TerraFoods (TF) produces two product ranges: plant-based meals and snack bars. TF currently uses a functional structure. Because customer demand is changing quickly, TF is considering a product-based structure. This would create separate product divisions but would duplicate some roles.

Table 4: Estimated annual financial effects of changing to a product-based structure

Coast & Clay (CC) is a family-owned business that manufactures handmade ceramic tableware for restaurants and home customers. CC currently has a tall organizational structure: supervisors report to production managers, who report to the operations director, who reports to the managing director. Decisions about supplier changes, quality issues and overtime must be approved by senior managers.

A recession has reduced demand from restaurants and CC’s cash flow has worsened. The managing director is considering delayering by removing the production manager level. Supervisors would report directly to the operations director and would be given more authority to solve production problems. CC estimates that delayering would reduce annual salary costs, but some experienced production managers would leave the business.

Canal Coffee (CC) operates 18 coffee shops in three cities. CC has grown by offering the same menu, store layout and service standards in every shop. Its current organizational structure is centralized and mainly functional: marketing, operations, finance and human resources decisions are made at head office. Store managers must obtain approval before changing prices, launching local promotions or adjusting opening hours.

New competitors are using social media trends and city-specific promotions to attract customers. CC’s store managers argue that they understand local customers better than head office. The chief executive officer is considering changing to a more decentralized regional structure, with one regional manager for each city and more authority delegated to store managers.

Table 1 shows selected data for CC’s current structure and the proposed regional structure.

Mosaic Toys (MT) manufactures educational toys for retailers. MT is currently organized by function, with separate design, operations, marketing and finance departments. This structure has helped MT control costs and maintain consistent quality.

External conditions are changing. Demand for app-linked science, technology, engineering and mathematics (STEM) kits is increasing rapidly, while demand for traditional wooden puzzles is falling. Large retailers now expect toy manufacturers to launch updated product ranges more quickly and to provide product-specific marketing support.

MT’s directors are considering changing from a functional structure to a product structure, with separate divisions for wooden puzzles, STEM kits and creative art kits. Each division would have its own product manager, marketing team and operations planner.

Table 2 shows selected data about MT and the proposed structural change.

FreshLoop (FL) produces chilled ready meals made from surplus vegetables. FL began in one country with a functional structure: marketing, operations, finance and human resources report to the chief executive officer (CEO). FL has recently started selling through supermarket chains in three neighbouring countries. Customer tastes, food-labelling rules and delivery expectations differ in each country. Local supermarket buyers complain that FL’s head office is too slow to approve changes to recipes and packaging.

The CEO is considering changing from a functional structure to a regional structure, with separate country managers responsible for sales, local marketing and some operational decisions. Finance and food-safety standards would remain controlled by head office.

SafeRide Analytics (SRA) develops software that helps bus companies monitor driver safety. SRA has grown quickly after new government transport regulations required bus operators to provide detailed safety reports. SRA currently has a flat, informal structure. Software developers, customer-support employees and sales staff communicate directly with the founder, who makes most major decisions.

SRA’s largest customers now want guaranteed response times, documented procedures and consistent compliance reports. Some employees value SRA’s creative culture and worry that more formal rules will slow innovation. The founder is considering a more centralized and bureaucratic structure, with a compliance department, formal approval procedures and clearer reporting lines.

Civitas Analytics (CA) is a consultancy that provides data analysis for city governments. CA is currently organized by function, with separate departments for data science, software development, client support and finance. This structure has supported professional standards, but complex client contracts increasingly require employees from several departments to work together.

Demand for climate-risk and transport-planning projects is growing, but contracts vary in length and required expertise. Some projects require specialist knowledge only for a few weeks. CA has missed several deadlines because functional managers compete for the same employees.

CA’s directors are considering two options:

• Option 1: Change to a project-based organization, with temporary project teams led by project managers. Employees would still receive professional support from their functional specialists.
• Option 2: Adopt Charles Handy’s Shamrock Organization, retaining a smaller core workforce, using external contractual specialists and employing flexible analysts during peak demand.

Table 3 shows selected data for CA’s current structure and the two options. For this question, calculate forecast net contribution as annual project contribution minus annual labour costs and project/contract management costs.

RootsReach Food Cooperative (RFC) – a social enterprise

Read the resources and answer the questions that follow.

Resource 1 — Background of the social enterprise

RootsReach Food Cooperative (RFC) is a social enterprise that buys surplus vegetables from small farms and uses them to produce low-cost meal boxes for families on low incomes. RFC’s mission is to reduce food waste and improve access to healthy food. It operates from one central kitchen and distributes meal boxes through community centres in one city.

