Question

HeavyCo is a US-based manufacturer of heavy industrial machinery, including earthmovers, bulldozers, graders, etc., used primarily in the construction and civil engineering sectors. The company began operations in 1969, and has enjoyed mostly positive growth during its first 50 years, with about 90% of their revenue being generated from domestic (US) clients. In the past few years, however, sales to international customers, particularly China, Argentina and Brazil have been increasing rapidly, and now account for 10% of revenues. Overall sales for the company, including international sales, are strong, growing at about 15% annually, and are projected to continue to grow at similar rates for at least the next 6-8 years. Currently, they are organized functionally, and non-US sales have been handled by the US sales departments, with sales staff travelling to foreign locations as required. Clearly their functional and domestically oriented organizational structure needs to be updated.

As COO of the company, what changes would you make to the organizational structure? Give consideration to the impacts on organizational structure resulting from
1. their industry (industrial manufacturing).
2. their various national cultures.
3. other factors you believe are relevant.

For this question, please create

a. A list of the 4-6 most important changes to their current organizational structure, and the supporting rationale for those changes—please use the table below, adding rows as necessary.
b. Two diagrams of the organizational structure—one diagram before, and one diagram after the re-structuring, with all major functions represented. This will require some skill with the software to create the org charts in a way that’s clear and understandable—use Word to create the charts, or considering using Powerpoint, then copying and pasting the results into Word. In any case, please ensure the charts are clear and legible.

Change to Current Organizational Structure Supporting Rationale

Answer 1

Step-by-step explanation:

As the COO I will consider creating additional positions under me, one to handle the home office and another to handle the oversea office.

The home office will have the following departments under it Finance, Human Resources, Production, Sales and marketing.

Oversea office will have Production, Human Resources, Sales and Marketing. It will be located in China with highest population and more advanced infrastructure than India and Pakistan. Since the countries of China, India and Pakistan boarders each other, movement of assembled machines will be easy and cost of transportation reduced too.

I will consider developing assembly plant in China for the following reason:

1. High population in the areas will make labor cheap hence production cost will come down.

2. Employ more people from the locals who understand the culture of the area to help in the sales and production units thereby reducing the associated risks involved with such regular travels.

3. To reduce the cost of regular international travels.

I will also create sales and marketing department in India and Pakistan to handle sales and business negotiations.

Since the sales projection is on the increase and there are more prospects for future growth, oversea office will focus on increasing the company's market share by improving on the already 10% revenue from there.

Will attach the diagram for further explanation.