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Mini-Case
Angelica Canizales is the CEO of Mucho Dinero Enterprises. Sales have declined for four
consecutive years and the firm's accountants have reported net losses in each of the last two
years. Employees appear demoralized and frustrated. Recently, Angelica met with managers from
marketing, production, and finance to listen to their views regarding the company's problems. The
managers unanimously agreed that the main problem was a lack of communication among the
several functional areas of the business. Each manager felt that the firm could increase quality
and customer satisfaction with better interdepartmental communication. Angelica also met with
marketing and production employees to get their respective opinions on the problems of the firm.
One employee from the production department observed, "We have so many layers of
management that it takes forever to make decisions." An employee from marketing complained,
"This place is so bogged down with rules and regulations that there is no opportunity to be
creative." Several employees shared their opinions regarding their bosses. Specifically, one
employee said, "My boss never pays attention to my ideas. He just issues orders and expects me
to obey them." Angelica decided, after listening to many comments from managers and
employees and also suppliers and customers, that the only way to end Mucho Dinero's slide was
to completely rethink the firm's structure and to make radical changes in its organization. She
presented her ideas to the board of directors, promising to voluntarily resign if her efforts to
reorganize did not return the firm to profitability.
360. Employee complaints that there are too many layers of management and too many rules
and regulations suggest that Mucho Dinero is a(n):
361. Angelica's decision to completely redesign Mucho Dinero's organization indicates that
she believes the best approach to her firm's problems is:
362. Currently, Mucho Dinero is organized into specialized departments such as marketing,
finance, production and personnel. These departments are designed to allow people with similar
skills and expertise to work together. This approach is known as ___________
departmentalization.
363. In order to encourage more interdepartmental communication and cooperation, Angelica
is thinking about setting up groups of workers from different departments to work together on a
long-term basis. She is even thinking about asking people from some of Mucho Dinero's
suppliers, customers, and distributors to join these groups. The type of group that Angelica is
considering is known as a(n):
364. From her discussions with employees, Angelica learned quickly that production workers
put their trust in 20-year veteran Willie McClaren. Many people told her that if you wanted
something done, Willie was the person to see. Willie appears to be an important part of the:
365. Discuss Max Weber's views on organization theory.
366. What is a matrix organization? What advantages and disadvantages are associated with
this type of organization?
367. What is a cross-functional, self-managed team? Who would serve on such teams? Why
do cross-functional, self-managed teams often lead to networking?
368. Describe two major issues that are important in organizational design.
369. Explain the difference between a firm's formal organization and its informal organization.
Why are both types of organization important to managers?
