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Executive Summary

This is the case report for an organization/adverting firm which is facing


problems in its smooth functioning because of miscommunication and
incorrect organizational structure. Aquarius advertising agency is an advertising firm
which provides business solutions for the clients in their various marketing needs. The
products of the agency include: Customized plans for the content of advertising
campaign (e.g. slogans, layouts), Complete plans for media (print and electronic
media), Marketing aid for distribution of products, and Marketing research. The
organization has number of clients and the same are named as accounts for the
organization. Each account was liaison by an account executive which is the middle
men between the creative and marketing team and the client. Now according to

organizational structure and policies each account was supposed to be managed


by an account executive through which formal communication was supposed to
pass through. Now once the communication started between the client and
creative team of the advertising agency, the two counterparts of each
organization became well understanding for each others situation and took out
their own way to function fast. This included informal communication, meeting
and teleconferences between the two counterparts without making a role for the
account executive. This miscommunication was increased to such a level that there
were differential communications between the different groups of the agency. This
widespread confusion and miscommunication led to loss of clients to the agency and
the organization suffered loss of project pipe lines and client base. This huge loss to the
agency was not tolerated by the top management and they decide to a restricting of the
organization and putting different majors in between for controlling and commanding the
employees. The restructured organization will have a training manager for training the
employees, business development VP only concentrating on developing the business of
the organization, and production teams directly managing their clients.

Introduction
An organizational structure plays an important role in the todays model organizations
and especially when the client needs are changing along with their taste for
the technology. The designing of organizational structure is very complex in nature and
needs very careful understanding of the environment needs and opportunity along with
threats from the environment. The structure needs to be so defined that it will help the
firm to be protected from any forthcoming crisis and will also help in the smooth
functioning of the present day business for which the organization is standing in the
market. The structure will also involve careful planning and execution of the horizontal
lines of control and the vertical lines of control. This is important from the managerial
perspective so that the organization can smoothly do its core business in the market.
Organization structure is very important for the growth of a firm and if failed to obtain a
correct organizational structure may even lead to collapse of the firm. In this case report
the target organization/adverting firm is facing problems in its smooth functioning
because of miscommunication and incorrect organizational structure. The organization
is an advertising firm which provides business solutions for the clients in their various
marketing needs. The organization has number of clients and the same are named as
accounts for the organization. Each account was liaison by an account executive which
is the middle men between the creative and marketing team and the client (Hobday,
1998).
According to the organizational structure and policies each account was supposed to be
managed by an account executive through which formal communication was supposed
to pass through. Now once the communication started between the client and creative
team of the advertising agency, the two counterparts of each organization became well
understanding for each others situation and took out their own way to function fast. This
included informal communication, meeting and teleconferences between the two
counterparts without making a role for the account executive. Also some of the
unstructured contacts even made the two counterparts to exchange communications,
made presentations for the client, and this lead to increased misunderstanding between
the client and the advertising agency. Now since the polices of the agency have different
rules and clauses for different course of actions, the unmanaged communications and
interactions between the two parties lead to discussions regarding the agency polices

and the agencys employees defended the policies for the agency in the clients meets
(Hill, 1998).
Now this miscommunication was increased to such a level that there were differential
communications between the different groups of the agency. There were differential and
partial communication channels created which led to delay in communication and
incorrect interpretation of the information within the organization. Even the
communication and technology levels within the organization were not uniform and
according to the policies and standards of the organization (Galbraith, 1971).
This widespread confusion and miscommunication led to loss of clients to the agency
and the organization suffered loss of project pipe lines and client base. This huge loss to
the agency was not tolerated by the top management and they decide to a restricting of
the organization and putting different majors in between for controlling and commanding
the employees.

Company Profile
Aquarius advertising agency was a middle sized firm and had following services to be offered to its
clients:

Customized plans for the content of an advertising campaign (e.g. slogans, layouts)

Complete plans for media (print and electronic media)

Marketing aid for distribution of products

Marketing research
The company has a traditional structure of organization and each client or account was managed by
an account executive that did the liaisoning between the client and the production team (creative
team and the marketing team).

Current Organizational structure


Currently the organization is structured in the traditional way. The agency is headed by board of
directors who take the updates from the president of the organization. President has his reportees
who handle different functions, which involves Legal counsel, policy committee, and the executive
vice president. The legal counsel is responsible for handling the legal issues with the organization
which may arise from time to time. The policy committee is the one which helps the president in
making the policies for the agency and thus making a legal internal environment. The executive vice
president reporting to the president is responsible for handling the core business of the organization
or the agency. The executive vice president has his/her reportees who manage different departments
of the organization. The finance of the agency is managed by the financial manager, the HR
manager take care of the HR department, client accounts are taken care by the accounts vice
president, operations vice president manages the operations function, and the marketing vice
president manages the marketing function of the organization. Now the accounts vice president has
account executives reporting to him who in turn manages individual client accounts. The operations
vice president manages the creative team of the organization, and the marketing team is managed
by the marketing vice president.

