ISBM MBA ISBM CASE STUDY SOLUTIONS – What changes do you recommend to be made in the company organization structure
ISBM MBA ISBM CASE STUDY SOLUTIONS – What changes do you recommend to be made in the company organization structure
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Principles and Practice of Management
Case (20 Marks)
The modern Corporation Limited produces and distributes packaged food products, such as cereals, spices, puddings, jellies, crackers, salad dressings, etc. The company sells nationwide and conducts a very large national advertising campaign. It has 75 plants located throughout the country and markets 65 different products, each under its own trademark. These are all food products, but are not otherwise closely related. They vary from long-margin specialities with comparatively small volume to larger volume items with similar profit margins. Different raw materials and commodities are used in their processing. All products, however, have the common factor of being sold throughout retail grocery stores. Gross sales are Rs. 2,500 lakhs and total assets are Rs. 1,250 lakhs. Management is centralized. The chairman of the board, the President, and four Vice-Presidents with responsibility for sales, production, purchasing, and law, make up the executive top of the company and operate as a committee on all general policy matters.
Sales, advertising, and sales promotion are all under the jurisdiction of the sales Vice-President. All plant operations, as well as research and engineering, report to the production Vice-President. Purchasing is the responsibility of its Vice-President, Who also governs traffic. Public relations, law and corporate functions are under the general counsel. Financial responsibilities are handled by the president, and employee relations are covered by each Vice-President in his own area of responsibility. Each plant is operated by a superintendent whose authority is over wages, maintenance cost, output, quality, hiring, inspection and the other normal plant operation responsibilities. Superintendents report to 8 regional production managers who are responsible to the production Vice- President.
The volume of production in each plant is scheduled by the production control group reporting to the operating Vice- President. Final Schedules are set after consulting the sales Vice-president. Opportunities for increasing the line of products and expanding the business are being lost because of lack of executive’s time to study them to manage new products. In any business where specialties sold under trademark brands are the major business of a company, it is necessary for that company to continually bring out new products and to study old ones to determine, the point of no return with regard to promotion and advertising expenses. The Modern Corporation management feels that, in addition to lost opportunities for sound expansion, profit opportunities in present products are not being fully recognized. The business may have grown too big for the form of management.
Answer the following question.
Q1. How have changed conditions in this company affected the appropriateness of its organization structures?
Q2. What changes do you recommend to be made in the company organization structure?
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