Managerial Economics & Organizational Architecture 6th Edition by James Brickley , Clifford Smith ,Jerold Zimmerman

Exercise 22

Jan van der Schmidt was the founder of a successful chain of restaurants located throughout Europe. He died unexpectedly at the age of 55. Jan was sole owner of the company's common stock and was known for being quite authoritarian. He personally made most of the company's personnel decisions. He also made most of the decisions on menu selection, food suppliers, and advertising programs. Employees throughout the firm are paid fixed salaries and were closely monitored by van der Schmidt. Jan's son, Karl, spent his youth driving BMWs around Holland and Germany at high speeds. He spent little time working with his father in the restaurant business. Nonetheless, Karl is smart and just received his MBA degree from a leading business school. Karl has decided to follow his father as the chief operating officer of the restaurant chain. What advice about organizational architecture for the company would you offer Karl now that he has taken over