This current organizational structure may be right from the perspective that if the organization will
have to be operational in the past, but in the todays changing world and changing economy these
kinds of structures with less efficient way of management will not be practiced as this will ultimately
lead to organization wide failure (Hall, 1999).
Now, the organization or the agency have a traditional way of hierarchy and thus is uncertain in
nature in the modern times since the lines of control and the powers of the managers are contracting
to each other. Also the core function of the organization is creative department and the marketing
department, which are managed by two different vice presidents. The accounts vice president is
responsible for managing the accounts i.e. the client accounts, which is basically the business
development function of the organization.
The organization also has the confusing lines of communication between the departments and
teams, which are further deteriorated by loose line of control and loss of power by the reportees of
the president. The present organization chart is shown in detail below.
Now, this structure is responsible for the fail of the organization and loss of its clients and business,
as depicted in the below points:

Loose lines of controls in the organization

Loss of the power by the accounts vice president (This is because the creative VP and marketing VP
does not have a dotted line reporting to the accounts VP)

Miscommunication in the organization because of confusing and traditional communication lines

Non-reporting of the issue of miscommunication by the accounts executive to their boss which in turn
should have reported it to the president.

This structure of the organization had the loop holes which made the organization to fail and fall
apart because of no clear lines of control, no dotted line reporting, no organizational control, and
employee responsibility and motivation because they were controlled through promotion and work
supervision only. This led to the need of organizational restructuring.

Key Problems within the organization

The organization has the traditional hierarchy structure and organizational structure with
confused communication channels, which were the major problems of the agency. The
organization has number of clients and the same are named as accounts for the
organization. Each account was liaison by an account executive which is the middle
men between the creative and marketing team and the client.
Now ideally each account was supposed to be managed by an account executive
through which formal communication was supposed to pass through. Now once the
communication started between the client and creative team of the advertising agency,
the two counterparts of each organization became well understanding for each others
situation and took out their own way to function fast. This included informal
communication, meeting and teleconferences between the two counterparts without
making a role for the account executive. Also some of the unstructured contacts even
made the two counterparts to exchange communications, made presentations for the
client, and this lead to increased misunderstanding between the client and the
advertising agency (Lawrence, 1997).
This structure of the organization had the loop holes which made the organization to fail
and fall apart because of no clear lines of control, no dotted line reporting, no
organizational control, and employee responsibility and motivation because they were
controlled through promotion and work supervision only. This led to the need of
organizational restructuring. This also led to loose lines of controls in the organization,
loss of the power by the accounts vice president, miscommunication in the organization
because of confusing and traditional communication lines, non-reporting of the issue of
miscommunication by the accounts executive to their boss which in turn should have
reported it to the president. Now, the organization or the agency have a traditional way
of hierarchy and thus is uncertain in nature in the modern times since the lines of control
and the powers of the managers are contracting to each other. Also the core function of
the organization is creative department and the marketing department, which are
managed by two different vice presidents. The accounts vice president is responsible for
managing the accounts i.e. the client accounts, which is basically the business
development function of the organization (Lemley, 1992).
Hence the major issues with the organization are its structure, lack of proper communication,
confused lines of control, frustration in the employees, and loss of clients.

Possible new Organization Structure


The possible new structure of the organization will involve changes at the leadership level. The
detailed flow chart of the same is shown in the figure below. The board of directors will still head the
organization, to which president of the organization will report. The president will have the same
reportees which he had as in the earlier organizational chart. The change occurs at the reportees of
the executive vice president, for whom, the operations VP and marketing VP will be replaced by an
operations SVP to whom the creative VP (earlier operations VP) and marketing VP will report. So the
executive VP will now have four reportees under him/her. The finance manager will be responsible
for managing the finance of the organization; the business development team will be responsible
only for getting the business to the organization and they will not interfere with the communication
between the production team and the clients (Bennett, 1991).
Now this is very important part or the new organizational structure that the business development VP
will have his team which will work only for the enhancement of the business i.e. they will not come in
between the direct communication of the production (creative and marketing teams) and the client.
The production teams understand the requirement of the client at a better pace and hence they will
be able to assist them better if they had been allowed to communicate directly (Thompson, 1997).
Now since the communication between the client and the production team is uninterrupted, this will
lead to better and enhanced satisfaction of the clients requirements. So once the account executives
get out from between the communication channel a unified and normal flow of information will be
there between the client and the creative team.
Now to overcome the problem of misleading presentations and partial knowledge issue, the
organization will have the HR VP to whom the various HR managers will report from various
functions. The added extension and most useful part of this will be the introduction of the training HR
manager, The training manager will be responsible for training the employees of the production team
n the policies and standard of business conduct of the organization so that employees who are in
direct contact of client will be self efficient to handle and tackle the situation in all the cases. These
will also lead to better bridging the gap of communication between the two parties (Larson, 1987).
Also an added SVP for operations will be there in the organizational structure who will be responsible
for taking the reporting from Creative VP and Marketing VP who will be respectively managing their

team of creative and marketing departments. This addition of the SVP operations will add unified
flow of communication and line of command in the employees who are from the production team i.e.
who deliver the products to the clients. This will enhance their motivation and will lead to a better
understanding between the client and the agency (Clark, 1992).
The operations SVP will have Creative VP and Marketing VP who will also take dotted reporting from
the training manager, who will be responsible for training their teams on various business conduct
module and the business polices.

Conclusion

The organizational structure is as important as flow of powers in the organization. The incorrect flow
of powers and communication in the organization may lead to increased customer dissatisfaction,
losing the customer and eventually collapsing the organization. Another important virtue of
organizational structure is flow of formal and informal communication in and outside the organization.
The flow of communication is the way by which the information is transferred in the organization. If
the organization has a traditional way of operating and organizational structure this may affect the
growth often organization very negatively as in todays world the changing organization is the market
trend and organization evolve themselves according to the market trend and to meet the client
needs. The client is the market driver today and thus needs to be satisfied for which the flow of
information and communication is very important.