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Chapter_9-_Yahoo_Case - Chapter 9 Designing Adaptive...

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Chapter 9 Designing Adaptive Organizations Case: Yahoo After a $100 million loss, plummeting advertising sales and stock prices, and layoffs that cost 800 employees, including the previous CEO, their jobs, one would have to ask how such a phenomenally successful company like Yahoo could have ended up in this position. One key problem was the organizational structure; with just 3,200 employees, Yahoo had 44 different business units. By comparison, General Electric, with 300,000 employees, had only 13. This left the organization unmanageable and unfocused. Department managers would focus their efforts on advancing their departments without regard for the company as a whole. Furthermore, Yahoo didn’t even have a direct sales unit. Why was this? During the peak of Yahoo’s success, they didn’t need it. Customers were throwing themselves and their advertising dollars at the company, and in an effort to optimize market share, if a company didn’t buy into Yahoo’s services, Yahoo would quickly move on.
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