Structuring an advertising business in vietnam (an example of FPT media the corporation for financing and promoting technology)

6 1.1.2 Using contingency theory to design a structure that fits an organization’s environment 8 1.2 AUTHORITY AND CONTROL IN DESIGNING ORGANIZATIONAL STRUCTURE.. Differentiation is the

vietnam national university, HANOI hanoi school of business

Pham Vu Duc

Structuring an advertising business in Vietnam (an example of fpt media – the corporation for

financing and promoting technology)

master of business administration thesis

vietnam national university, HANOI hanoi school of business

Pham Vu Duc

Structuring an advertising business in Vietnam (an example of fpt media – the corporation for

financing and promoting technology)

Major: Business Administration

TABLE OF CONTENTS

ABSTRACT I

ACKNOWLEDGEMENTS V

TABLE OF CONTENTS VI

INTRODUCTION 1

1 BACKROUND 1

2 PURPOSE 1

3 KEY RESEARCH AREAS 2

4 METHODOLOGY 3

5CONTRIBUTIONS OF THE THESIS 4

6 OUTLINE 4

CHAPTER 1 : A LITERATURE REVIEW OF THE ORGANIZATIONAL STRUCTURE 6

1.1 BASIC CHALLENGES OF ORGANIZATIONAL DESIGN 6

1.1.1 Four basic organizational design challenges confronting managers and consultants 6

1.1.2 Using contingency theory to design a structure that fits an organization’s environment 8 1.2 AUTHORITY AND CONTROL IN DESIGNING ORGANIZATIONAL STRUCTURE 9 1.3 DESIGNING ORGANIZATIONAL STRUCTURE 14

CHAPTER 2: ORGANIZATIONAL STRUCTURE IN ADVERTISING INDUSTRY 27

2.1 OVERVIEW OF ADVERTISING INDUSTRY 27

2.1.1 History 27

2.1.2 What is media? 28

2.1.3 Objectives 30

2.1.4 Future of Advertising industry 33

2.2 O RGANIZATION STRUCTURE OF W ORLD ADVERTISING INDUSTRY 34

2.2.1 Types of Ad Agencies 34

2.2.2 Other Types of Agencies and Services 40

2.2.3 Specialized Services 42

2.2.4 Collateral Services 47

2.2.5 Organization Structure of World Advertising Industry 48

2.3 T HE ADVERTISING INDUSTRY IN V IETNAM 50

2.3.1 A Decade of Change for Advertising in Vietnam 50

2.3.2 Foreign Advertising Agencies in Vietnam 51

2.3.3 Local Advertising Agencies in Vietnam 52

2.3.4 Future of advertising industry in Vietnam 53

2.4 O RGANIZATIONAL STRUCTURE IN V IETNAM ADVERTISING COMPANY 54

CHAPTER 3: FPT CORPORATION AND FPT MEDIA INTRODUCTION 58

3.1 O FPT C 58

3.1.1 Business 58

3.1.2 Products and Services 59

3.1.3 Organizational Chart 60

3.1.4 Human Resource 61

3.1.5 Organization structure 62

3.2 FPT M EDIA INTRODUCTION 63

3.2.1 Introduction 63

3.3.2 Experience 64

3.3.3 Operations 64

3.3.4 SWOT analysis 65

3.3.5 Current structure 66

CHAPTER 4: SITUATION ANALYSIS AND RECOMMENDATION 70

4.1 SITUATION A NALYSIS 70

4.2 SUITABLE TIME FOR CHOOSING NEW ORGANIZATIONAL STRUCTURE 71

4.3 N EW ORGANIZATIONAL STRUCTURE ’ S SWOT ANALYST : 79

4.4 IMPLEMENTATION P LAN 81

4.4.1 When will we move to functional organizational structure? 81

4.4.2 Which model will be choosing to implement at this time? 83

CONCLUSION 85

REFERENCES 86

APPENDIX A WHAT IS ADVERTISING? 88

APPENDIX B LIST OF SOME BIG ADVERTISING AGENCY IN VIETNAM 90

APPENDIX C SOMETHING ABOUT ADVERTISING INDUSTRY IN VIETNAM 92

APPENDIX D TECHNIQUES IN ADVERTISING INDUSTRY 94

APPENDIX E LIST OF INTERVIEWEES 98

APPENDIX F AN EXAMPLE OF ORGANIZATIONAL STRUCTURE IN FPT CORPORATION 100

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Within scope of this thesis, I would like to study the organizational structureapplying into the advertising industry and especially Vietnam advertising company –FPT Media, a part of FPT Corporation

