Study questions: 1. What are the major assumptions and concepts of the structural frame?

The structural frame upholds the notion that organizations are judged primarily on and by the proper functioning of those elements which constitute good organization. For the greater part of the 20th century, the assumptions and concepts of scientific management have informed most theories of practice.

One of the earliest precursors of scientific management is Max Weber, hired by Frederick the Great to reorganize the Prussian Army, who conceived the “monocratic bureaucracy” as an ideal form that maximized norms of rationality. His model outlined several major features which include:

* A fixed division of labor * A hierarchy of offices * A set of rules governing performance * A separation of personal from official property and rights * The use of technical qualifications (not family ties or friendship) for selecting personnel * Employment as primary occupation and long-term career

But, if Max Weber “rationalized” the bureaucracy, Frederick Winslow Taylor “hyper-rationalized’ the bureaucracy. Known as the “father” of scientific management”, he sought an objective, scientific mechanism to improve organizational functioning. Based on these two principal intellectual roots, there are six assumptions of the structural frame:

* Organizations exist to achieve established goals and objectives * Organizations increase efficiency and enhance performance through specialization and appropriate division of labor * Suitable forms of coordination and control ensure that diverse efforts of individuals and units mesh * Organizations works best when rationality prevails over personal agendas and extraneous pressures * Effective structures fit an organization’s current circumstances ( including its goals, technology, workforce, and environment) * Troubles arise and performance suffers from structural deficits, remedied through problem solving and restructuring

2. What changes in its industry and customers were affecting Campbell & Bailyn in 2007?

There was a meltdown in the mortgage-backed securities market that had negatively affected the financial world. This international crisis has been triggered by the collapse of billions of dollars worth of mortgage-backed securities has left the sales force of C & B with a huge task of helping customers minimize their losses on their bond portfolios.

The industry has also undergone dramatic changes prior to the meltdown in 2007. There has been a dramatic increase in new competitors and products and many segments of the fixed income brokerage industry has seen margins narrow drastically due to the entrance of low-service, low-priced brokers.

This resulted in sales commissions at brokerage firms being flattened out even though assets under management client companies grew rapidly as the baby-boomers began to save. One exception of these would be a few fast-growing, high-margin segments. These newer products, such as futures and options, sold at higher margins but also required considerably more expertise to market and sell. Customers themselves were becoming more specialized, as portfolio managers relied increasingly on the advice of in-house analysts.

Bond salespeople were also difficult to recruit since the successful ones were outgoing, extremely self-motivated, and street smart. These salespeople invested years in building up key customer relationships, and they nurtured those relationships through social interaction outside of the traditional work environment.

3. What were the strengths and weaknesses of the C & B brokerage division prior to the changes described in the case?

1. In the light of the changes in the marketplace, was creating KAT a good idea? If not, what should Ken Winston have done?