Question

Angelica Canizales is the CEO of Mucho Dinero Enterprises. Sales have dropped for four consecutive years and accountants have reported net losses in each of the last two years. Employees appear discouraged and frustrated. Recently, Angelica met with managers from marketing, production, and finance to listen to their views regarding the company's problems. The managers unanimously agreed that the main problem was a lack of communication among the several functional areas of the business. Each manager felt that the firm could increase quality and customer satisfaction with better interdepartmental communication. Angelica also met with marketing and production employees to get their respective opinions on the problems of the firm. One employee from the production department observed, "We have so many layers of management that it takes forever to make decisions." An employee from marketing complained, "This place is so bogged down with rules and regulations that there is no opportunity to be creative." Several employees shared their opinions regarding their bosses. Specifically, one employee said, "My boss never pays attention to my ideas. He just issues orders and expects me to obey them." Angelica decided, after listening to many comments from managers and employees and also suppliers and customers, that the only way to end Mucho Dinero's slide was to completely rethink the firm's structure and to make radical changes in its organization. She presented her ideas to the board of directors, promising to voluntarily resign if her efforts to reorganize did not return the firm to profitability.
Angelica's decision to completely redesign Mucho Dinero's organization indicates that she believes the best approach to her firm's problems is

A. restructuring.
B. organizational therapy.
C. competitive benchmarking.
D. flexible departmentalization.

Answer 1

Angelica's decision to completely redesign Mucho Dinero's organization indicates that she believes the best approach to her firm's problems is

A. restructuring.

Explanation:

Angelica has found that the problem that riddles her company is not something from the outside that can be cured from bailing out certain elements but comes from within in that it is imbibed in their own structure as a firm.

This means that they are lacking in communication between different structures inside the company. So the restructuring of the functional structures keeping in mind communication flow can do the trick for the firm.