Purpose of the thesis will be presented in the next section

From the theory, we may found a lot of models that are studied, analyzed andapplied Each model is designed for certain types of company with its ownparticulars: number of employees, business scale and business style After eachdevelopment stage, depending on the situation, managers will decide which modelwill be chosen In some situation, managers may skip certain periods of development.They are not always successful

The advertising industry is a partial of every industry Naturally, it has some its ownparticulars which differ from all other fields Basically, the organizational structure inadvertising firms do not have big different with others but in fact, there are sometheir own customizations

After 4 month in FPT Media, I found that, with a startup company, capital, businessstrategy, human resource are important factors But the organizational structure isalso crucial An organizational structure has direct impacts on the business

FPT Media, a startup firm, belongs to a big IT corporation in Vietnam, cannot beoutside of the intersection point between organizational structure in theory (whichwere designed for all kind of companies); advertising industry (so many kind ofservices) and a Vietnam company (with its own characteristics) What is currentorganizational structure of FPT Media? Has is got any problem? If yes, how to repairit? How to make it better?

The purpose of this thesis is to:

 First, give out a systematical approach organizational structure theory;

 Third, apply this theory into practical case of FPT Media – FPT corporation

to recommend the best solutions, which will help FPT Media managers have a guide on how

to manage organizational structure effectively;

 Fourth, identify some theoretical issue of organizational structure, which can apply in advertising companies in specific environment of Vietnam

The thesis studies organizational structure theories, history and structure ofadvertising industry and finally analyzes organizational structure in this industry.Three first chapters of the thesis are researches on advertising industry and a localfirm with main objectives:

2

 To access organizational structure theories

 To assess advertising industry and organizational structure in this industry

 To assess a Vietnam firm: their organizational structure – advantage and disadvantage

4 METHODOLOGY

A lot of related documents on organizational structure theory were gathered,analyzed, compared and customized for suitable with Vietnam advertising industry.Sources of information were combined for use includes: books, internet, media, anddialogues with experts

Population and Sample

With the first survey (survey A), the author assesses organizational structure in

advertising industry and especially in Vietnam market There are about nearly 4.000advertising companies in Vietnam now As most companies are based in Ho ChiMinh City (HCMC) – most of big firms and Hanoi, we took the sample of 8companies in Hanoi and 9 others in HCMC These 17 companies are big firms (intotal of 40 biggest advertising firms in Vietnam); they cover most of the advertingmarket and they provide most of service in adverting industry This sample is typicalenough to withdraw conclusions about advertising industry and Vietnam advertisingindustry The questionnaires are delivered to one or two key persons in eachcompany

The survey B is to identify how FPT Media staff think and satisfy with their

organization Because FPT Media is a young firm so there are only more than 10

found real situation of FPT Media and their real expectation (See appendix E)

Data collections methods

A lot of data collection methods were considered Because of constraints in terms oftime, costs and human resources, a random sample from the whole population ofadvertising companies could not be obtained in this research Author has approached

17 big advertising companies in Hanoi and HCMC for the survey

For survey A, a total of 11 questionnaires were sent via email and 6 questionnaireswere sent by post Notice phone calls were made in prior and follow up 8 in total of

11 questionnaires via email were answer and usable With questionnaires by post, all

6 completed usable questionnaires were collected Author collected 14 usablequestionnaires over 17 in total

The thesis would systematically help Vietnam advertising companies – especiallyFPT Media – see what organizational structure is, the benefits and principles toeffectively build organizational structure Most importantly, the thesis has developedspecific activities, guidelines for Vietnamese advertising firms in understanding andbuilding an effective organizational structure

The thesis is divided into four chapters

 Chapter One will review basic organizational structure theories

 Chapter Two and Chapter Three are findings of the relevant issues for the advertising industry and the company in point – FPT Media

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 Chapter Four will show recommendations from the case.

