ACME_Organizational_Structure_Assignment

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University of Toronto, Mississauga *

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Management

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Feb 20, 2024

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ACME Case study: Jeremy, Aliya, Aditya, Ayush Group Members: Aliya Hazai, Jeremy Calistan, Aditya Mahajan, Ayush Menon Questions: 1) Read the case and assess what is the type of organizational structure it adopted. ACME adopted a matrix structure. The case study describes how ACME “allocated authority to regions for manufacturing and marketing decisions,” which is how organizations in a matrix structure operate. Their organizational structure “let divisions operate individually” in their stride to be more flexible. They used an elaborate strategy, which resulted in a complex structure. ACME used a decentralized approach to adapt to the changes, making the company more flexible with minimal rules, which showcases its transition to the matrix structure. 2) How does ACME achieve its strategic goals through its organizational structure? (mechanistic/organic/ traditional or a mix between two or more models). ACME products had traditionally operated with a mechanical organizational structure that utilized centralization, formalization, and complexity. This structure was hierarchical, where the CEO Jenny Kukkonen approved all significant decisions. Due to global market pressure/opportunity, they adopted the organic organizational structure. Organic structures tend to be very flexible, which is the approach that ACME aimed for through their corporate strategy, but due to all departments being decentralized and most managers having some control and authority. This resulted in inefficiencies and caused a 250 million dollar loss to ACME.

This structure was unable to achieve its strategic goal as it caused inefficiencies, fragmented supply chains, organizational silos, and miscommunication between departments. ACME’s strategic goals’ issues had arisen from various departments operating independently, and although this type of structure would be ideal for small-scale projects, the decentralization led to dysfunction. 3) Why did ACME decide to change its structure? Discuss any contingency factors that could have influenced that choice. (technology, strategy, or any other factors?) ACME’s decision to change its company structure was made by the top-level managers because the current structure has more focus on geographical departmentalization and allowed for more control to regional managers, which led to an inconsistent image of the brand international but due to the company wanting to upscale this organizational structure did not allow for the company to work cohesively. This was done because the company wanted to be able to make fast decisions at the regional level which would allow the company to compete in a fast paced and high volume industry, but this eventually failed. 4. Based on this analysis, what would be your recommendation of the best choice of organizational structure for this company? Explain why. The best organizational structure for ACME would be the functional structure, a corporate design that groups together similar or related occupational specialties. This would be the best choice as it aligns with ACME's specialization in manufacturing and distributing home

appliances. The organizational structure aligns with ACME’s core business functions and will enable efficient decision-making within specific functional areas by organizing employees based on their specific skills and knowledge. This helps create a clear and defined system that uses the strengths and expertise of each department, and addresses the challenges posed by the evolving home appliances industry.

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