Organising
Chapter 5
Very Short Answer Type:
1. Identify the network of social relationships which arises spontaneously due to interaction at work.
Ans: The network of social relationships arising spontaneously at work can be identified as an informal work network.
These networks are characterized by:
*Natural formation: They emerge organically through shared experiences, interactions, and personal connections rather than through formal structures or directives.
*Unspoken rules: Relationships within the network operate based on implicit norms, trust, and shared understanding rather than defined procedures.
*Mutual benefits: They offer valuable informal support, information exchange, and influence that can impact career development and productivity.
*Cross-functional nature: These networks often connect individuals across various departments or hierarchical levels, bridging communication gaps and fostering collaboration.
Examples of informal work networks include:
*Project teams: Close collaboration on specific projects often builds strong bonds and shared understanding.
*Watercooler groups: Casual interactions during coffee breaks or around water coolers can spark connections and information exchange.
*Mentorship relationships: Informal mentor-mentee pairings based on mutual trust and interest can provide valuable guidance and support.
2. What does the term ‘Span of management’ refer to?
Ans: The term "span of management" refers to the number of subordinates or direct reports that a supervisor or manager is responsible for. In simpler terms, it's the size of a manager's team.
A wider span of management means a single manager supervises more people, while a narrower span indicates fewer direct reports. The ideal span can vary depending on factors like the complexity of the work, the manager's experience, and the organization's structure.
3. State any two circumstances under which the functional structure will prove to be an appropriate choice.
Ans: Two circumstances where a functional structure can be highly effective:
1. Large size and diverse activities:
*For organizations with a significant number of employees and a wide range of functions (e.g., manufacturing, sales, marketing, finance), a functional structure provides clear division of labor and expertise.
*Grouping employees based on specific functions enhances specialization and efficiency, as individuals gain deep knowledge and skills within their designated areas.
*This centralized expertise facilitates better control and coordination within each department, resulting in streamlined operations and improved performance.
2. Need for high specialization:
*When the nature of work demands specialized skills and knowledge in specific areas (e.g., research and development, engineering, legal), a functional structure fosters the development of deep expertise within departments.
*Grouping individuals with similar skillsets creates an environment conducive to knowledge sharing, innovation, and problem-solving within each specialized function.
*This focus on specialization allows the organization to stay competitive and attract top talent in specific fields.
4. Draw a diagram depicting a functional structure.
Ans: Functional Structure Diagram
Here's a simple diagram depicting a functional structure:
In this diagram:
*The CEO sits at the top, overseeing the entire organization.
*Each major function (Sales, Marketing, Finance, Operations) is represented by a box directly below the CEO.
*Each function has a manager responsible for leading and directing activities within that department.
*The manager's team consists of individual employees with specific roles within the function (e.g., sales reps, marketing specialists, accountants, production workers).
This is just a basic example, and the specific functions and levels can vary depending on the size and complexity of the organization.
5. company has its registered office in Delhi, manufacturing unit at Gurgaon and marketing and sales department at Faridabad. The company manufactures the consumer products. Which type of organisational structure should it adopt to achieve its target?
Ans: Function.
Short Answer Type:
1. What are the steps in the process of organising?
Ans: Here are the key steps in the process of organizing:
1. Identify and divide work: Break down overall tasks into manageable activities.
2. Departmentalize: Group similar activities into departments for efficiency.
3. Assign duties: Allocate tasks to individuals based on skills and expertise.
4. Establish reporting relationships: Define communication channels and hierarchy.
5. Coordinate efforts: Ensure smooth collaboration between departments and individuals.
6. Delegate authority: Grant appropriate decision-making power to different levels.
7. Monitor and adapt: Continuously assess effectiveness and adjust the structure as needed.
2. Discuss the elements of delegation.
Ans: Delegation thrives on three key elements:
1. Assignment of Responsibility: This involves clearly defining the task or project being delegated to the subordinate. The scope, expectations, and desired outcome should be explicitly communicated.
2. Grant of Authority: The delegator provides the subordinate with the necessary power and resources to complete the task effectively. This might include decision-making authority, budgetary control, or access to relevant information.
3. Creation of Accountability: Both the delegator and the subordinate have roles in accountability. The subordinate is responsible for achieving the desired outcome, while the delegator remains ultimately accountable for the overall success of the delegated task.
