Question

reference organization chart 3.1:

which of the following is correct?

• to lower fixed costs, this organization should change to a divisional structure with customer account executives heading each major division.
• to improve the communications flow, it is recommended that this company should add a full-time integrator between each account executive and operations head.
• it has lost the advantages of economies of scale within the operations departments.
• the customer account executives can be considered to be integrators.

Explanation:

🆕 New Concept Discovered: Organizational Structure and Design
How companies group tasks and coordinate work.

Step 1: Analyze the current organizational structure

The organization chart shows a functional structure grouped by specialized departments under the President:

• VP Customer Accounts (with Account Exec A and Account Exec B)
• VP Operations (with Catalog/Computer Shopping, TV/Radio, and Newspaper/Magazine Production departments)
• VP Marketing (with Advertising Research and Agency Sales)

In an advertising agency with this type of functional setup, the account executives act as the primary contact point for clients. To deliver a complete campaign, they must coordinate across the different specialized operations departments (such as TV/Radio production or print production).

Step 2: Evaluate the role of Customer Account Executives

In organizational design, when specialized functional departments operate in silos, coordination can become difficult.

• Integrators are roles designed to facilitate communication, coordination, and integration across different functional departments without having formal authority over them.
• In an advertising agency, Customer Account Executives serve exactly this purpose. They manage the client relationship and coordinate work across the various functional departments (Operations, Marketing, etc.) to ensure the client's project is completed cohesively. Therefore, they function as lateral integrators within the organization.

Step 3: Evaluate the other options

• Option 1: Changing to a divisional structure with account executives heading each division would likely increase fixed costs due to the duplication of specialized operational roles in every division, rather than lowering them.
• Option 2: Adding a full-time integrator between each account executive and operations head is highly redundant because the account executives themselves already perform the integration function.
• Option 3: The operations departments are centralized under a single VP of Operations (grouped by production type), which allows the company to maintain and exploit economies of scale within those specialized production functions.

Answer:

The customer account executives can be considered to be integrators.