Judy Knight founded the Neoglobe Company over 30 years ago. Although she has relied heavily on advice from other members of management, Knight has made all of the important decisions for the company. Neoglobe has been successful, experiencing steady growth in its early years and very rapid growth in recent years. During this period of rapid growth, Knight has had difficulty keeping up with the many decisions that need to be made. She feels that she is losing control of the company's progress.
Regular discussions regarding her concern have been held with George Armet, the company's executive vice-president. As a result of these discussions, Armet has studied possible alternative organizational structures that could replace the present highly centralized functional organization.
In a carefully prepared proposal, Armet recommended that the company reorganize according to its two product lines-plastic products and brass products-because their technology (both marketing skills and equipment) and marketing methods are quite different. The change can be accomplished easily because the products are manufactured in different plants. The marketing effort is also segregated along product lines within the sales function. The number of executive positions will not change, although the duties of the positions will change. There will no longer be the need for a vice-president for manufacturing or a vice-president for sales. Those positions will be replaced with the vice-president for each of the two product lines. Armet acknowledges that there may be personnel problems at the executive management level, because the current vice-presidents may not be competent to manage within the new structure.