Question

(video transcription needed for questions)
>> No, definitely. If we had -- if when we started if we had many employees that were full-time, we definitely would not be the same today, or even possibly here. Name is Ryan Grey Smith, founder of Modern-Shed. I mean, kind of imagine, if you need to do a business organization and you want to bring it all in-house, you have to have the accounting position, you have to have the organizing position, the person that's going to answer the phones or the people that are going to make the things, and you have to have all of these positions, and you just can't do that when you start a company. It just absolutely doesn't make sense. We get busy one month. The next month, we weren't as busy, and this is the way business goes. It'll come and go like that. So really, the most logical way to start anything is to just find the people that can help you out and work out an arrangement. And so we have -- within the organization right now, we have 5, 6, 7 -- there's about 12 to 14 people, between, kind of manufacturing and the office and sales here in Seattle. Outside of Seattle we have 12 sales reps and 35 dealers across the states.

>> One of the key things that attracted me about Modern-Shed was that I was coming from the real estate industry, which has absolutely been decimated throughout the country. The company that I used to be with in fact, did sales and marketing for multi, multi-million dollar projects. That industry is going to be asleep now for about 3 to 5 years. Modern-Shed has positioned itself so that we're essentially insulated from what's going on in the general marketplace. I'm Scott, and I handle Sales Marketing with Modern-Shed. It's very interesting, that window-wall, window-wall, window-wall. We kind of changed the siding. But you heard that conversation about the corrugated?

>> Yes, yeah.

>> Eric Johnson is our fabricator, and he's actually sent up to support not only Modern-Shed, but other companies that may have a panelization component. He actually comes from the panelizing world for home builders. Well, because that industry has really fallen off because of the economy, we become a solution for Eric, because interestingly enough, Modern-Shed has not been affected by the downturn. In fact, if anything our sales are increasing. So it works out really well with the fabrication being something that's third party, offsite, and we have no financial interest in it. The dealer network is really set up to take advantage of markets that we think we've got an initial logical fit with, and so the dealers are essentially folks that also represent other products. They just aren't directly competitive to Modern-Shed, so they're complementary. Now on a monthly basis we'll actually have conference calls with the reps and the dealers about either new product, new promotions, changes in pricing, new opportunities for them in terms of their marketing. So again, it's very, very lean and unstructured because all those folks are independent contractors.

Questions:

1) As Modern-Shed grows, what is likely to happen to its organizational design?

a) It is likely to continue growing with the same organizational design that it has now.

b) It is likely to become a matrix organization.

c) It is likely to become a virtual organization.

d) It is likely to become more functional.

2) Under what conditions is the current organizational structure of Modern-Shed most likely to be effective? Check all that apply.

-In times of crisis, when everyone needs to follow a single leader

-When following a differentiation strategy for the business

-When following a low-cost leadership strategy for the business

-When the economic environment is turbulent and uncertain

3) Scott, the sales and marketing manager, says that Modern-Shed is insulated from what is going on in the general marketplace. This is partly due to Modern-Shed’s structure. By using a ________ (virtual, functional or matrix) structure, Modern-Shed is able to:

a) Bring positions in-house so that work can be more closely monitored and controlled

b) Easily expand and contract the company without assuming increased financial risk

c) Create dual lines of authority throughout the organization that respond to marketplace changes

d) Manufacture standardized products that can be sold at lower prices

Answer 1

Answer 1: it is likely to become more functional.

This has been discussed by Ryan Grey Smith, founder of Modern-Shed in the above passage where he shares his views that in the initial years of its inception, business cannot have all the functions at its place, rather it grows with the years and tend to become more functional.

Answer 2: When the economic environment is turbulent and uncertain

This has been discussed in the above passage that the narrator tells that “Modern-Shed has positioned itself so that we're essentially insulated from what's going on in the general marketplace”while the general market place was affected by economic downturn.

Answer 3: Scott, the sales and marketing manager, says that Modern-Shed is insulated from what is going on in the general marketplace. This is partly due to Modern-Shed’s structure. By using a functional structure, Modern-Shed is able to create dual lines of authority throughout the organization that respond to marketplace changes.