What were the problems confronting Handy Snack before the change?
The problem which Handy Snack’s faced before the change was in the terms of the organization structure. Mullins defines it as “the pattern of relationships among positions in the organization and among the members of the organization. It makes possible the application of the process of management and creates a framework of order and command through which the activities of the organization can be planned, organized, directed and controlled.”
Drucker points out the influence of correct structure on the performance of the company. “Good organization structure does not by itself produce good performance. But a poor organization structure makes good performance impossible, no matter how good the individual managers may be.”
The problem arisen in the case of Handy Snack’s Co is the extent of decentralization in terms of delegation of responsibilities to groups within the organization in order to provide them autonomy or independence. According to Mullins decentralized structure has the following advantages:
1. It makes decision closer to the operational level of work
2. The decisions become more responsive to local circumstances
3. It improves the level of personal customer service
4. It makes organization more flexible to developments
5. Support services are more likely to be effective as they’re provided closer to the activities they are intended to serve.
6. It is likely to affect positively on the motivation and morale of staff.
In terms of size and geographical position (distributing company with 9 regions) it’s obvious that the head office was impossible to control all of them. Moreover, each region had different variations of local demand with the view to variety of items and amount of them in requisition in the regions. Therefore, decentralized structure used to be suitable for the organization. The regions were autonomous in making...