Question
Bob's Appliances sells and services household appliances such as washing machines, dishwashers, ranges, and refrige rators. Over the years, the company has developed a good
Bob's Appliances sells and services household appliances such as washing machines,
dishwashers, ranges, and refrige
rators. Over the years, the company has developed a good
reputation for the quality of its customer service, and many local builders patronize the
store. Recently, other national retailers, including Best Buy, Lowe's, and Costco, have
begun to offer applia
nces for sale. To attract more customers, however, these stores also
carry a complete range of consumer electronics products
televisions, stereos, and
computers. Bob Lange, the owner of Bob's Appliances, has decided that if he is to stay in
business, he m
ust widen his product range and compete directly with the chains.
Lange decides to build a 20,000
-
square
-
foot store and service center, and he is now hiring
new employees to sell and service the new line of consumer electronics. Because
of his
company's increased size, Lange is not sure of the best way to organize the employees.
Currently, he uses a functional structure; employees are divided into sales, purchasing and
accounting, and repair. Bob is wondering whether selling and servicing
consumer
electronics is so different from selling and servicing appliances that he should move to a
product structure (see the figure) and create separate sets of functions for eac
h of his two
lines of business.
1.
You are a team of local consultants whom Bo
b has called in to advise him as he makes
this crucial choice. Which structure do you recommend? Why?
2.
Contrast the three traditional organizational designs.
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