CASE STUDY ON FUNDAMENTALS OF ORGANISATIONAL STRUCTURE GloAds is a middle-sized company that provided two key services to its clients: tailored package for the content of an advertising campaign (for example, slogans and layouts) and premium package for media (such as radio, TV, newspapers, billboards, and Internet). Additional services included aid in marketing and distribution of products and marketing research to test advertising effectiveness. Its activities were organized in a traditional manner. The organization chart is shown in Exhibit 3.22 (see page 133 of textbook). Each department included similar functions. Each client account was coordinated by an account executive who acted as a liaison between the client and the various specialists on the professional staff of the operations and marketing divisions. The number of direct communications and contacts between clients and Glo-Ads specialists, clients and account executives, and Glo-Ads specialists and account executives is indicated in Exhibit 2.33 (see page 134 of textbook). These sociometric data were gathered by a consultant who conducted a study of the patterns of formal and informal communication. Each intersecting cell of Glo-Ads personnel and the clients contains an index of the direct contacts between them. Although an account executive was designated to be the liaison between the client and specialists within the company, communications frequently occurred directly between clients and specialists and bypassed the account executive. These direct contacts involved a wide range of interactions, such as meetings, telephone calls, e-mail messages, and so on. A large number of direct communications occurred between company specialists and their counterparts in the client organization. For example, an art specialist working as one member of a team on a particular client account would often be contacted directly by the client’s in-house art specialist, and company research personnel had direct communication with research people of the client firm. Also, some of the unstructured contacts often led to more formal meetings with clients in which company personnel made presentations, interpreted and defended company policy, and committed the company to certain courses of action. Both hierarchical and professional systems operated within the departments of the operations and marketing divisions. Each department was organized hierarchically with a director, an assistant director, and several levels of authority. Professional communications were widespread and mainly concerned with sharing knowledge and techniques, technical evaluation of work, and development of professional interests. Control in each department was exercised mainly through control of promotions and supervision of work done by subordinates. Many account executives, however, felt the need for more influence, and one commented: Creativity and art. That’s all I hear around here. It is hard as hell to effectively manage six or seven hotshots who claim they have to do their own thing. Each of them tries to sell his or her idea to the client, and most of the time I don’t know what has happened until a week later. If I were a despot, I would make all of them check with me first to get approval. Things would sure change around here. The need for reorganization was made more acute by changes in the environment. Within a short period of time, there was a rapid turnover in the major accounts handled by the company. It was typical for advertising agencies to gain or lose clients quickly, often with no advance Page 2 of 9 warning as consumer behavior and lifestyle changes emerged and product innovations occurred. A company reorganization was one solution proposed by top management to increase flexibility in this unpredictable environment. The reorganization would be aimed at reducing the company’s response time to environmental changes and at increasing cooperation and communication among specialists from different departments. The top managers are not sure what type of reorganization is appropriate. They would like your help analyzing their context and current structure and welcome your advice on proposing a new structure. REQUIRED Attempt all the following questions. i. Identify the three key problems associated with the Glo-Ads firm’s faulty organizational structure. (3 MARKS) ii. Discuss appropriate solutions to the three key problems identified in question one (1) above. (12 MARKS) iii. Analyze Glo-Ads with respect to the five contextual variables. How would you describe the environment, goals, culture, size, and technology for Glo-Ads? (8 MARKS) iv. Design a new organization structure that takes into consideration the contextual variables in the case and the information flows.