Larry Walther started his research company in 1992 in Phoenix, Arizona. He began with a few local clients and two employees. Interviewers were hired as subcontractors and were paid only when his clients paid Larry. In order to make ends meet, he opened several mall locations and set up a focus group facility. By taking in work as a field service as well as a full-service research company, he began to grow. In 1997, his sales reached $1 million, and he had 20 employees. Today the firm has 300 employees.

Larry’s growth slowly led to the creation of a functional organization structure. This seemed to happen as much by chance as by design. For example, to get control over the 15 client service/salespeople, they were put into a separate department. The same thing happened with questionnaire design and programming, advanced analytics, database management, and so forth.

Larry’s company has grown beyond his wildest dreams, yet all is not well in the organization. Recently, he lost a number of key people, and morale seems to be low throughout the company. Some clients have complained about late projects and unsatisfactory reports. In fact, he recently lost one of his oldest and best clients. Much of the problem, but certainly not all, seems to be his project managers and a lack of project control. An informal survey by Larry of his best clients found:

• The field service recruited unqualified respondents.

• Underqualified interviewers were used for executive interviews.

• The moderator could not keep up with changes that were made in the discussion guide.

• The report lacked depth, interpretation, or insight.

• The presentation or report was disorganized and confusing.

Questions

1. Larry is considering reorganizing. What should he do?

2. What are the advantages of keeping a functional organizational structure? What are the disadvantages?

3. What might he gain from a team structure? Are there any risks in moving to this form of organization?

4. What should Larry do about directing and controlling his project managers?