These elements work together to ensure successful delegation. While assigning responsibility, consider the subordinate's skills and experience. Granting enough authority allows them ownership and empowers them to make informed decisions. Creating clear accountability fosters a sense of commitment and ensures results are tracked and evaluated.
3. How does informal organisation support the formal organisation?
Ans: Informal organizations can support formal organizations in several ways:
Faster Communication: Informal networks bypass rigid channels, allowing quicker information flow and problem-solving.
Enhanced Collaboration: Shared working spaces and social interactions foster teamwork and cross-departmental cooperation.
Increased Morale and Motivation: Social connections and peer support boost employee engagement and loyalty.
Flexibility and Innovation: Unbound by formal rules, informal groups can test new ideas and adapt to changing situations.
Early Warning System: Informal feedback through gossip or shared concerns can alert management to potential problems.
However, balancing informal and formal structures is crucial. Overreliance on informal networks can lead to favouritism or bypassing procedures.
4. Can a large sized organisation be totally centralised of decentralised? Give your opinion.
Ans: No, a large-sized organization cannot be completely centralized or decentralized due to the inherent limitations of each approach:
Complete Centralization:
*Bottlenecks and slow decision-making: All decisions rely on a small group at the top, creating delays and inefficiency, especially as the organization grows.
*Lack of local responsiveness: Employees furthest from central management might struggle to adapt to local market changes or customer needs.
*Demotivation and disengagement: Lower-level employees may feel powerless and unmotivated with limited decision-making autonomy.
Complete Decentralization:
*Loss of cohesion and control: Individual units might pursue conflicting goals, weakening brand consistency and overall direction.
*Resource duplication and inefficiencies: Decentralized units could redundantly acquire resources or develop similar solutions, wasting resources.
*Difficulty maintaining quality standards: Centralized quality control mechanisms might be missing, leading to inconsistencies across units.
Therefore, most large organizations adopt a hybrid structure balancing centralization and decentralization. This could involve:
*Centralized core functions: Strategic decision-making, finance, marketing, and IT might remain centralized for consistency and control.
*Decentralized operations: Manufacturing, sales, and local marketing decisions might be delegated to regional or departmental units for responsiveness and flexibility.
The optimal balance depends on factors like the company's size, industry, geographic spread, and strategic goals.
5. Decentralisation is extending delegation to the lowest level Comment.
Ans: You're absolutely right! Decentralization does indeed extend delegation to the lowest level. Here's a breakdown of why:
*Delegation: Transferring authority and responsibility from one level to another within an organization.
*Decentralization: Distributing the decision-making power throughout various levels of the organization, with increasing autonomy granted to lower levels.
Therefore, decentralization takes delegation further by extending it beyond immediate superiors and subordinates. It empowers individuals at all levels to make decisions and take ownership of their work, pushing responsibility and authority closer to the point of action.
Here are some additional comments on your statement:
*Benefits of decentralization: Increased responsiveness, improved motivation, enhanced learning, and faster decision-making are just some advantages of granting autonomy to lower levels.
*Challenges of decentralization: Effective communication, coordination, and accountability become crucial with a decentralized structure. Clear guidelines and performance measures are necessary to prevent chaos and ensure alignment with overall goals.
*Degrees of decentralization: Organizations can adopt different levels of decentralization, depending on their needs and context. Some delegate only specific tasks, while others fully empower local units to manage their operations.
6. Neha runs a factory wherein she manufactures shoes. The business has been doing well and she intends to expand by diversifying into leather bags as well as western formal wear thereby making her company a complete provider of corporate wear. This will enable her to market her business unit as the one stop for working women. Which type of structure would you recommend for her expanded organisation and why?
Ans: I recommend a divisional structure for Neha's expanded organization. Here's why:
Benefits of a divisional structure for Neha's case:
*Specialization: Separate divisions for footwear, leather bags, and formal wear can each develop expertise in their respective markets and product lines.
*Focus and clarity: Each division can have its own dedicated management team, marketing efforts, and sales strategies, fostering clear focus and accountability.
*Market responsiveness: Divisions can tailor their offerings and operations to specific customer segments (working women) and react quickly to market trends.
*Growth potential: The structure easily allows for further diversification or expansion into new product lines within existing divisions.
