The EPD division of Allentown Materials Corporation has serious problems with interfunctional conflict and coordination. These problems harm the division's performance in new product development, service, morale, and decision-making. Part of the reason for these problems could be due to declining market conditions and poor divisional performance, but there appear to be fundamental organizational problems. EPD markets have evolved due to declining government military spending. The result was increased sales in the IT, telecommunications and consumer electronics markets, which required the rapid development of competitively priced product extensions and good service not an advantage unique technology in the product. Marketing's inability to forecast and develop accurate estimates has created more uncertainty. Even though EPD operates in an uncertain environment, in terms of management and organization it is similar to Allentown which participates in many safer and more stable OEM activities where Allentown had technology. The advantage and capital requirements prevented serious competition. The division has differences between functions in terms of structure, objectives, time horizons and personal orientations of people. Market planning as a function was eliminated due to cost reduction, and product development works on projects similar to corporate R&D. There is a greater need for coordination, but there is no process in place for coordination other than the hierarchy of the organization and the decision-making of the vice president. Most of the coordination and decision making is handled at the top during monthly product development meetings, but this process is not successful due to almost 10-12 new products in the middle of paper. ..... his subordinates and other key people. He must clarify his expectations, set the tone and direction, resolve conflicts and inspire division by following through. He should develop a more receptive view of conflicts and, depending on the situation, encourage constructive conflicts. Long term… A program should be developed to identify potential project managers and consciously develop them through cross-functional work experience and various training. These trainings should not only include technical marketing and product development, but also communication and group effectiveness. If no corporate training program exists, EPD should initiate this program within its division. There should be a change in the accounting and control system, which places responsibility for gross profit at the factory. The marketing department should be like GE MDO…