CHAPTER 1

A LITERATURE REVIEW OF THE ORGANIZATIONAL

STRUCTURE

If an organization is to remain effective as it changes and grows with itsenvironment, managers must continuously evaluate they way their organizations aredesign: for example, they way work is divided among people and departments, andthe way it controls its human, financial, and physical resources Organization designinvolves difficult choices about how to control – that is, coordinate organizationaltasks and motivate the people who perform them – to maximize an organization’sability to create value1

1.1.1 Four basic organizational design challenges confronting managers and consultants.

People in organization take on new tasks as the need arises and it’s very unclear who

is responsible for what, and who is supposed to report to whom This makes itdifficult to know on whom to call when the need arises and difficult to coordinatepeople’s activities so they work together as a team

As organizations grow, manager must decide how to control and coordinate theactivities that are required for the organization to create value The principal designchallenge is how to manage differentiation to achieve organization goals.Differentiation is the process by which an organization allocates people and

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resources to organizational task and establishes the task and authority relationships that allow the organization to achieve its goals.

Organizations develop five functions to accomplish their goals and objectives2:support, production, maintenance, adaptive and managerial

- Support function: Functions which facilitate an organization’s control of itsrelations with its environment and its stakeholders Support function includes purchasing,sales and marketing, public relations and legal affairs

an organization’s conversion process so that more value is created Production functionsinclude production operations, production control, and quality control

- Maintenance function: Function which enable an organization to keep itsdepartments in operation Maintenance functions include personnel, engineering and janitorialservices

- Adaptive function: Functions which allow an organization to adjust tochanges in the environment Adaptive functions include research and development, marketresearch and long-range planning

- Managerial function: Function which facilitate the control and coordination ofactivities within and among department

An organizational role is a set of task-related behaviors required of an employee

An organization is composed of interlocking roles that are differentiated by taskresponsibilities and task authority Differentiation has a vertical and a horizontaldimension Vertical differentiation refers to the way an organization designs ithierarchy of authority Horizontal differentiation refers to the way organizationgroups roles into subunits (function and divisions)

Managers confront four design challenges as they coordinate organizationalactivities The choices they make are interrelated and collectively determine howeffectively an organization operates

Organization: Breaking the Chains of Organizational Structure New York: Jossey-Bass

a) The first challenge is to choose the right extent of vertical and horizontal.b) The second challenge is to strike an appropriate balance betweendifferentiation and integration and use appropriate integrating mechanisms.

c) The third challenge is to strike an appropriate balance between the

centralization and decentralization of decision-making authority

d) The fourth challenge is to strike an appropriate balance betweenstandardization and mutual adjustment by using the right amounts of formalization andsocialization

Differentiation is the process by which organization evolve into complex systems

as they allocate people and resources to organizational task and assign peopledifferent levels of authority

Different organizational structures cause individuals to behave in different ways.Mechanistic structures are designed to cause people to behave in predictableways Organic structures promote flexibility and quick response to changingconditions Successful organizations strike and appropriate balance betweenmechanistic and organic structures

1.1.2 Using contingency theory to design a structure that fits an

organization’s environment

Contingency approach: A management approach in which the design of anorganization’s structure is tailored to the sources of uncertainty facing anorganization Contingency theory argues that in order to manage its environmenteffectively, an organization should design its structure and control systems to fitwith the environment in which the organization operates.3

According to this theory, in order to manage its environment effectively, anorganization should design its structure to fit with the environment in which the

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organization operates In other words, an organization must design its internal structure to control the external environment.

