CRITICAL THINKING EXERCISE 8-2



critical thinking exercise 8-2

Designing Departmentalization

Suppose you have just been hired as the vice president in charge of sales at Combo Enterprises, Inc. Combo manufacturers, sells, and distributes both land and water vehicles. The land vehicles are bicycles powered by a two-horsepower, two-cycle engine. Basically, you have developed a method to adapt an off-the-shelf chainsaw motor to a popular French-produced bicycle. The water vehicles use the same chainsaw motor adapted to a standard canoe, which is fitted with a special propeller and rudder.

The advantage over the existing competition is that, due to the light weight of the motor being used, the bicycles and canoes can also be used manually with very little loss of efficiency compared to non-motorized bicycles and canoes. Your market surveys have shown that a large market exists for such a product.

Combo serves both civilian and military markets for both the land and water vehicles. Presently Combo has a plant in a medium-size eastern city and one in a medium-size western city. The eastern plant handles all business east of the Mississippi River, while the western plant handles business west of the Mississippi.

1. Design what you think would be the best way to organize the sales (marketing) division of the company.

2. Design an alternative structure (using a different method of departmentalization) for your division.

critical thinking exercise 8-2 (continued)

3. WHY DO YOU PREFER ONE STRUCTURE OVER THE OTHER?

4. Design a matrix structure for this situation (if you did not use the one in question 1 or 2). What would be the pros and cons of such a structure in this situation?

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