs is not currently accepted by management, so a significant shift in this dynamic will need to take place. Senior management should evaluate how employee input is currently handled and critically analyze the benefits that could be gained from sharing some decision-making authority.