M: Organizational Behavior 2nd Edition by Steven McShane, Mary Von Glinow

Exercise 1

Senior management of a large multinational corporation is planning to restructure the organization. Currently, the organization is decentralized around geographical areas so that the executive responsible for each area has considerable autonomy over manufacturing and sales. The new structure will transfer power to the executives responsible for different product groups; the executives responsible for each geographic area will no longer be responsible for manufacturing in their area but will retain control over sales activities. Describe two types of resistance senior management might encounter from this organizational change.