Question

The Amos Ball Printing Company was established in 1866. Currently, Amos Ball V is the CEO and chairman of the board. The company has traditionally used a functional structure. Five years ago, the company branched into online publishing and small-batch printing in addition to its regular large-batch operations. Both new businesses are significantly different in technology and marketing from each other and from Ball's traditional business. Despite the hiring of experienced professionals in these new endeavors, performance continues to be poor and is affecting Ball's overall performance. Which of the following statements is TRUE?
(A) Amos should consider adopting the multidivisional structure.
(B) Mr. Ball has insufficient power to change the structure of the organization.
(C) Restructuring must only be done from a position of strength, so it is necessary to wait until the company's overall performance improves before making radical changes.
(D) These businesses are too disparate to coordinate within one corporate structure.

Answer 1

Answer:

A

Explanation:

As it is already mentioned that both businesses are different from each other, therefore, managing these two different business by having a one organizational structure will lead to confusion as in the case of question.

When two different business merge together this is called conglomerate integration.

Business merge together in order to enjoy the benefit of the term 'synergy' that means the whole is greater than sum of its parts. That bring definitely some advantages for the merged businesses.

But that too have disadvantages when the merged businesses failed to get benefits of the concept of synergy. That is, large businesses are difficult to manage, two different businesses require different set of management, and strategies.