A company manufacturing consumer goods has grown in size. It was a market leader but with changes in the economic environment and with the entry of MNCs its market scheme is declining. The company was following a centralised business model as even the minor decisions were in the hands of the top level. Before 1991 this model was suitable for the company but now the company is under pressure to reform.

What organisational structure changes should the company bring about in order to retain its market share?

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Solution

The company must start sharing decision-making with lower and middle level also. It should introduce the concept of decentralisation instead of following complete centralised business model. It must give due importance to decentralisation also as in today's FMCG (Fast Moving Consumer Goods) industry, there is need for fast action and quick decision-making which is possible only with decentralisation. By using decentralisation model company will get the following benefits.

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Q. A company manufacturing consumer goods has grown in size. It was a market leader but with changes in economic environment and with the entry of MNCs its market scheme is declining. The company was following a centralized business model as even the minor decisions were in the hands of top level. Before 1991 this model was suitable for company but now company is under pressure to reform.
What organisational structure changes should the company bring about in order to retain its market share?

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Questions
What organisation structure changes should the company bring about in order to retain its market share?
How will the changes suggested by you help the firm? Keep in mind that the sector in which the company is FMCG.

How will the changes suggested by you help the firm? (Keep in mind that the sector in which the company is FMCG).

Q. XYZ Ltd. Co., manufacturing cosmetics and enjoying a predominant position in the industry has grown in size. Its business was very good till 1991. But after that new liberalized environment has seen the entry of many MNCs. In this sector with the result that market share of XYZ has declined. The company followed a very centralised business model with directors and divisional heads making even minor decisions.
(a) Which function of management is being indicated here?
(b) What dimension of environment is implicit in this case? Indicate by quoting the lines from above para.

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