Chair Corporation (KCC), was considering a major reorganization a divisionalization of his com- pany's organization structure: Like many entrepreneurs, I have always been focused on top-line sales growth, and I have constantly been impressing on my managers to drive sales. My belief was that if you do that, everything else takes care of itself. Up until recently, I think our approach made sense. We had very little competition, and our mar- gins were huge. Now things are changing. We've got some major competitors who are making headway. I think we needed to take a fresh management approach to find opportunities to do things better. Our new divisional- ized organization structure should help us serve our customers better and maybe force us to eliminate certain markets or products that are not producing results. But I'm not sure it's working very well. We're see- ing some finger pointing between the managers of the new)y created divisions and the managers in charge of corporate departments. There is a lot of politics involved in defining the roles, responsibilities, , and rights, of each of the responsibility centers, and it's not clear to me yet exactly where to draw the lines. THE COMPANY In the early 1980s, Weston Krantz, an avid outdoors pelson, developed a new design for a lightweight, portable chair that could be stored in a bag and carried anywhere. Convinced that his design had commercial value, in 1987 Weston cofounded Kranworth Chair Corporation (KCC) with his long- lime friend, Kevin Wentworth, who had an MBA degree and financial expertise. (The colporation's Krantz an en wo Denver, Colorado, in the foothills of the Rocky Mountains. KCC produced a broad line of high- quality and fashionable portable, folding chairs, which were branded as various models of the Fold- it! brand. In its early years, KCC sold its products exclusively to distributors. Since its inception, KCC had been organized functionally. In 2003, reporting to the cofounders were vice presidents in charge of sales, supply chain, and finance and administration, plus staff managers responsible for advertising and research and development (Exhibit I). Over the years, KCC expanded its product offer- ings. In 2003, it offered an extensive line of folding chairs, The chairs were produced in various sizes and models, including both adult and child chairs, single chairs and loveseats, and full- and beach- height chairs. Some chairs had additional features, such as cup holders, storage pockets, and trays. Th chairs were produced at several price points, wi varying fabrics, designs (e.g. single vs. doubl layer), and frame materials. KCC also offered som related products, such as folding tripod stools, Otto mans, cots, and stadium seats. KCC also produce custom-designed products. It employed screen printing artists and seamstresses who applie custom logos, graphics, and lettering to the nylo KCC products were often seen at corporate trad shows and tailgate palties at sporting events. Th company kept track of approximately 1,500 stoc keeping units (SKUs) finished products and v ous piece parts that the company sold althoug about 8590% of the sales stemmed from only abo 40 of the SKUs.