ORGANIZATIONAL STRUCTURE

A basic design challenge is deciding how much authority to centralize at the top oforganizational hierarchy and how much authority to decentralize to middle andlowest levels4 But what determines the shape of an organization’s hierarchy – that is,the number of levels of authority within an organization – and the span of control ateach level? This question is important because the shape of an organizationdetermines how effectively the organization’s decision making and communicationsystem work Decisions concerning the shape of hierarchy and the balance betweencentralized and decentralized decision making establish the extent of verticaldifferentiation in an organization

Stakeholder goals and objectives can be achieved only when organizational skillsand capabilities are controlled through organization structure The activities oforganizational members would be chaotic without a structure that assigns people toroles and directs the activities of people and function An organization should designtheir hierarchy of authority and choose control system that creates an effectiveorganization structure The shape of hierarchy determines how decision making takesplace It also determines how motivated people will be pursuer organizational goals.Designing the hierarchy should be one of management’s major tasks

1.2.1The height of an organization’s structure is a function of the number of levels inthe hierarchy, the span of control at each level, and the balance betweencentralization and decentralization of authority

Tall organization: in which the hierarchy has many levels relative to the size ofthe organization Flat organization: the organization that has a few levels in itshierarchy relative to it size

Business Review

Figure 2.1 Flat and tall organization

As an organization grows, the increase in the size of the managerial component is less than proportional to the increase in the size of the organization

1.2.2Problems with tall hierarchies include communication, motivation, and

bureaucratic costs5

1.2.2.1 Communication

Having too many hierarchical levels may hinder communication As thechain of command lengthens, communication between managers at thetop and the bottom of the hierarchy takes longer Decision making slows,and the shutdown hurts the performance of organization that need torespond quickly to customers; needs or the actions of competitors

1.2.2.2 Motivation

As the number of levels in the hierarchy increases, the relative difference

in the authority possessed by managers at each level decrease, as doestheir area of responsibility A flat of organization has fewer managers andhierarchical levels than a tall organization, so a flat organization’smanagers possess relatively more authority and responsibility than a tallorganization’s manager

Motivation in an organization with a flat structure may be stronger thanmotivation in a tall organization

5 Gareth R Jones, “Organizational Theory, Design, and change”,Prentice Hall, 2004

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In other words, the organization should be keep as flat as possible, and managersshould be evaluated for their ability to control organizational activities with thesmallest number of managers possible An organization with a flat structure willexperience fewer communication, motivation and cost problem that will a tallorganization The only reason why a organization should choose a tall structureover a flat structure is that needs a high level of direct control or personalsupervisor over subordinates.

1.2.4The span of control is the number of subordinates a manager directly manages

Organizations that become too tall inevitably experience problems Nevertheless,

an organization that is growing must control the activities of newly hiredpersonnel; how can an organization avoid becoming too tall? One way is byincreasing managers’ span of control If the span of control of each managerincreases as the number of employee increase, then the number of manager orhierarchical levels does not increase in proportion to increases in the number ofemployees

B supervises eight people The reason is the ability of manager.

The two main factors that affect the span of control are task complexity and taskinterrelatedness

1.2.5 The shape of hierarchy and the way it works are also affected by choicesconcerning horizontal differentiation, centralization versus decentralization,differentiation versus integration, standardization versus mutual adjustment, andthe influence of the informal organization

When there are limits on the usefulness of direct personnel supervisor bymanagers, organizations have to find other ways to control their activities

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Typically, organizations first increase the level of horizontal differentiation and then decide in their responses to the design challenges.

Horizontal differentiation leads to emergence of specialized subunits – functions

or divisions

1.2.6The six principles of bureaucratic theory specify the most effective way to design the hierarchy of authority in an organization

- A bureaucracy is founded on the concept of rational-legal authority

- Organizational roles are held on the basic of technical competence not

because of social status, kinship or heredity

- A role’s task responsibility and decision-making authority and its relationship

to other roles in the organization should be clearly specified

- The organization of roles in a bureaucracy is such that each lower office in the hierarchy is under the control and supervision of higher office

- Rules, standard operating procedures and norms should be used to control the behavior and relationships among roles in an organization

- Administrative acts, decisions and rules should be formulated and put in writing

Bureaucracy has several advantages It is fair and equitable, and it can promoteorganization effectiveness by improving organizational effectiveness by improvingorganizational design

1.2.7Managers need to recognize how the informal organization affects the way theformal hierarchy of authority works and make sure the two fit to enhanceorganizational performance

The hierarchy of authority designed by management that allocates people andresources to organizational task and roles is a blueprint for how things aresupposed to happen However, at all levels in the organization, decision makingand coordination frequently take place outside the formally designed channels aspeople interact informally on the job Moreover, many of the rules and norms

that employees use to perform their task emerge out of informal interactionsbetween people and not from the formal blueprint and rules established bymanagers Thus, while establishing a formal structure of interrelated roles,managers are also creating an informal social structure that affects behavior inways that may be unintended.

