South-Western - Management  
Interstate Bakeries Announces Organizational Changes
Topic Managing Individuals and Teams
Key Words Matrix organizations, organizational changes, cross-functional teams
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News Story

Interstate Bakeries Corporation (IBC) announced today that it is realigning its organization in a new cross-functional matrix structure. The change is designed to focus the company more clearly on its customers, drive sustainable results, and lower its cost structure.

According to Craig Jung, chief executive officer, the old organization worked well for the company but it created too many layers for quick decision-making. Jung believes that the new structure will result in improved communication, better planning, and an increased focus on results; all of which will help IBC in the marketplace.

The company also collapsed its sales management structure, eliminating two layers of sales management and 215 sales management positions, or 5 percent of its non-union workforce.

The new organization will be built around cross-functional teams reporting to a Business Unit General Manager, but Business Unit Directors of Operations, Finance and Human Resources will report to a functional executive at headquarters, as well. The matrix will create a shared focus between headquarters and the field on key business drivers.

Questions
1.

What is a matrix organization?

2.

In what ways does IBC believe that their new organization will improve customer service and lower costs?

3.

IBC has made organizational changes in order to flatten their organization. What are the pros and cons of a flat organization?

Source “Interstate Bakeries Announces Organizational Changes,” Business Wire, Sept. 12, 2007 pNA.
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