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Essay Questions

Question 1

Imagine you have ideas for clothing stores that will directly compete with Abercrombie and Fitch. What will your strategy be? How will that impact your choice for organizational design?

In order to effectively compete with large and established firms like Abercrombie and Fitch in the clothing business, I would adopt a single product strategy. This would entail opening a number of stores in high market areas where, expectedly, Abercrombie and Fitch will probably be having one or two outlets too. The single product strategy will be relevant to my organizational design because my firm will only be dealing with a line of clothing stores. Having a multiple number of stores dealing in the same product will make it necessary to have a functional departmentalization system to cater for all management structures I will have in place. I would also need to be widely diversified in my operations in order to spur growth. To maintain an effective management system, there will also be a need for effective coordination among the different stores. For this approach to meet its target of measuring up to the competition provided by established companies like Abercrombie and Fitch, each of my company’s stores will have a relatively autonomous management structure but major decision-making latitude will remain with the top level. This type of decentralization will give each unit the opportunity to devise its own independent strategies of operating in the face of competition.

Question 2

Briefly describe the matrix form of organization design. List its advantages and disadvantages. This structural form is most likely to be used under what conditions?

As a form of organizational design, matrix design is based on overlapping sets of product departments on an existing functional organization. It relies on a structure composed of multiple command levels. In a matrix design, employees working on a project are both members of their...
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