Page 263 -

CHAPTER 7 • IMPLEMENTING STRATEGIES: MANAGEMENT AND OPERATIONS ISSUES 229

FIGURE 7-6
Typical Top Managers of a Large Firm

CEO

CFO CSO CIO HRM CIO COO CLO R&D CMO CTO MO

PRESIDENT PRESIDENT PRESIDENT PRESIDENT
DIVISION 1 DIVISION 2 DIVISION 3 DIVISION 4

Notes: Titles spelled out as follows.

Chief Executive Officer (CEO)
Chief Finance Officer (CFO)
Chief Strategy Officer (CSO)
Chief Information Officer (CIO)
Human Resources Manager (HRM)
Chief Operating Officer (COO)
Chief Legal Officer (CLO)
Research & Development Officer (R&D)
Chief Marketing Officer (CMO)
Chief Technology Officer (CTO)
Competitive Intelligence Officer (CIO)
Maintenance Officer (MO)

have functional staff below their top executive and often readily provide this information,
so be wary of concluding prematurely that a particular firm utilizes a functional structure.
If you see the word “president” in the titles of executives, coupled with financial-reporting
segments, such as by product or geographic region, then the firm is divisionally structured.
If the firm is large with numerous divisions, decide whether an SBU type of structure
would be more appropriate to reduce the span of control reporting to the COO. Note in
Figure 7-4 that the Sonoco Products’ strategic business units (SBUs) are based on product
groupings. An alternative SBU structure would have been to base the division groupings
on location. One never knows for sure if a proposed or actual structure is indeed most
effective for a particular firm. Note from Chandler’s strategy-structure relationship (p. 221)
illustrated previously in this chapter that declining financial performance signals a need for
altering the structure.

Restructuring, Reengineering, and E-Engineering

Restructuring and reengineering are becoming commonplace on the corporate landscape
across the United States and Europe. Restructuring—also called downsizing, rightsizing,
or delayering—involves reducing the size of the firm in terms of number of employees,
number of divisions or units, and number of hierarchical levels in the firm’s organizational
structure. This reduction in size is intended to improve both efficiency and effectiveness.
Restructuring is concerned primarily with shareholder well-being rather than employee
well-being.
Recessionary economic conditions have forced many European companies to downsize,
laying off managers and employees. This was almost unheard of prior to the mid-1990s
because European labor unions and laws required lengthy negotiations or huge severance