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The Anderson Corporation was started in 1962 as a small consumer products company.During the first 20 years the company’s R&D staff developed a series of new products thatproved to be very popular in...

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The Anderson Corporation was started in 1962 as a small consumer products company.During the first 20 years the company’s R&D staff developed a series of new products thatproved to be very popular in the marketplace. Things went so well that the company had toadd a second production shift just to keep up with the demand. During this time period thefirm expanded its plant on three separate occasions. During an interview with a nationalmagazine, the firm’s founder, Paul Anderson, said, “We don’t sell our products. We allocatethem.” This comment was in reference to the fact that the firm had only 24 salespeople andwas able to garner annual revenues in excess of $62 million. Three years ago Andersonsuffered its first financial setback. The company had a net operating loss of $1.2 million.Two years ago the loss was $2.8 million, and last year it was $4.7 million. The accountantestimates that this year the firm will lose approximately $10 million. Alarmed by thisinformation, Citizen’s Bank, the company’s largest creditor, insisted that the firm make somechanges and start turning things around. In response to this request, Paul Anderson agreed tostep aside. The board of directors replaced him with Mary Hartmann, head of the marketingdivision of one of the country’s largest consumer products firms. After making an analysis ofthe situation, Mary has come to the conclusion that there are a number of changes that mustbe made if the firm is to be turned around. The three most important are as follows: 1. More attention must be given to the marketing side of the business. The most vital factorfor success in the sale of the consumer goods produced by Anderson is an effective salesforce.2. There must be an improvement in product quality. Currently, 2 percent of Anderson’soutput is defective, as against 0.5 percent for the average firm in the industry. In the pastthe demand for Anderson’s output was so great that quality control was not an importantfactor. Now it is proving to be a very costly area.3. There must be a reduction in the number of people in the operation. Anderson can get bywith two-thirds of its current production personnel and only half of its administrativestaff.Mary has not shared these ideas with the board of directors, but she intends to do so. For themoment she is considering the steps that will have to be taken in making these changes and theeffect that all of this might have on the employees and the overall operation.1. What is wrong with the old organizational culture? What needs to be done to change it?2. Why might it be difficult for Mary to change the existing culture?3. What specific steps does Mary need to take in changing the culture? Identify and describeat least two.1. ___________________________________
Answered Same Day Dec 24, 2021

Solution

Robert answered on Dec 24 2021
122 Votes
Ideal Flows Approach
For too long, structure has been viewed as something separate from strategy. Revising structures are often seen as ways to improve efficiency, promote teamwork, create synergy or reduce cost. Yes, restructuring can do all that and more. What has been less obvious is that structure and strategy are dependent on each other. You can create the most efficient, team oriented, synergistic structure possible and still end up in the same place you are or worse.
The Connection between Strategy and Structure
Structure is not simply an organization chart. Structure is all the people, positions, procedures, processes, culture, technology and related elements that comprise the organization. It defines how all the pieces, parts and processes work together (or don’t in some cases). This structure must be totally aligned with strategy for the organization to achieve its mission and goals. Structure supports strategy.
If an organization changes its strategy, it must change its structure to support the new strategy. When it doesn’t, the structure acts like a bungee cord and...
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