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Organizational Structure: Audit & Proposal

Audit of Existing Structure

As depicted in Exhibit 1 (p. 2), Revlon utilizes a **Divisional Structure** organized by customer type, with two primary divisions: **Professional** and **Consumer**. This structure is logical for serving two distinct market channels (salons vs. mass-market retailers). However, it exhibits several weaknesses.

Key Inefficiencies Identified:

  • Lack of a COO:** The case explicitly notes that Revlon, "like about half of the Fortune 500 companies," does not have a COO (p. 2, para. 2). This forces functional heads (like the Chief Supply Chain Officer) and divisional heads to report directly to the CEO, increasing the CEO's operational burden and potentially creating reporting confusion.
  • Siloed Divisions:** The structure separates the Professional and Consumer segments, which can limit synergy. For example, innovations and trends emerging from the professional salon channel may be slow to translate into consumer products, and vice versa.
  • Unclear Reporting Lines:** The chart shows functional heads (CFO, Supply Chain) and divisional heads at the same level reporting to the CEO. This can create conflict over resources and strategic priorities, as functional departments must serve two separate divisional masters.

Proposed Organizational Structure

A **Hybrid Divisional Structure with a new Chief Operating Officer (COO)** role is proposed. This structure maintains the logical customer-based divisions but improves coordination and frees the CEO to focus on high-level strategy, which is critical given the company's performance concerns (p. 1, para. 3).

  • CEO (Lorenzo Delpani)
    • COO (New Position)
      • Global President, Professional
      • Global President, Consumer
    • CFO
    • Chief Supply Chain Officer
    • Head of HR

Justification for Proposed Changes:

  • Creates Clear Operational Leadership:** The new COO role provides a single point of leadership for the two divisional presidents, resolving ambiguity and improving coordination between the Professional and Consumer businesses. This allows the CEO to focus on the overall strategic plan needed to compete with rivals like L'Oreal and Estee Lauder (p. 1, para. 4).
  • Improves Divisional Synergy:** With both divisional presidents reporting to one COO, there is a greater opportunity to share innovations, marketing insights, and supply chain efficiencies between the two segments.
  • Streamlines CEO's Focus:** This structure clarifies reporting lines and reduces the CEO's day-to-day operational workload, enabling a greater focus on critical strategic issues like acquisitions, market positioning, and investor relations.