Executives at CelCorp, a major telecommunications company, are concerned that its organizational structure is ineffective.The company currently has a functional structure in which employees are grouped by specialization: manufacturing, marketing, research, administration, etc.CelCorp has manufacturing plants in six countries throughout the globe, marketing operations in several dozen countries, and research and development centers in three countries.The company makes three distinct products with approximately equal revenue: mobile telephones, satellite communication systems and Internet routers.Recommend and describe a new, more effective organizational structure for CelCorp and justify your decision.

CelCorp's current situation clearly calls for some sort of divisionalized form (or possibly a multinational matrix structure, which we discuss below).It has most likely outgrown a functional structure because it is in diverse markets.The issue that students must try to justify is which type of divisionalized form to implement.The product divisionalized structure may be appropriate because the products seem quite diverse.(Mobile telephones have different technologies and clients than Internet routers, for instance.) At the same time, there may be considerable diversity by geography.Unfortunately, we are not told whether government restrictions or market behaviors are very different across countries for routers and other products.If so, then a geographic divisionalized structure may be justified.However, some students might reasonably argue that routers are global products, so geography is less important than products.
This leads to the option of a multinational matrix structure.CelCorp might consider restructuring equally around products and regions.This would be similar to P & G's matrix structure described in the textbook.Specifically, CelCorp might overlay a geographic with a product-based divisional structure.A global product executive would be responsible for a specific product group (manufacturing and possibly sales), whereas a country or regional executive would have responsibility for all activities (sales, manufacturing) in that country.Thus, someone who leads a production facility would have two bosses - the executive responsible for the product being manufactured there and the executive responsible for activities in that country.This structure would be most appropriate where geography and products are equally diverse.If product manufacturing and sales were similar around the world, however, then a product divisionalized structure would be preferred because matrix structures can be messy.