American Express is not just a major credit card company. It is an international financial services powerhouse with several businesses scattered around the world. Being such a large company means that they must constantly change to keep up with the rest of the business environment and remain competitive. A recent overhaul of the American Express Financial Advisor's division was the latest change. Until recently, the company was organized in a functional design. Clear chains of command and a network of rules and procedures guided most of the firm's activities.
             Concerned about backlashes from customers, and Internet based competitors, AEFA decided to overhaul their entire business approach. A new organization design was implemented to promote flexibility and responsiveness, much unlike the previous structure. This, in turn, let the many responsibilities of the organization be spread throughout the mangers. Every manager has a specific responsibility.
             The reorganization has worked efficiently so far, however the new design is not perfect. This type of structure potentially hampers AEFA from expanding and becoming an international power.
             Compare and contrast AEFA's new and old organization designs.
             The old design was consistent with that of a bureaucratic model. There was a formal system of authority. It worked because most other companies used the same model, yet when new technology surfaced, and newer companies arose, a change was needed. The new system is similar to the behavioral model, more specifically a Matrix design. It involves more human relations and inter-personal processes, unlike the old design.
             What are the advantages and disadvantages of the old and new organization designs?
             The old design was a clear chain of command with rules and procedures, while the new design spread the responsibility throughout the firm. This puts more attention on motivation, leadership, communication, interacti
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