*Efficiency: Shared support functions like HR, finance, and IT can minimize redundancy and optimize resource allocation.
Comparison with other structures:
*Functional structure: While efficient for standardized products, it might become rigid and unresponsive to diverse product lines and customer segments.
*Matrix structure: Can introduce complexity and confusion with dual reporting lines, especially in a company still undergoing expansion.
Remember:
*The success of any structure depends on proper implementation and clear communication across divisions.
*Neha might need to adapt the structure as her business grows and evolves.
7. The production manager asked the foreman to achieve a target production of 200 units per day, but he doesn’t give him the authority to requisition tools and materials from the stores department. Can the production manager blame the foreman if he is not able to achieve the desired target? Give reasons.
Ans: No, the production manager cannot blame the foreman for not achieving the target of 200 units per day if he didn't give him the authority to requisition tools and materials. This situation violates the principle of "authority and responsibility," which states that the level of authority granted to an individual should be commensurate with the level of responsibility assigned to them.
Here's why the production manager is at fault:
*Lack of matching authority: The foreman needs access to necessary resources to achieve the production target. By withholding the authority to requisition them, the production manager is setting the foreman up for failure.
*Ineffective delegation: Assigning a responsibility without providing the corresponding means to fulfill it is ineffective delegation. This creates frustration and demotivation for the foreman.
*Unfair blame: Holding the foreman accountable for a target he lacks the resources to achieve is unfair and demotivating.
Even if the target appears achievable in theory, without the necessary tools and materials, it becomes unrealistic and demotivating. The production manager should address this issue by:
*Providing the foreman with the necessary authority to requisition tools and materials.
*Having open communication with the foreman to understand any resource constraints and adjust the target if needed.
*Supporting the foreman with resources and training to improve efficiency and meet the target.
Long Answer Type0.
1. Why delegation is considered essential for effective organising?
Ans: Delegation is considered essential for effective organizing for several key reasons:
Enhances Managerial Efficiency:
*By delegating routine tasks, managers have more time and energy to focus on strategic planning, problem-solving, and innovation. This leads to overall improved decision-making and organizational direction.
Empowers and Motivates Employees:
*Delegation shows trust in employees, increasing their engagement and motivation. It provides opportunities for skill development, ownership, and a sense of achievement. This can lead to higher productivity and commitment to the organization.
Improves Flexibility and Adaptability:
*Delegating decisions and tasks closer to the point of action makes the organization more responsive to changing market demands and customer needs. This allows for quicker adjustments and improved problem-solving at the ground level.
Promotes Growth and Development:
*Delegation provides employees with valuable learning experiences, exposing them to new challenges and responsibilities. This fosters the development of leadership skills, critical thinking, and decision-making, preparing them for future growth within the organization.
Increases Efficiency and Productivity:
*By aligning skills and expertise with specific tasks, delegating allows for specialization and improved efficiency. This reduces duplication of effort and optimizes resource allocation, leading to increased productivity within the organization.
Strengthens Communication and Collaboration:
*Effective delegation relies on clear communication and collaboration between managers and employees. This builds trust, improves working relationships, and fosters a more open and communicative organizational culture.
Overall, delegation is a powerful tool for creating a more dynamic, efficient, and engaged organization. By empowering employees and fostering a culture of ownership and responsibility, it can drive growth, adaptability, and success.
2. What is a divisional structure? Discuss its advantages and limitations.
Ans: A divisional structure is an organizational structure where a company is divided into semi-autonomous units called divisions, each specializing in a particular product, service, market, or geographic region.
Here's an example of a company with a divisional structure:
Advantages of a divisional structure:
*Increased focus and expertise: Each division can focus on its own specific market or product, which can lead to increased expertise and competitiveness.
*Improved decision-making: Decisions can be made closer to the point of action, which can lead to faster and more efficient decision-making.
*Enhanced motivation and accountability: Employees in each division can feel more ownership and accountability for their work, which can lead to increased motivation and productivity.
*Greater flexibility and adaptability: The organization can more easily adapt to changes in the market or environment by adjusting its individual divisions.
*Potential for growth: The structure can easily accommodate growth by adding new divisions or expanding existing ones.
Limitations of a divisional structure:
*Increased complexity: The structure can be more complex to manage than other structures, such as a functional structure.
