In 2001, Jones and Shepard Accountants, Inc. (J&S) was ranked eighteenth in size by the American Association of Accountants. In order to compete with the larger firms, J&S formed an Information Services Division designed primarily for studies and analyses. By 2005, the Information Services Division (ISD) had fifteen employees.
In 2006, the ISD upgraded its computer network and purchased state-of-the-art software. With this increased capacity, J&S expanded its services to help satisfy the needs of outside customers. By September 2010, the internal and external workloads had increased to a point where the ISD now employed over fifty people.
The director of the division was very disappointed in the way that activities were being handled. There was no single person assigned to push through a project, and outside customers did not know whom to call to get answers regarding project status. The director found that most of his time was being spent on day-to-day activities such as conflict resolution instead of strategic planning and policy formulation.
The biggest problems facing the director were the two continuous internal projects (called Project X and Project Y, for simplicity) that required month-end data collation and reporting. The director felt that these two projects were important enough to require a full-time project manager on each effort.
In October 2011, corporate management announced that the ISD director would be reassigned on February 1, 2012, and that the announcement of his replacement would not be made until the middle of January. The same week that the announcement was made, two individuals were hired from outside the company to take charge of Project X and Project Y. Exhibit 3-1 shows the organizational structure of the ISD.
Figure 3-1. ISD Organizational Chart
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Within the next thirty days, rumors spread throughout the