MGT506: Venus Tyres is a major regional player in the motorcycle industry with operations in five countries in South East Asia: Leadership & Organizational Behavior Assignment, NUN, Malaysia

Venus Tyres is a major regional player in the motorcycle industry with operations in five countries in South East Asia. However, market share has been eroding due to the aggressiveness and high responsiveness of local competitors. To bring the organization to the next level, they recruited a new Managing Director (MD).

Venus Tyres is primarily a sales-driven organization and currently, the most senior person in these countries is the Sales Director who is supported by managers in support functions such as Finance, HR, and Supply Chain who report directly to their respective support function Vice Presidents (VP) who sit in the Regional Head Office.

There is only ‘dotted-line reporting’ to the Sales Directors. The major issue identified and which the new MD wishes to address is the support level given to the Sales Directors in their respective countries and how to improve it so that there are no silo thinking or bureaucratic roadblocks that may impede the Sales Directors’ ability to lead and respond to market demands faster. Currently, the Sales Directors have minimum influence in the support functions as most power lies with the respective support function VPs at the RHO.

The new MD has spoken to you, the Chief Operating Officer (COO), in confidence that she plans to change the structure of the organization from a bureaucratic, centralized function where most decisions are made at the RHO where she and the Regional function VPs sit, to a decentralized autonomous structure. She wants leaders closest to the ‘Action’ to have more authority and flexibility.

While you agree that restructuring is the right decision, where the Sales Directors will now be elevated to Country Managers, with full Profit & Loss responsibility, and all country support function managers reporting directly to him/her but ‘dotted’ to the support function VPs in HQ, you are concerned with the following crucial people challenges:

• The acceptance of the support function VPs, as there will be a loss of power and influence over their country support function managers.
• The receptiveness of the country support function managers as there will be changes in reporting lines.
• Readiness and confidence of the Sales Directors to play the new Country Manager role. They must come out of their comfort zone of leading only the Sales department and now provide leadership to the support functions as well.

Answer

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