Please read the below case study carefully and answer the questions given at the end of the case study.

$$ Your responses should be based on critical analysis of the case that should reflect the application of the concepts we have studied in the class. This case provides you situations where you have to make important decisions to resolve the problems.

$$ There is no right and wrong answer to these questions. Any proposed solution will be consider right if you justify it with the help of the concepts discussed in the class.

Case

MAGINIO is an Italian company producing machinery parts for production in Europe and the Middle East. The company was founded in $2000$ by $45-$year$-$old Antonietta who started the company in her home. As a result of its immediate success, Antonietta needed to recruit three employees shortly after setting up the company.

The company$$s immediate success was partly due to the fact that IMAGINIO was able to customize all of its machinery parts for every single customer. In doing so$,$ the company had a differentiation strategy. Despite the company$$s early success, Antonietta suddenly faced problems in $2005,$ which were due to the very fact that her company was successful. She soon realized that she did not have the time to manage the company herself, and she was more interested in being in touch with customers and solving production problems. Her lack of attention to the administrative part of the business had thus become a problem.

A friend helped Antonietta analyze the situation, advising that she had been blind to the problems arising, done nothing about them and just hoped that they would disappear on their own. Antonietta$$s friend helped her to transform the company structure into a functional structure, and soon the company was back on track performing successfully and bringing in good revenues. She hired a professional manager $($CEO$)$ who made some departments functional, reduced the numbers of parts produced, and subsequently made some employees into functional managers.

The new CEO was a good choice right from the start, spurring a new period of success which lasted for another ten years. However, in $2016,$ IMAGINIO started facing new problems; and this time, the crisis was more severe than before.

The problems were quite complex:

$$ a lack of innovation: some new competitors were more innovative.

$$ the functional managers$$ lack of autonomy.

$$ severe structural problems: the functional structure was not ideal for producing and selling machinery parts for the more differentiated customers.

$$ The company has also moved into different markets in the EMEA area, while the current differentiation in products was not good.

Antonietta called her friend once again. After analyzing the situation, he told Antonietta that she had made some of the same mistakes again. According to her friend and adviser, due to the growth and success of the company, Antonietta had hired many new employees, but the functional structure was not good at absorbing them. Furthermore, the larger number of employees had led to more conflicts between departments, as well as to longer communication lines. The friend also emphasized that, adding to all the above, Antonietta had made the same mistakes as before: being blind in the beginning and not doing anything about it once she realized what was going on$.$ Things took a turn for the worse when discussions with the CEO and the functional managers started revolving around who to blame.

Antonietta$$s friend suggested she develop an organization with cross$-$functional core processes, which should be managed by new employees hired into the organization. Each of the cross$-$functional leaders should be good at IMAGINIO$$s three strong areas: $(1)$ machinery parts for assembly$-$line machines; $(2)$ specialized parts for the aerospace industry; and $(3)$ parts for the electrical car industry.

While Antonietta considered her friend$$s suggestion, she wondered if she could solve the problem by hiring even more project managers. In this way, she would have specialists within all the three areas mentioned above, while also having relatively more consultants in the area where most clients place their orders.

However, her friend rejected Antonietta$$s idea and warned against over$-$bureaucratizing the structure. Instead, he shared with Antonietta one organizational secret: when the company obtains an order, one of the three cross$-$functional managers should have a meeting with the client where they discuss the client$$s system requirements. At this meeting, the manager would also be able to find out which of the client$$s employees would be capable of working on the project and helping with its implementation.

Actually, this is one of IMAGINIO$$s business secrets: to involve the client$$s employees because in this way they can keep the costs of introducing a new IT system to an absolute minimum. Furthermore, they do not need to train the client$$s employees because they are already par