A company X Ltd. manufacturing cosmetics, which has enjoyed a pre-eminent position in a business, has grown in size. Its business was very good till 1991. But after that, a new liberalised environment has seen an entry of many MNC's in the sector.
With the result, the market share of X Ltd. has declined. The company had followed a very centralised business model with directors and divisional heads making even minor decisions. Before 1991, this business model had sewed the company very well as consumers have no choice. But now, the company is under pressure to reform.
What organisation structure changes should the company bring about in order to retain its market share?
A company X Ltd. manufacturing cosmetics, which has enjoyed a pre-eminent position in a business, has grown in size. Its business was very good till 1991. But after that, a new liberalised environment has seen an entry of many MNC's in the sector.
With the result, the market share of X Ltd. has declined. The company had followed a very centralised business model with directors and divisional heads making even minor decisions. Before 1991, this business model had sewed the company very well as consumers have no choice. But now, the company is under pressure to reform.
What organisation structure changes should the company bring about in order to retain its market share?
In view of increased competition and constant changes in market dynamics and consumer preferences, the following changes are advised.
(i) The company should increase delegation and dec centralisation of authority to allow decision-making at all levels.
(ii) Since the company is dealing in FMCG (Fast Moving Consumer Goods Sector), the lower level staff should be given more power to clinch deals like giving them the authority to give customers more discounts on bulk orders, etc. This is done because FMCG sector characterises dynamic customer preferences and frequent change in Paste which can be judged easily by people at action points.
(iii) Development of good communication system from lower levels to the top level, to help top management take strategic decisions on changing situations.
(iv) Suggestion system should be initiated and good suggestions should be rewarded.
(v) Maximum participation in decision-making should be ensured to motivate staff and achieve good results for the company.
In view of increased competition and constant changes in market dynamics and consumer preferences, the following changes are advised.
(i) The company should increase delegation and dec centralisation of authority to allow decision-making at all levels.
(ii) Since the company is dealing in FMCG (Fast Moving Consumer Goods Sector), the lower level staff should be given more power to clinch deals like giving them the authority to give customers more discounts on bulk orders, etc. This is done because FMCG sector characterises dynamic customer preferences and frequent change in Paste which can be judged easily by people at action points.
(iii) Development of good communication system from lower levels to the top level, to help top management take strategic decisions on changing situations.
(iv) Suggestion system should be initiated and good suggestions should be rewarded.
(v) Maximum participation in decision-making should be ensured to motivate staff and achieve good results for the company.
