The modern Corporation Limited produces and distributes packaged food products, such as cereals, spices, puddings, jellies, crackers, salad dressings, etc
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Principles and Practice of Management
Case (20 Marks)
The modern Corporation Limited produces
and distributes packaged food products, such as cereals, spices, puddings,
jellies, crackers, salad dressings, etc. The company sells nationwide and
conducts a very large national advertising campaign. It has 75 plants located
throughout the country and markets 65 different products, each under its own
trademark. These are all food products, but are not otherwise closely related.
They vary from long-margin specialities with comparatively small volume to
larger volume items with similar profit margins. Different raw materials and
commodities are used in their processing. All products, however, have the
common factor of being sold throughout retail grocery stores. Gross sales are
Rs. 2,500 lakhs and total assets are Rs. 1,250 lakhs. Management is
centralized. The chairman of the board, the President, and four Vice-Presidents
with responsibility for sales, production, purchasing, and law, make up the
executive top of the company and operate as a committee on all general policy
matters. Sales, advertising, and sales promotion are all under the jurisdiction
of the sales Vice-President. All plant operations, as well as research and
engineering, report to the production Vice-President. Purchasing is the
responsibility of its Vice-President, Who also governs traffic. Public
relations, law and corporate functions are under the general counsel. Financial
responsibilities are handled by the president, and employee relations are
covered by each Vice-President in his own area of responsibility. Each plant is
operated by a superintendent whose authority is over wages, maintenance cost,
output, quality, hiring, inspection and the other normal plant operation
responsibilities. Superintendents report to 8 regional production managers who
are responsible to the production Vice- President. The volume of production in
each plant is scheduled by the production control group reporting to the
operating Vice- President. Final Schedules are set after consulting the sales
Vice-president. Opportunities for increasing the line of products and expanding
the business are being lost because of lack of executive’s time to study them
to manage new products. In any business where specialties sold under trademark
brands are the major business of a company, it is necessary for that company to
continually bring out new products and to study old ones to determine, the
point of no return with regard to promotion and advertising expenses. The Modern Corporation management feels
that, in addition to lost opportunities for sound expansion, profit
opportunities in present products are not being fully recognized. The business
may have grown too big for the form of management.
Answer
the following question.
Q1.
How have changed conditions in this company affected the appropriateness of its
organization structures?
Q2.
What changes do you recommend to be made in the company organization structure?
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