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Solutions for the CEO

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1. If my matrix organization isn't working; decisions are taking too long, and it seems to me that instead of best solutions, I'm getting compromises. What can I, the CEO, do?

2. I am the CEO of Mancon Incorporated, and I have just acquired Pozoli, the Italian small-appliance maker (electric shavers, small household and personal care appliances). It has been in business 30 years and has manufacturing plants in Italy, Mexico, Ireland, and Spain. Its output is sold in more than 100 markets worldwide, including the United States. My company is now organized into two product groups?shaving, personal care, and an international division at the top level. How am I going to include Pozoli in my organization?

3. It is obvious that in formulating new strategies, management may uncover a need to change its organization. Can you describe some situations where the reverse may be true?

4. What measures can be utilized to control subsidiaries that are less than 100 percent owned by the firm or joint venture partners in which the firm has no ownership?

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1. If my matrix organization isn't working; decisions are taking too long, and it seems to me that instead of best solutions, I'm getting compromises. What can I, the CEO, do?

Matrix organization is functional and divisional at the same time. So decision making will get delayed because there is a lot of communication and coordination required. This leads to delays indecision making. Usually the matrix organization is used to make the fullest use of human resources.

However, if the time taken to make decisions is becoming a problem in organizational effectiveness, then the CEO should increase the centralization of decision-making. To start with he can make the functional head report to divisional heads and make the divisional head responsible for the effectiveness of decision-making. This step will speed up the decision making. In addition, as the functions are made subordinate to the divisions, the poor quality of decisions because of conflicts will also be reduced and to an extent the quality of decision making will improve.
The disadvantage of this approach is that the role of the functional personnel in decision making will be reduced and their contribution may also decrease.


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Read Case 7, "CEO Compensation" (pages 254-255 in the Greer text), then answer all five questions on pages 255-256.

1. Explain the potential adverse impacts on strategy implementation when the CEOs of companies receive extremely high compensation.

2. Discuss the merits of the various recommendations for solutions to the problem of extremely high CEO compensation.

3. What non-regulatory pressures are most likely to bring excessively high CEO salaries more in line with realistic levels?

4. Evaluate the argument that pay for performance justifies the level of compensation paid to the CEOs noted in the example.

5.Evaluate the argument that the problem of excessive CEO compensation should not addresses through legislation.

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