1 2 Discuss the factors that influence a firm’s organizational structure. Explain specialization and departmentalization as two of the building blocks of organizational structure. Describe centralization and decentralization, delegation, and authority as the key ingredients in establishing the decision-making hierarchy. Explain the differences among functional, divisional, matrix, and international organizational structures and describe the most popular new forms of organizational design. Describe the informal organization and discuss intrapreneuring.
COOKING UP A NEW STRUCTURE
For years, the Sara Lee Corporation grew by buying an amalgam of different businesses and piecing them together under its corporate umbrella. And for years, the firm’s senior managers have struggled with how best to structure the various Sara Lee holdings. One former long-term CEO, John Bryan, presided over growth that took Sara Lee far beyond 172
ORGANIZING THE BUSINESS
its foundation in food products to encompass dozens of business lines—everything from cake mixes to insecticide to lingerie. The various businesses were acquisitions, but their original managers still controlled each one as if it were a separate company. Hence, each business retained its own legal department, human resource staff, administrative units, accounting departments, and so forth. Calculating the cost of all this duplication, Bryan reached the conclusion that the company could not afford such high costs at a time when price compe—Consumer-products analyst on one of the drawbacks tition was heating up. In an effort to fix things, starting in 1997, Bryan of extensive reorganization sold or eliminated about one-quarter of the firm’s 200 products. He cut redundant factories and the workforce, reduced the number of products, and standardized companywide processes. His goal was to remove Sara Lee from manufacturing while...