Question: Deciding on an Organizational Structure

Break up into groups of three to five people and discuss the following scenario. You are a group of managers of a major soft drink company that is going head-to-head with Coca-Cola to increase market share. Your business model is based on increasing your product range to offer a soft drink in every segment of the market to attract customers. Currently you have a functional structure. What you are trying to work out now is how best to implement your business model to launch your new products. Should you move to a more complex kind of product structure and, if so, which one? Alternatively, should you establish new venture divisions and spin off each kind of new soft drink into its own company so that it can focus its resources on its market niche? Thinking strategically, debate the pros and cons of the possible organizational structures and decide which structure you will implement.

Article File 12

Find an example of a company that competes in one industry and has recently changed the way it implements its business model and strategies. What changes did it make? Why did it make these changes? What effect did these changes have on the behavior of people and functions?

Strategic Management Project: Module 12

This module asks you to identify how your company implements its business model and strategy. For this part of your project, you need to obtain information about your company's structure, control systems, and culture. This information may be hard to obtain unless you can interview managers directly. But you can make many inferences about the company's structure from the nature of its activities, and if you write to the company, it may provide you with an organizational chart and other information. Also, published information, such as compensation for top management, is available in the company's annual reports or 10-K reports. If your company is well known, magazines such as Fortune and Business Week frequently report on corporate culture or control issues. Nevertheless, you may be forced to make some bold assumptions to complete this part of the project.

1. How large is the company as measured by the number of its employees? How many levels in the hierarchy does it have from the top to the bottom? Based on these two measures and any other information you may have, would you say your company operates with a relatively tall or fl at structure? Does your company have a centralized or decentralized approach to decision making?

2. What changes (if any) would you make to the way the company allocates authority and responsibility? 3. Draw an organizational chart showing the main way in which your company groups its activities. Based on this chart, decide what kind of structure (functional, product, or divisional) your company is using.

4. Why did your company choose this structure? In what ways is it appropriate for its business model? In what ways is it not?

5. What kind of integration or integration mechanisms does your company use?

6. What are the main kinds of control systems your company is using? What kinds of behaviors is the organization trying to

(a) shape and

(b) motivate through the use of these control systems?

7. What role does the top management team play in creating the culture of your organization? Can you identify the characteristic norms and values that describe the way people behave in your organization? How does the design of the organization's structure affect its culture?

8. What are the sources of your company's distinctive competencies? Which functions are most important to it? How does your company design its structure, control, and culture to enhance its (a) efficiency, (b) quality, (c) innovativeness, and (d) responsiveness to customers?

9. How does it design its structure and control systems to strengthen its business model? For example, what steps does it take to further cross-functional integration? Does it have a functional, product, or matrix structure?

10. How does your company's culture support its business model? Can you determine any ways in which its top management team influences its culture?

11. Based on this analysis, would you say your company is coordinating and motivating its people and subunits effectively? Why or why not? What changes (if any) would you make to the way your company's structure operates? What use could it make of restructuring or reengineering?