OfficeFurniture, a company with a 75-year history, manufactures high-end office furniture for corporate workplaces. Their products can be found in the offices of companies around the world, including the world's largest corporations. They manufacture their products in-house and sell through sales representatives (who make sales calls to corporations). Much of the company's success has been due to the trusting business relationships developed over the years between the sales representatives and corporate contacts. OfficeFurniture also sells through distributor companies that specialize in corporate office furniture. The distributors carry a variety of office furniture brands, including from OfficeFurniture's competitors. Since the start of the pandemic, OfficeFurniture has seen a steep decline in sales as corporations, law firms, and others rethink their office plans, with many significantly scaling back on their office space. For example, several major companies and long-term clients of OfficeFurniture have shifted permanently to a hybrid model, with many employees giving up their offices to work permanently from home. OfficeFurniture believes there will continue to be a need for corporate office space and thus demand for office furniture. But OfficeFurnitureleadership also acknowledges that the future is uncertain. Further, the cost of raw materials has been increasing dramatically as OfficeFurniture, like many companies, has struggled to obtain needed materials from their supply chain at an affordable price. Meanwhile, OfficeFurniture has stood on the sidelines as the home furnishing market continues to expand rapidly. OfficeFurniture has never manufactured nor sold products for homes, but leadership thinks the company is now missing out. The CEO has decided that OfficeFurniture must expand into the growing market of home furnishings, including not just for home offices, but dining rooms, living rooms, and so on. The CEO has presented the leadership team with two options: (1) First, the company could keep the company's current structure and increase funding to the existing design department, manufacturing department, and sales department, so that they may also begin to design, manufacture, and sell home furnishings, in addition to their existing office products. (2) Second, the company could create a new subsidiary organization (that OfficeFurniture owns and controls) that focuses exclusively on home furnishings.

Question Prompt 1(20 points): Please discuss what you see as some of the potential benefits and risks of these two different organizational approaches.

Question Prompt 2(20 points): What advice would you provide OfficeFurniture as it confronts these challenges and looks to the future?