Product and Marketing Divisions
As shown in the partial organization chart in Exhibit 1, Abram had a "product division" for each of its three part groups. Each of these product divisions was managed by a vice president and general manager who was expected to earn a target return on investment (ROI). Each product division manufactured parts in several plants and sold a major portion of its manufactured parts to OEMs. Each product division had its separate OEM sales department (see Exhibit 1) that worked closely with OEMs to develop new products or change existing products. The renaming manufactured parts were sold by the product division to Abrams's fourth division, called the AM Marketing Division (see Exhibit 1) or "AM Division," as it was known to managers. This division was also managed by a vice president and general manager and was responsible for marketing Abrams's entire line of a parts to AM wholesalers. The AM division operated several company-owned parts distribution warehouses in the US and foreign markets The AM division was also expected to earn an annual return on investment target.