{"id":234,"date":"2017-07-26T19:48:11","date_gmt":"2017-07-26T19:48:11","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-principlesofmanagement\/?post_type=chapter&p=234"},"modified":"2017-08-18T23:42:06","modified_gmt":"2017-08-18T23:42:06","slug":"putting-it-together-organizational-structures","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wmopen-principlesofmanagement\/chapter\/putting-it-together-organizational-structures\/","title":{"raw":"Putting It Together: Organizational Structures","rendered":"Putting It Together: Organizational Structures"},"content":{"raw":"

\"The<\/h2>\r\n

Back to IBM Credit Corporation<\/h2>\r\nLet\u2019s return to our case study of IBM\u2019s credit arm that we considered at the outset of this module. You\u2019ll recall that credit applications could take six days to several weeks to be processed, during which time sales were being lost to competitors. So what did IBM do?\r\n\r\nTwo senior managers with the company decided to follow a credit application throughout the entire process. When they did, they were surprised to discover that the actual processing time for each application was only ninety minutes! It quickly became evident that the delays were not a result of the amount of work that needed to be completed. Instead, it was a function of the structure the company had implemented. Each step in the approval process was routed to a different specialist to be completed.\r\n
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Step 1<\/td>\r\nCentral office operator receives a finance request from a salesperson and records it on an input form \u2192 form is routed to the credit department<\/td>\r\n<\/tr>\r\n
Step 2<\/td>\r\nCredit specialist reviews the customer and makes a credit decision \u2192 result is recorded on the form, which is routed to the business practices department<\/td>\r\n<\/tr>\r\n
Step 3<\/td>\r\nBusiness practices approves any customer-requested changes to the standard loan covenants \u2192 changes are noted on the form and it is sent to the pricing department<\/td>\r\n<\/tr>\r\n
Step 4<\/td>\r\nPricing specialist determines the appropriate rate to charge based on the customer\u2019s credit and specific loan covenants \u2192 form moves to the administration department<\/td>\r\n<\/tr>\r\n
Step 5<\/td>\r\nAdministration specialist turns all information recorded on the form into a quote letter \u2192 quote letter is routed to the sales specialist for delivery to the customer<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\nBased on what you learned in this module, how would you describe IBM Credit\u2019s organizational structure? Thinking back to Schein\u2019s four key elements of an organization, where do you see opportunities for improvement?\r\n