1.2.8 To keep their organizations as flat as possible managers are increasinglymaking use of IT and creating self-managed work teams of empowered workerand/or turning to contingent workers

Designing organizational structure is a difficult and challenging task Managers have

to manage the vertical and horizontal dimensions of the structure continually andchoose an appropriate allocation of authority and task responsibilities As anorganization grows and becomes complex, changing its structure to respond tochanging needs or contingencies become important

Designing a structure that fit a company’s need is a large challenge Each structurehas advantages and disadvantages, and managers have to be ready and willing toredesign the organization in order to obtain the advantages and anticipate andminimize the problems of whichever structure they choose An organization that is incontrol of it structure has an important competitive advantage over one that is not.Many organizations ignore the coordination problems inherent in the organizingprocess Too often, an organization waits until it is already in trouble (in decline)before attempting to deal with coordination and motivation problems Thecharacteristic of the top manager team are very important in this regard because theydetermine how decision get make and how top managers perceive the problems theorganization is experiencing

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1.3.1A functional structure is a design that groups people because they have similar

skills or use the same resources Functional groups include finance, R&D,

marketing, and engineering All organizations begin as functional structures.6

CEO

Admin

This model provides people with the opportunity to learn from another andbecome more specialized and productive When people with skills incommon are assembled into a function group, they can learn the best way tosolve the problems, or the most efficient techniques for performing a task,from one another

Another advantage of functional structure is that people who are groupedtogether by common skills can supervise one another and control each other’sbehavior The final advantage, people in a function who work closely witheach other over extended time periods develop norms and values that allowthem to become more effective at what they do

1.3.2 An organization need to adopt a more complex structure when it starts to

produce many products or when it confronts special needs, such as the need to

produce new products quickly, to deal with different customer groups, or to

handle growth into new regions7

1.3.3 The move to a new complex structure is based on three design choices:

increasing vertical differentiation, increasing horizontal differentiation, and

increasing integration.8

2004, p.160

8 Gareth R Jones, “Organizational Theory, Design, and change”,Prentice Hall, 2004.

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1.3.3.1 Increasing vertical differentiation: To regain control in a verticaldirection, the organization needs to increase vertical differentiation Thistypically involves:

the organization

and hence exert control over low-level employees

1.3.3.2 Increasing horizontal differentiation: To regain control in a horizontaldirection, the organization needs to increase horizontal differentiation Thisinvolves overlaying a functional grouping with some other kind of submitgrouping – most often, self-contained product terms or product divisions thatprocess all the function resource they need to meet their goals

Horizontal

Figure 2.4 Vertical and horizontal differentiation

1.3.3.3 Increasing integration: To regain control in both vertically andhorizontally, the organization needs to increase integration between subunits.The higher the level of differentiation, the more complex the integratingmechanisms that an organization needs in order to control its activities

1.3.4Most organizations move from a functional structure to some kind of divisionalstructure: a product structure, a geographic structure, or a market structure.9

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The structure that organizations most commonly adopt to solve the controlproblems that result from producing many different kinds of products in manydifferent locations for many different type of clients is the divisionalstructure A divisional structure groups functions according to the specificdemands of products, markets, or customers The goal behind the change to adivision structure is to create smaller, more manageable submits within anorganization The types of divisional structure managers select depend on thespecific control problem to be solved:

 If the control problem is due to the number and complexity ofproducts, the organization will divide its activities by product and use a product structure

organization products and sells its products, the organization will divide its activities beregion and use a geographic structure

different customer groups, the organization will divide its activities by customer group anduse a market structure

1.3.5There are three kinds of product structure: product division structure,

multidivisional structure, and product team structure.10

1.3.5.1.Product division structure is used when an organization produces broadlysimilar products that use the same set of support functions

Figure 2.5 Product division structure

2004.

