UNIVERSAL FOOD PRODUCTS COMPANY
Mr. Singh, President of Universal Food Products Company, was tired of being the only one in his company actually responsible for profits. While he had good vice-presidents in charge of finance, sales, advertising, manufacturing, purchasing and product research, he realized he could not hold anyone of them responsible for company\\\'s profits, as much as he would like to. He often found it difficult even to hold them responsible for the contribution in their various areas to company profits. The sales vice president, for example, had rather reasonably
complained that he could not be fully responsible for sales when the advertising was ineffective, when the products customer stores wanted were not readily available from manufacturing or when he did not have the new products he needed to meet the competition. Likewise, the manufacturing vice president had some justification when he made the point that he could not hold the costs down and still be able to produce short runs so as to fill orders in short notices; moreover, financial controls would not allow the company to carry a large inventory of everything. Singh had considered breaking down his company into six or seven segments setting up product divisions with manager over each with profit responsibility. But he found that this would not be feasible or economical since many of the company’s branded food products were produced on the same factory equipment and used the same raw materials and sales person calling on a store or super market could handle a number of related products far more economically than one or a few related.
Consequently, Singh came to the conclusion that the best thing for him to do was to set up six managers reporting to a product-marketing manager. Each product manager would b given responsibility for one or few products and would oversee for each product, all aspects of product research, manufacturing, advertising and sales, thereby becoming the person responsible for the performance and profits of the products. Singh realized that he could not give these product managers actual line of authority over the various operating
departments of the company since that would cause each vice president and his department to report to six product managers and the product marketing manager as well as the president. He was concerned with this problem, but he knew that some of the most successful larger companies in the world had used the product manager system. Moreover, one of his friends in a university faculty had told him that he must expect some lack of clarity and some confusion in the organization and that this result might not be bad since it forced people to work together as teams. Singh resolved to put in place the product manager system as outlined above and hoped for the best. But he wondered how he could avoid the problem of confusion in reporting relationships.

1. What factors would you take into consideration while designing a structure for the company? 

2. What exactly would you do to avoid any confusion in this organization?

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1 See report start any organisation there is a design of structure of any company its very important design of structure means what they are major things included when going to start any company 1Stra... View the full answer