RFC currently has a tall, functional organizational structure. The chief executive officer (CEO) approves most decisions, including changes to meal-box contents, delivery routes and local partnerships. Managers believe this centralization protects food safety and consistency. However, community-centre coordinators say that local demand changes quickly and that waiting for head office approval often causes missed opportunities to redistribute surplus food.

Resource 2 — Table 1: Selected operational information for RFC

Table 1 shows selected data for RFC’s current centralized functional structure and a proposed decentralized regional structure. It compares average approval time, monthly food waste, paid management posts, training costs for regional coordinators and number of community partners served.

Resource 3 — Social-media statistic

A recent RFC post asking families to suggest culturally appropriate meal-box recipes received 8 400 views, 760 comments and 1 900 shares in three days. Many comments requested different meal boxes in different neighbourhoods.

Resource 4 — Quotation from RFC’s operations manager

“Our food safety standards cannot vary between neighbourhoods. A single mistake could damage trust in RFC and harm vulnerable families.”

Resource 5 — Strategic options being considered by RFC

Option A: keep the current tall functional structure but improve communication software.

Option B: change to a regional structure with three regional coordinators who can approve local partnerships, recipe adaptations and delivery-route changes within agreed limits.

Option C: delayer by removing one middle-management level and giving community-centre coordinators more delegated authority, while keeping food safety decisions centralized.

CareCycle Mobility (CCM) – a social enterprise

Read the resources and answer the questions that follow.

Resource 1 — Background of the social enterprise

CareCycle Mobility (CCM) refurbishes donated bicycles, wheelchairs and mobility scooters, then sells or leases them at low prices to older people and people with disabilities. CCM also trains unemployed adults in repair skills. Its mission is to increase independent mobility while reducing waste.

CCM has grown from one workshop to seven repair hubs in different towns. It currently has a tall, centralized structure. Each hub has a supervisor who reports to a regional manager, who reports to the operations director. Decisions about spare-parts suppliers, volunteer schedules and customer-priority rules are approved at head office. Hub supervisors argue that local customer needs differ and that the structure is too slow. The finance director is concerned that some hubs have low utilization and high permanent staffing costs.

Resource 2 — Table 1: Selected staffing and service information for CCM

Table 1 shows selected data for CCM’s seven repair hubs, including permanent repair employees, volunteer hours, average customer waiting time, spare-parts stock-outs, seasonal demand variation and annual management salary costs.

Resource 3 — Quotation from CCM’s founder

“Our customers need reliable support, not just cheap repairs. If we outsource too much or rely heavily on casual workers, we may lose the trust and repair knowledge that make CCM different.”

Resource 4 — Social-media statistic

After a local disability charity criticized CCM online for long waiting times, the post was shared 3 200 times. However, many comments praised individual hub employees for understanding local customer needs.

Resource 5 — Structural options being considered by CCM

Option A: delayer by removing the regional manager level so hub supervisors report directly to the operations director.

Option B: adopt elements of Charles Handy’s Shamrock Organization: keep a smaller core workforce of master repairers and customer advisers, outsource transport and accounting, and use flexible workers during seasonal peaks.

Option C: change to a decentralized regional structure, allowing hub supervisors to choose some local suppliers, volunteer schedules and customer-priority rules within head-office guidelines.

SolarBridge Learning (SBL) – a social enterprise

Read the resources and answer the questions that follow.

Resource 1 — Background of the social enterprise

SolarBridge Learning (SBL) designs and installs small solar-powered digital classrooms for rural schools. SBL is a social enterprise: profits from commercial training contracts are reinvested into subsidized installations for schools in low-income communities. Its social objective is to improve access to education while creating skilled employment for young technicians.

SBL currently uses a functional structure with separate operations, education-content, finance, marketing and technology departments. Each department has its own manager. As demand has grown, SBL has struggled to deliver projects on time because school installations require people from several departments to work together. Some staff complain that they receive conflicting priorities from functional managers and project coordinators.

Resource 2 — Table 1: Selected project performance information for SBL

Table 1 shows selected project data for SBL, including the number of school installations, average project completion time, percentage of projects completed late, number of departments involved per project, staff turnover in project teams and estimated annual coordination costs.

Resource 3 — Quotation from a school headteacher

“The solar classroom has changed our students’ lives, but SBL’s installation date changed three times. Our community volunteers lost confidence because communication came from too many different people.”

Resource 4 — Social-media statistic

A video showing students using one of SBL’s digital classrooms reached 220 000 views and led to 46 enquiries from NGOs in four countries within two weeks.

Resource 5 — Structural options being considered by SBL

Option A: keep the functional structure but create clearer standard operating procedures for departments.

Option B: introduce a matrix structure in which staff remain in their functions but are also assigned to project managers for each school installation.

Option C: become a project-based organization, creating temporary cross-functional teams responsible for each installation from design to handover.