Case Study 13.2 More Than Cosmetic Changes at Avon

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1.What organizational structure problems did Avon experience prior to the reorganization? Prior to its reorganization, Avon had an over arching tall hierarchal structure with a departmentalized – divisional organizational structure.

The tall hierarchal structure or the narrow span of control accounted for the senior managers not being aware of what was happening on the ground. The tall hierarchal structure refers to the number of layers of management in the relaying of information before that information reaches the head, in this case Jung. Avon previously had a structure of fifteen layers.

According to McShane et al, “senior managers in tall structures often receive lower quality and less timely information from the external environment because information from frontline employees is transmitted slowly or not at all up the hierarchy”. They further stated that “more layers of management through which information must pass, the higher the probability that managers will filter out information that does not put them in a positive light.” This is one factor that can account for the stated issue of Ms. Jung not being close to the operations.

Another factor that contributed to this was the management structure within the various decentralized regional organizations. The country managers in those organizations were given a large amount of autonomy in their decision making as it relates to running their own plants, developing new products and creating their own ads. This departmentalized system is characteristic of a divisional structure (sometimes call the multidivisional or M-form structure) and in particular the geographic divisional structure that is an amalgamation of the product/services and the client divisional structure. The advantage of this type of structure was that the country manager could have appealed/related to the culture of the individual country more adequately.

Of particular importance though, is the fact that the decisions were made...
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