BUAD 304 Final Review

Versutia Capital has had tremendous growth and great success since its establishment in early 2003. Its recent period of lower performance is alarming, but through an analysis of the provided information, we were able to identify that the decline in performance can largely be attributed to ineffective leadership. The causes of this problem have nothing to do with Leslie as the current leader, but with the environment in which she leads. We believe that the following three elements are the main causes of Versutia’s ineffective leadership: an organizational structure that did not fit the changing needs of the company, a culture divergent from Versutia’s maxims, and poor communication and lack of feedback.
This paper will further analyze Versutia’s problem and its causes, as well as explore two possible solutions: reorganizing Versutia to create a more bureaucratic structure, and restructuring and reorganizing Versutia’s capital maxis. Ultimately, we believe that Versutia should implement elements from both recommendations in order to better prepare for a future of constant growth.
Cause 1: Ill Fitting Organizational Structure
Due to Leslie’s hands-on approach, more problems were created due to the growth of the company and complexity of tasks. Versutia employs a simple organizational structure, which is characterized by having wide spans of control, a low degree of departmentalization, authority centralized in a single person, and little formalization. In addition, the current method of rewards is centralized with just Leslie hence motivation of employees was hindered due to too much work, lack of oversight and the ambiguous requirements for pay. This simple structure may have allowed Versutia to flourish in its early stages, but this structure was ill filling, actually hindering the company as it went through rapid growth, and created an environment difficult for Leslie to lead as the company grew. As the company’s workload exponentially increased for