Page 11 - CIMA SCS Workbook August 2018 - Day 2 Suggested Solutions

CIMA AUGUST 2018 – STRATEGIC CASE STUDY

This functional structure will allow for clear areas of responsibility to be created and the
associated accountability. It also allows people with specialist skill sets to focus on their own areas
of expertise, and so should result in efficiency and economies of scale.

However, Allied Investment’s concerns are not without merit. The latest annual report states a
commitment to growing revenues from digital news, which would suggest that IT is going to have
an increasingly important role to play in the organisation. However, there is no separate IT
function, headed up by a Director of IT; at present our structural chart would suggest that such
matters are looked after by an IT manager who reports into yourself as the CFO.

Allied would probably argue that IT is now of such strategic importance to FNG that it merits
having its own presence at the Executive level of management in the company. As FNG becomes
more IT focused and looks to leverage opportunities presented by digital platforms, a Director
with the relevant expertise should be present to consider the company’s strategic IT needs and
make the reasoned case for investment in hardware, software, controls, and so on. I would
therefore suggest that such an extension to the current Board be appointed.

It could also be argued that, whilst selling advertising and access to news titles is what the
business is about, there is significant difference between printed newspapers and digital copy.
This is especially true in the area of advertising; whilst the same stories inevitably appear in print
and on screen, the means of selling a marketing message can vary significantly. For example, a
printed advert is one-dimensional, but a digital advert can include video, sound, graphics, and so
on, and therefore is likely to require a different skills set to appeal to those looking to commit
their marketing budget.

It is therefore recommended that a more divisional or even matrix structure be adopted. This
could take the form of traditional print and digital activities being set up as separate divisions, but
with flexibility in the structure so that the commonalities between the two can still take place. For
example, writing of news stories and editorial controls are required for both aspects, and FNG
does not want to have to repeat processes unnecessarily. Equally, the local presence brought
about by the regional divisions (and the local knowledge of the regional managing directors) must
be retained.

Clear thought should be given as to how such flexibility can be built in before the meeting with
Allied, and a new structural chart established in diagram form to enable them to understand and
appreciate the changes being made.

70 KAPLAN PUBLISHING