Leadership is defined by authors McShane and VonGlinow (2002) in their book Organizational Behavior as, “the process of influencing people and providing an environment for them to achieve team or organizational objectives.” (p.416). As organizations move toward flatter structures and knowledge-based management in a world of increasing competition and globalization, command-and-control styles of leadership are becoming things of the past. Today’s leaders need to look closely at what motivates their workforce, how they need to provide favorable working conditions, and to involve and empower employees to achieve organizational objectives. To be effective leaders they also need to understand the informal rules of communication that exist alongside formal structures within organizations and how these rules impact work processes.
      We take a close look at “leadership in action” in this week’s simulation that bears the title of the same name. To begin with, let us describe the organizational structure of Smith & Falmouth Company or S & F.
      S & F the parent company, a tele-shopping and mail order network is influenced by industry forecasts and an internal desire to change. It creates a new e-tailing division S & F Online, which is to be its Strategic Business Unit SBU--a divisional structure where employees are grouped around geographical areas, products/services, or clients. S & F Online is an example of a client structure. It has employees grouped into two teams. The six member web development team reports to the Project Manager--PM and the three member logistics team reports to the Logistics Manager--LM. A Marketing Manager--MM serves as coordinator of product lines, marketing budgets and promotional activities. Both LM and PM report to the MM. The MM in turn reports to the COO.

      The organizational structure at S & F Online is an example of a divisional structure, also called a strategic business unit SBU. Divisional structures are one of the forms...