CHAPTER 10 | BASIC ORGANIZATIONAL DESIGN 283

 Using the organizational chart you created in the team
exercise, redesign the structure. What structural
changes might make this organization more efficient
and effective? Write a report describing what you would
do and why. Be sure to include an example of the origi-
nal organizational chart as well as a chart of your pro-
posed revision of the organizational structure.
 Steve’s and Mary’s suggested readings: Gary Hamel,
The Future of Management (Harvard Business School
Press, 2007); Thomas Friedman, The World Is Flat 3.0
(Picador, 2007); Harold J. Leavitt, Top Down: Why Hi-
erarchies Are Here to Stay and How to Manage Them
More Effectively (Harvard Business School Press,
2005); and Thomas W. Malone, The Future of Work
(Harvard Business School Press, 2004).
 In your own words, write down three things you learned
in this chapter about being a good manager.
 Self-knowledge can be a powerful learning tool. Go to
mymanagementlab.com and complete these self-
assessment exercises: How Well Do I Handle Ambiguity?
What Type of Organizational Structure Do I Prefer? Do I
Like Bureaucracy? How Good Am I at Playing Politics?
How Willing Am I to Delegate? Using the results of your
assessments, identify personal strengths and weaknesses.
What will you do to reinforce your strengths and improve
your weaknesses?

CASE APPLICATION
Ask Chuck
he Charles Schwab Corporation (Charles Schwab) is a San

T Francisco-based financial services company.43 Like many

companies in that industry, Charles Schwab struggled during
the economic recession.
Founded in 1971 by its namesake as a discount brokerage, the
company has now “grown up” into a full-service traditional broker-
age firm, with more than 300 offices in some 45 states and in
London and Hong Kong. It still offers discount brokerage services, Effective communication with cus-
but also financial research, advice, and planning; retirement plans; invest- tomers plays an important role in
Charles Schwab’s customer service
ment management; and proprietary financial products including mutual strategy. Managers of the company’s
funds, mortgages, CDs, and other banking products through its Charles offices receive daily customer feed-
back reports and empower employ-
Schwab Bank unit. However, its primary business is still making stock ees to respond quickly to customer
trades for investors who make their own financial decisions. The company concerns.
has a reputation for being conservative, which helped it avoid the financial
meltdown suffered by other investment firms. Founder Charles R. Schwab has a black bowling ball perched on his
desk. “It’s a memento of the long-forgotten bubble of 1961, when shares of bowling-pin companies, shoemakers,
chalk manufacturers, and lane operators were thought to be can’t-miss plays on the limitless potential of suburbia—
and turned out to be duds.” He keeps the ball as a reminder not to “buy into hype or take excessive risks.”
Like many companies, Charles Schwab is fanatical about customer service. By empowering front-line
employees to respond fast to customer issues and concerns, Cheryl Pasquale, a manager at one of Schwab’s
branches, is on the front line of Schwab’s efforts to prosper in a “resource-challenged economy.” Every work-
day morning, she pulls up a customer feedback report for her branch generated by a brief survey the invest-
ment firm e-mails out daily. The report allows her to review how well her six financial consultants handled the
previous day’s transactions. She’s able to see comments of customers who gave both high and low marks and
whether a particular transaction garnered praise or complaint. On one particular day, she notices that several
customers commented on how difficult it was to use the branch’s in-house information kiosks. “She decides
284 PART FOUR | ORGANIZING

she’ll ask her team for insights about this in their weekly meeting.” One thing that she pays particular attention
to is a “manager alert—a special notice triggered by a client who has given Schwab a poor rating for a delay in
posting a transaction to his account.” And she’s not alone. Every day, Pasquale and the managers at all the
company’s branches receive this type of customer feedback.

Discussion Questions
1. Describe and evaluate what Charles Schwab is doing.
2. How might the company’s culture of not buying into hype and not taking excessive risks
affect its organizational structural design?
3. What structural implications—good and bad—might Schwab’s intense focus on customer
feedback have?
4. Do you think this arrangement would work for other types of organizations? Why or
why not?

CASE APPLICATION

A New Kind of Structure

dmit it. Sometimes the projects you’re working on (school, work, or both) can get pretty boring and

A monotonous. Wouldn’t it be great to have a magic button you could push to get someone else to do that
boring, time-consuming stuff? At Pfizer, that “magic button” is a reality for a large number of employees.44
As a global pharmaceutical company, Pfizer is continually looking for ways to help employees be more
efficient and effective. The company’s senior director of organizational effectiveness found that the “Harvard
MBA staff we hired to develop strategies and innovate were instead Googling and making PowerPoints.”
Indeed, internal studies conducted to find out just how much time its valuable talent was spending on menial
tasks was startling. The average Pfizer employee was spending 20 percent to 40 percent of his or her time on
support work (creating documents, typing notes, doing research, manipulating data, scheduling meetings) and
only 60 percent to 80 percent on knowledge work (strategy, innovation, networking, collaborating, critical think-
ing). And the problem wasn’t just at lower levels. Even the highest-level employees were affected. Take, for
instance, David Cain, an executive director for global engineering. He enjoys his job—assessing environmental
real estate risks, managing facilities, and controlling a multimillion-dollar budget. But he didn’t so much enjoy
having to go through spreadsheets and put together PowerPoints. Now, however, with Pfizer’s “magic button,”
those tasks are passed off to individuals outside the organization.
Just what is this “magic button?” Originally called the Office of the Future (OOF), the renamed PfizerWorks
allows employees to shift tedious and time-consuming tasks with the click of a single button on their computer
desktop. They describe what they need on an online form, which is then sent to one of two Indian service-
outsourcing firms. When a request is received, a team member in India calls the Pfizer employee to clarify
what’s needed and by when. The team member then e-mails back a cost specification for the requested work.
If the Pfizer employee decides to proceed, the costs involved are charged to the employee’s department. About
this unique arrangement, Cain said that he relishes working with what he prefers to call his “personal consulting
organization.”
The number 66,500 illustrates just how beneficial PfizerWorks has been for the company. That’s the number
of work hours estimated to have been saved by employees who’ve used PfizerWorks. What about Joe Cain’s
experiences? When he gave the Indian team a complex project researching strategic actions that worked when
consolidating company facilities, the team put the report together in a month, something that would have taken
him six months to do alone. He says, “Pfizer pays me not to work tactically, but to work strategically.”
 CHAPTER 10 | BASIC ORGANIZATIONAL DESIGN 285

Discussion Questions
1. Describe and evaluate what Pfizer is doing with its PfizerWorks.
2. What structural implications—good and bad—does this approach have? (Think in terms of
the six organizational design elements.)
3. Do you think this arrangement would work for other types of organizations? Why or why
not? What types of organizations might it also work for?
4. What role do you think organizational structure plays in an organization’s efficiency and
effectiveness? Explain.