1.3.5.2.Multidivisional structures are available to organizations that are growing

rapidly and producing a wide variety of products or are entering totally

different kinds of industries

Figure 2.6 Multidivisional structure

CEO

Corporate Headquarters Staff

Corporate

Each division is dependent and has its own set of support functions.The corporate headquarters staff oversees the activities of thedivisional managers, and there are three levels of management:corporate, divisional and functional.

In a multidivisional structure, each product division is a self-contained

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division with the operating structure that best suits it needs A centralheadquarters staff is responsible for coordinating the activities of thedivision in the organization When a lot of coordination betweendivisions is required, a company can use a multidivisional matrixstructure.

Figure 2.7 A Multidivisional structure in which division has a

different structure

CEO

Corporate Headquarters Staff

Senior Vice President Senior Vice President Senior Vice President Senior Vice President Marketing Financial Materials Research & Development

Functional Groups Functional Groups

Functional Groups

Functional Structure Product Division Structure

Matrix Structure

Advantages of the multidivisional structures:

Disadvantages of the multidivisional structures:

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 Communication problems

1.3.5.3.Product team structure put the focus on the product being the produced

Teams of functional specialists are organized around the product to speedproduct development

Figure 2.8 Product team structure

CEO

Functions

Senior Vice President Senior Vice President Senior Vice President Senior Vice President

Product Development Teams

PTM : Product Team Manager

Each product team manager (PTM) supervises the activities associated with developing and manufacturing a product

1.3.6Geographic structures are used the organizations expand into new areas or

begin to manufacture in many different locations.11

This is one of three types of product structure, the multidivisional structure isthe one most often used by large organizations It provides the extra controlthat is important then a company produces a wide array of complex products

or services or enters new industries and needs to deal with different sets ofstakeholders and competitive forces However, when the control problemsthat the companies experience are a function of geography, a geographicdivision structure, in which divisions are organized according to therequirements of the different locations in which an organization operates, is

11 Richard H Hall, and Pamela S Tolbert, 1999 Organizations: Structures,

Processes, and Outcomes (4th Edition), Prentice Hall Gareth R Jones, “Organizational

Theory, Design, and change”,Prentice Hall, 2004.

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Figure 2.9 Geographic structure

Regional Operations

CEO Regional

functions

Regional Operations Individual stores

1.3.7Market structures are used when organizations wish to group activities to focus

on the need of distinct customer groups.12

Each customer group has a different marketing focus, and the job of eachgroup is to develop products to suit the needs of its specific customers Eachgroup makes use of centralized support functions

Figure 2.10 Market structure

Processes, and Outcomes (4th Edition), Prentice Hall Gareth R Jones, “Organizational

Theory, Design, and change”,Prentice Hall, 2004.

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1.3.8Matrix structures group activities by function and product They are a special

kind of structure that is available when an organization needs to deal with new or

technically sophisticated products in rapidly changing markets.13

Figure 2.11 Matrix structure

CEO

Vice president Product manager

Production team

Designing Organizations to Create Value: From Strategy to Structure New York:

McGraw-Hill Gareth R Jones, “Organizational Theory, Design, and change”,Prentice

Hall, 2004.

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An organization with a matrix structure is differentiated into whateverfunctions the organization needs to achieve its goals The organization itself

is very flat, having minimal hierarchical levels within each function anddecentralization authority Functional employees report to the heads of theirrespective functions but do not work under their direct supervision Instead,the work of functional personnel is determined primarily by membership inone of several cross-functional product teams under the leadership of aproduct manager The members of team are called two-boss employeebecause they report to two supervisors: the product team manager andfunctional manager

Both matrix structure and product team structure make use of teams tocoordinate activities, but they differ in two major respects

product team manager Team members in a matrix structure have two boss – the productmanager and the functional managers

move from team to team, to where their skills are most needed

Advantage of matrix structure:

functional barriers and overcome the problem of submit orientation

provides an opportunity for team members from different functions to learn from one anotherand develop their skills

iii) The matrix enables an organization to maximize it use ofskilled professionals, who move from product to product as needed

both cost and quality

Disadvantage of matrix structure:

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i Lacks the advantage of bureaucratic structure With a flathierarchy and minimal rules and SOPs, the matrix lacks a control structure that leadsemployee to develop stable expectations of one another.

