Organizational Behaviour

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504 C H A P T E R 1 5  Organizational Structure

Discussion Questions

15.1 Is it possible to be a great leader of employees in a highly mechanistic organization? What special talents or abilities might be required?

15.2 Why do the elements of structure, such as work specialization, formalization, span of con- trol, chain of command, and centralization, have a tendency to change together? Which of the five do you feel is the most important?

15.3 Which is more important for an organization: the ability to be efficient or the ability to adapt to its environment? What does this say about how an organization’s structure should be set up?

15.4 Which of the organizational forms described in this chapter do you think leads to the high- est levels of motivation among workers? Why?

15.5 If you worked in a matrix organization, what would be some of the career development challenges that you might face? Does the idea of working in a matrix structure appeal to you? Why or why not?

Case: Mattel

Although ex-CEO Margo Georgiadis’ restructuring ideas were lauded internally at Mattel and many believed they were starting to show results, the environment shifted quickly for the toy company when retailer Toys ‘R’ Us declared bankruptcy and financial results drove Mattel’s stock price to a heavy decline (73 percent) and a 10-year low. Georgiadis resigned less than a year after she started (to become CEO of Ancestry.com). One of Mattel’s board members (appointed by Georgiadis), Ynon Kreiz, became the newly appointed chairman and CEO. Kriez is Mattel’s fourth CEO in 4 years and has experience largely in entertainment and media-distribution along with a background in licensing and merchandising. He is the third CEO in row with no experience in making toys per se.

Not wasting any time and less than 3 months after Kriez starting, Mattel announced a reduc- tion of more than 2,200 jobs, which equaled 22 percent of its non-manufacturing workforce. In addition, manufacturing plants in New York and Mexico were planning to be sold. Continuing the “structural simplification program” that was already started, Kreiz hopes to realize a $650 million gain. However, the restructuring plan has created a lot of anxious employees, and employees state that morale is near an all-time low. Asked about how he plans to reassure employees, Kriez stated that “It’s town halls. It’s small group meetings. It’s one-on-one meetings. It’s traveling to all of our offices around the world and meeting people on the ground at all levels of the company. At the same time, part of my responsibility is less talk and more action. What we try to bring to the organization now is clarity and focus. If you do that, and you’re transparent and forthcoming, the message travels. People eventually understand where you are heading and become part of the journey.”*

Strategically, Kriez believes that Mattel’s future lies with creating its own media empire. In order to accomplish this, his plans largely revolve around turning Mattel’s brands into movies, television series, and video games. In order to accomplish this, Kriez has created an in-house studio—Mattel Films—within the company. Two major films based around Barbie (starring Margot Robbie) and a live-action Hot Wheels are set for production and release in 2020–2021. One investment analyst replied that “Mattel is doing what should have been done 10 years ago.”

15.1 If you were a Mattel employee, would you be encouraged by what CEO Ynon Kriez said about how he is following up on restructuring? Is there a way he could have said it better?

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coL61557_ch15_481-509.indd 505 11/05/19 05:55 PM

505C H A P T E R 1 5  Organizational Structure

15.2 Given that Mattel’s structure is still organized around brands (toys), how do you expect a new film division to fit in from a structural standpoint?

15.3 How might Mattel change its structure to be more efficient or successful?

*Source: Dow Jones & Company, Inc.

Sources: J. Cresswell, “Mattel’s Revival Plan: Bet on Barbie, the Movie,” The New York Times, December 18, 2018, https:// www.nytimes.com/2018/12/13/business/mattel-barbie-movie-ynon-kreiz.html; M. Lev-Ram, “Tech Takeover in Toyland,” Fortune, October 1, 2017, pp. 76-84; Mattel, “Toy Fair Analyst Meeting Presentation,” Mattel.com, February 16, 2018, https:// mattel.gcs-web.com/static-files/b68be31c-d5e3-4fce-8349-8f4b9a0bd49c; RTTNews, “Mattel to Cut More Than 2,200 Jobs,” Markets Insider, July 25, 2018, https://markets.businessinsider.com/news/stocks/mattel-to-cut-more-than-2-200- jobs-1027400975; P. Ziobro, “Mattel, after Years Toying with Big Screen, Creates Film Division,” The Wall Street Journal, September 6, 2018, https://www.wsj.com/articles/mattel-after-years-toying-with-big-screen-creates-film-division-1536271961.

Exercise: Creative Cards, Inc.

The purpose of this exercise is to demonstrate the effects of structure on organizational effi- ciency. This exercise uses groups, so your instructor will either assign you to a group or ask you to create your own group. The exercise has the following steps:

15.1 Creative Cards Inc. is a small but growing company, started 10 years ago by Angela Naom, a graphic designer. The company has added many employees over the years but without a master plan. Now Angela wants to reorganize the company. The current structure of Creative Cards is shown in the accompanying figure. Review the organizational chart, and identify at least 10 problems with the design of Creative Cards Inc. Be sure to consider work specialization, chain of command, span of control, centralization, and formalization in developing your answer.

West Coast Operations V.P.

H.R. V.P.

East Coast Sales Mgr.

Legal 4 emp.

Quality Control Mgr.

Buyer I Inks

Press Operator

Sanitation Engineer

Distribution Manager. Northern Region

Sales Reps. 8 emps.

Janitors 4 emp.

Sales V.P. Creative Dir. Exec. V.P.

Art Design Mgr. Verse Writer Printing Sup.

Payroll Mgr. Finance Dir. Admin. Asst.

President

Sympathy Card Sup.

Birthday Card Sup.

E-Card Sup.

Card Cutting Sup.

4 emps. 60 emps. 25 emps. 10 emps. 14 emps.

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