The Dynamic Corporation is a national manufacturing firm producing and selling toys and games. Prior to 2003, the company specialised in adult games, but in 2004, the toy market for children became so lucrative that the Dynamic Corporation decided to compete in that line too. After an intensive study of the childrens toy market, Dynamic Corporation decided to market childrens video games. The video game industry volume is now estimated at $90 billion annually and the large producers such as Nintendo spend well over $500 million in research and development. In 2010, because of growing sales, the management of Dynamic Corporation considered a reorganisation. At the time, the firm was organised along functional lines. However, Trudy Smith, the President of the company, thought it might be wiser to change to product departmentalization. The finance and accounting department employees seems indifferent to this change. The Presidents reorganisation plan was to set up three product divisions: baby toys, adult games and childrens video games. The baby toys and adult games divisions accounted for over 50 percent of the firms sales but research showed that the market for childrens games was rapidly growing. According to the market research department, sales for the childrens video games would surpass the other divisions.

QUESTIONS A. i. Differentiate between the mechanistic and organic structures. (4 marks) ii. Which of these structures would be more suitable for Dynamic Corporation? Justify your answer (4 marks)

B. Discuss THREE (3) advantages of product departmentalization and TWO (2) disadvantages of functional departmentalization. (10 marks)

C. Describe how the following two contingency variables would impact Dynamic Corporation: i. Technology ii. Strategy (8 marks)

D. i. State whether the decision to change the organisations structure was a programmed or a non-programmed one. (1 mark)

ii. Explain TWO (2) reasons for your answer to part (a). (4 marks)

E. i. Explain the three types of decision-making conditions. (6 marks)

ii. Identify the decision-making condition that is applicable to the current operation of Dynamic Corporation. (1 mark)

iii. Explain two reasons for your answer to part (b). (4 marks)

F. Discuss TWO (2) features of the formal organisation identified within the case study? (8 marks)