At the moment, Bertelsmann employ a product departmentalisation style of organisation, much like Enron, with each separate unit of business employing its own departments such as HR, IT and Payroll. In the case study, Wossner states that his goal for reinvigorating the management structure is to create more ‘cross sections’ in areas such as IT. A matrix structure could be used to achieve this. (Gomez, 2004, p. 386) describes this as, “a departmentalisation approach that superimposes a divisional structure over a functional structure” to combine efficiency and flexibility.
However, this might prove difficult in the case of Bertelsmann due to the decentralised structure, especially for staff who are geographically separated. They could get around this by using communications technology such as the Internet and video conferencing to create “virtual teams”. One IT department could manage all the individual teams, as opposed to each team having its own department. This may increase the synergy and effectiveness of the company, reducing duplication of functions and reducing costs.
Another, more contemporary theory by O’Reilly is that of an Ambidextrous Organisation (AO), one that “manages organisational separation through a tightly integrated senior team”. Studies have shown that over 90% of AO’s achieved their goals of innovation, and also when firms became AO’s in 7 out of 8 cases performance increased substantially. This could not only re-invigorate management structure but also provide a competitive advantage in an intensely competitive market.
In conclusion, decentralisation clearly has problems associated with it, but it is also a valid and effective way of organising a company. The size and type of company often has a large effect the success of decentralisation. Left unchecked, a large, growing decentralised company can become unwieldy and impossible to manage effectively. This is the problem that Bertelsmann has encountered, but it can be solved by integrating common procedures, such as communication protocols and IT structures.
These changes alone should help to reinvigorate the management structure as well as techniques such as de-layering. However, Wossner may not have the time to implement and see the results of his actions before he retires next year, especially if he encounters resistance from the workforce. This is quite possible in a company like Bertelsmann, which has such an established culture of decentralisation.