Over the past decade the number of COO’s in companies has gone down a substantial amount. Twitter, a major social networking company, had its COO step down and as a result they decided to divide the roles of this position to two other employees.  McDonald’s is another company who is without a COO and decided to spread the work to other people.  In most cases where companies fire their COO, it is because the COO does not agree with the plan the CEO has.  With collaboration, any goal can be reached and allow the company to be profitable. Another reason companies are ditching the role is they want to make the chain of command smaller and lower salary costs.

However, looking at the bigger picture, does every company need a COO? The answer is no. A COO is in charge of quality control, order fulfillment, employee/HR matters, and managing internal systems and business processes. In the start-up of some companies, a head person for this is not necessary. Also, once a company has established itself, there is no need for one either. This is why only 38% of the Fortune 500 companies have COO’s. There is just no need for them at times and have major costs with tasks that can be fulfilled by lower ranking managers.

There are many positions below the COO who can fulfill their duties

COO’s can play a large part in a company’s success. But with this comes a large price tag along side. Large firms must decide if this role is necessary or if it can do without and distribute its tasks among other managers.

New Source: http://www.businessweek.com/articles/2012-09-10/the-disappearing-coo-and-the-evaporating-talent-pool

Picture Source: http://www.cutter.com/content-and-analysis/resource-centers/business-intelligence/sample-our-research/biar1302/biar1302fig01.gif