MasterCard International, caught in the glare of Citigroup's recent blowup with Visa, has taken the first steps toward a potentially far- reaching change in organizational structure.

Turning away from an emphasis on geographical divisions and simplifying an organization chart that had 11 people reporting to president and chief executive officer Robert W. Selander, MasterCard has reduced those direct reports and their functional responsibilities to five.

In one of the more obvious streamlinings, U.S. region president Alan J. Heuer was named one of four senior executive vice presidents and put in charge of all customer-related activities. Other regional chief executives who previously reported to Mr. Selander now report to Mr. Heuer.

Other senior executive vice presidents are: William I Jacobs, the former administrative officer, who takes charge of "strategic ventures" such as alliances and investments; Jerry McElhatton, the association's technology chief since 1994; and Christopher D. Thom, now overseeing franchise management, Mr. Jacobs' global resources functions, and deposit access products.

Mr. Thom previously had franchise management and MasterCard Canada responsibilities.

The fifth person reporting to Mr. Selander is executive vice president Michael W. Michl, the human resources and training officer who joined MasterCard last August from Avon Products Inc.

"This was the top line," MasterCard spokeswoman Sharon Gamsin said, suggesting that more changes are coming. The five division heads are "now going to be putting together the organization below that level."

The moves come almost two years after Mr. Selander rose to the top of MasterCard in an easy, business-as-usual transition from past CEO Eugene Lockhart, who moved on to BankAmerica Corp. and more recently AT&T Corp. Mr. Selander was Mr. Lockhart's international right hand and until now, most of his contrasts with Mr. Lockhart were regarded as subtle and stylistic.

Mr. Selander, Mr. Heuer, Mr. Jacobs, Mr. McElhatton, and Mr. Thom all came to MasterCard during Mr. Lockhart's two years there.

For two decades before his arrival at MasterCard in 1994, Mr. Selander worked for Citicorp-a connection that, to some observers, takes on added importance in light of the recent resignations of Citigroup co-chairman John Reed and co-chief of consumer services Robert Lipp from the Visa U.S.A. board.

Mr. Reed, who in the past directly headed Citibank retail and card units where Mr. Selander worked, pushed unsuccessfully to get Visa to change its branding policies and give Citi free reign to design the fronts of its credit cards. It is widely assumed, though not officially confirmed by the principals, that Citigroup will shift most of its Visa business to a more accommodating MasterCard and become the latter association's most powerful member.

Bank card executives and other observers were hard-pressed to interpret MasterCard's first wave of personnel moves or to put them in the context of the Citigroup machinations.

In response to inquiries from American Banker, Ms. Gamsin at MasterCard said no senior executive would be available for at least a week to elaborate on Tuesday evening's press release. She said the changes were "reviewed with the executive committee" but required no board approval.

"I wish I knew more," said one senior banker. "It sounds like a very significant change. Usually they send us a briefing document" to explain policy changes.

This executive, who asked not to be identified, expressed concern that the broadening of Mr. Heuer's responsibilities could dilute the attention paid to U.S. issuers.

Ms. Gamsin said the immediate goal is to "streamline the organization" in a way that will "focus very much on customers," meaning the member banks. While some layoffs may be a part of that, she said, "this is not meant to be an across the board cut in staff by any stretch of the imagination."

Among the open questions is what will become of the regional structure that has been a hallmark of both bank card associations for years. Ms. Gamsin said MasterCard's decisions will rest with Mr. Heuer, who joined as head of the U.S. region in May 1995, after 30 years with Marine Midland Bank and Bank of New York.

As chief of the "customers" division, Mr. Heuer will "come up with who his direct reports are going to be," Ms. Gamsin said. Among those who now fall into that category are three executive vice presidents: Jean F. Rozwadowski, overseeing Europe, the Middle East, and Africa; Andre Sekulic in Asia/Pacific; and Richard N. Child in Latin America and the Caribbean.

Other executives on the previous organizational chart who did not make the cut so far included G. Henry Mundt 3d, head of deposit access (debit) products and the Mondex electronic cash venture; and Joseph V. Tripodi, executive vice president of global marketing.

William Stewart, executive vice president of Visa U.S.A., said that the changes at MasterCard "sound like centralization to me" and that Visa, which pioneered regionalization in the early 1980s, had no intention of following suit.

Regional autonomy "delivers the least-cost and highest-value proposition," Mr. Stewart said. "We continue to put our resources, our focus, and our dollars as close to the customers as we can get them and see no need for any modification of that business model."

Mr. Stewart said MasterCard "may be reacting to the success we've enjoyed in making modifications to our organization in an evolutionary way, without ever having to be revolutionary."

"We don't know yet what the restructuring will mean," said Richard Tischler, a spokesman for Europay International, MasterCard's European affiliate. "There is no direct impact on our CEO. We are not a region of MasterCard per se," though there are interlocks between the two associations' boards.

MasterCard won some praise for a reorganization that reflected changes in the industry at large.

"It sounds like an excellent idea to focus customer-related activities in one area and to do that on a global basis," said James Shanahan, a principal of Business Dynamics Consulting Inc. and former MasterCard executive. "It shows that MasterCard is trying to restructure itself in order to be closer to the market."

Michael Auriemma, president of Auriemma Consulting Group of Westbury, N.Y., said a "natural shakeout" can be anticipated in the MasterCard employee ranks.

"I think the same kind of thing would have happened with or without the Citibank announcement," he said. "MasterCard is saying that the world is getting smaller, and if you're fragmented in your global positioning, you're in trouble."

Ms. Gamsin of MasterCard said the changes would "take people who functioned in silos and bring them together in a much more functional way."

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