lead to conflict between functions and product teams over the use of resources

flexibility

1.3.9 Network structures are formed when an organization forms agreements orcontracts with other organizations to perform specific functional value creationactivities

Advantage of network structures:

perform a specific functional activity reliably and at a lower cost, production cost are reduced

to perform specific value creation activities, it avoids the high bureaucratic cost of operating acomplex organizational structure

been that the organizations gain access to low-cost foreign sources of inputs and functionalexpertise, something crucial in today’s changing global environment

CHAPTER SUMMARY

If an organization is to remain effective as it changes and grows with itsenvironment, managers must continuously evaluate the way their organizations aredesign There are four basic organizational design challenges confronting managersand consultants:

24

- How to choose the right extent of vertical and horizontal

differentiation

integration and use appropriate integrating mechanisms

decentralization of decision-making authority

- How to strike an appropriate balance between standardization andmutual adjustment by using the right amounts of formalization and socialization

Designing organizational structure is a difficult and challenging task Managers have

to manage the vertical and horizontal dimensions of the structure continually andchoose an appropriate allocation of authority and task responsibilities As anorganization grows and becomes complex, changing its structure to respond tochanging needs or contingencies become important

is a design that groups people because they have similar skills or use the same resources

- After the startup time, most organizations move from a functionalstructure to some kind of divisional structure: a product structure, a geographic structure, or amarket structure Each kind of divisional structures has some sub-kind models Each thesemodels has its own particulars and was designed base on the real situation of each company

After review theory, we will

- Discover the advertising industry (in the next chapter): identifyspecific characteristics, history and the organization structure model This study will allow ushave a brief understanding about advertising industry and some of the most frequentlyapplying organization structure model

corporation and also have SWOT analysis their current situation

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- After that, merging general theory with industry’s characteristics andcompany’s situation, we will choose the best organization structure model for FPT Media.

CHAPTER 2 ORGANIZATIONAL STRUCTURE IN ADVERTISING

INDUSTRY

In this chapter, we will discover the advertising industry (in the world and inVietnam) This study will allow us have a brief understanding about advertisingindustry and some of the most frequently applying organization structure model

2.1 OVERVIEW OF ADVERTISING INDUSTRY

Generally speaking, advertising is the promotion of goods, services, companies and

ideas, usually by an identified sponsor Marketers see advertising as part of an overallpromotional strategy Other components of the promotional mix include publicity,

public relations, personal selling and sales promotion14

2.1.1 History15

In ancient times the most common form of advertising was 'word of mouth'.However, commercial messages and election campaign displays were found in theruins of Pompeii Egyptians used papyrus to create sales messages and wall posters.Lost-and-found advertising on papyrus was common in Greece and Rome Asprinting developed in the 15th and 16th century, advertising expanded to include

Principles and Practice (3rd Edition) New Jersey: Prentice Hall

services industry.

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handbills In the 17th century advertisements started to appear in weekly newspapers.

These early print ads were used mainly to promote books (which were increasinglyaffordable) and medicines (which were increasingly sought after as disease ravagedEurope and Britain) Quack ads became a problem, which ushered in regulation ofadvertising content

As the economy was expanding during the 19th century, the need for advertisinggrew at the same pace In America, the classified ad became popular, filling pages ofnewspapers with small print messages promoting all kinds of goods The success ofthis advertising format led to the growth of mail-order advertising In 1843 the firstadvertising agency was established by Volney Palmer in Philadelphia At first theagencies were just brokers for ad space in newspapers, but by the 20th century,advertising agencies started to take over responsibility for the content as well

The 1960's saw advertising transform into a modern, more scientific approach inwhich creativity was allowed to shine, producing unexpected messages that madeadvertisements interesting to read The Volkwagen ad campaign featuring suchheadlines as "Think Small" and "Lemon" ushered in the era of modern advertising bypromoting a "position" or "unique selling proposition" designed to associate eachbrand with a specific idea in the reader or viewer's mind

Today, advertising is evolving even further, with "guerrilla" promotions that involveunusual approaches such as staged encounters in public places, giveaways ofproducts such as cars that are covered with brand messages, and interactiveadvertising where the viewer can respond to become part of the advertising message

2.1.2 What is media?

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