A division of Allentown Materials Corp. has financial and organizational problems. Conflict and lack of coordination exist between functional groups. Employees do not have a sense of direction, and morale is low. The cause of these problems is found in a change in business environment followed by changes in organization and management. A rewritten version of an earlier case. May be used with: (9-498-024) Allentown Materials Corp.: The Electronic Products Division (B).