*Duplication of resources: Different divisions may duplicate resources, such as marketing or accounting departments, which can be inefficient.
*Internal competition: Divisions may compete with each other for resources, which can be harmful to the overall organization.
*Loss of economies of scale: The organization may lose economies of scale by having separate divisions for different products or services.
*Difficulty in coordinating activities: It can be difficult to coordinate activities across different divisions, which can lead to problems such as communication gaps and conflicting priorities.
3. Decentralisation is an optional policy. Explain why an organisation would choose to be decentralised.
Ans: Decentralization isn't strictly optional, but rather a spectrum organizations choose to navigate based on their needs and context. While centralization offers certain benefits, decentralization can be strategically advantageous for several reasons:
*Faster Decision-Making: Decentralized structures empower lower levels to make decisions closer to the action, eliminating the need for lengthy approvals and reducing delays. This fosters agility and responsiveness in a dynamic environment.
*Improved Innovation and Problem-Solving: Local teams with vested interests can experiment and generate solutions tailored to their specific context, leading to greater innovation and efficient problem-solving.
*Enhanced Motivation and Employee Engagement: When employees have autonomy and decision-making power, they feel more valued and engaged. This boost in morale can translate to higher productivity and improved retention.
*Increased Adaptability and Flexibility: Decentralized organizations can adapt to changing market conditions and local nuances more quickly than centralized ones. They can tailor their offerings and strategies to specific regions or customer segments.
*Better Customer Service: Local teams closer to customers can understand their needs and respond more effectively, leading to improved customer satisfaction and loyalty.
*Reduced Workload for Top Management: Decentralization liberates top executives from routine decisions, allowing them to focus on strategic planning and long-term vision.
*Empowerment and Development: Lower-level employees gain valuable experience in decision-making, problem-solving, and leadership, fostering internal talent development and succession planning.
However, decentralization also has its challenges:
*Loss of Control and Coordination: Increased autonomy can lead to inconsistencies and fragmentation across the organization, necessitating robust communication and coordination mechanisms.
*Resource Duplication: Independent divisions might duplicate resources like marketing or IT, leading to inefficiencies.
*Potential for Internal Conflicts: Competition for resources or differing priorities between divisions can arise, necessitating effective conflict resolution strategies.
*Increased Dependence on Lower Levels: Decentralization necessitates strong leadership and decision-making skills at lower levels, requiring investment in training and development.
Ultimately, the decision to decentralize depends on the organization's size, industry, goals, and context. Analyzing these factors and weighing the potential benefits against the challenges can help determine the optimal degree of decentralization for effective organizational functioning.
4. Distinguish between centralisation and decentralisation.
Ans: The key distinguishing factor between centralization and decentralization lies in the decision-making authority within an organization:
Centralization:
*Decision-making power rests primarily with top management. Lower levels have limited autonomy and execute decisions made by superiors.
*Structure: Often hierarchical, with clear chains of command and less horizontal communication.
*Benefits: Consistency, efficient resource allocation, strong control over brand and direction.
*Drawbacks: Slow decision-making, lack of local responsiveness, limited employee engagement.
Decentralization:
*Decision-making authority is distributed throughout the organization. Lower levels have more autonomy and can make decisions relevant to their area of expertise.
*Structure: Often flatter, with empowered teams and increased cross-functional collaboration.
*Benefits: Faster decision-making, improved local responsiveness, increased employee engagement and innovation.
*Drawbacks: Potential for inconsistencies, loss of control, resource duplication, and internal conflicts.
Here's a table summarizing the key differences:
5. How is a functional structure different from a divisional structure?
Ans: The key difference between a functional structure and a divisional structure lies in the way departments are grouped:
Functional Structure:
*Groups employees based on similar skills and expertise. For example, all accountants would be in the accounting department, all engineers in the engineering department, etc.
.Advantages:
*Specialization: Increased efficiency and expertise within each function.
*Standardization: Easier to apply consistent practices and procedures across the organization.
*Cost-effectiveness: Shared resources and reduced duplication of effort.
.Disadvantages:
*Lack of focus on specific markets or products: Can be slow to adapt to changing market needs.
*Internal competition: Departments may compete for resources and priorities.
*Limited career development: Employees may be confined to their specific function.
.Divisional Structure:
*Groups employees based on product, service, market, or geographic region. For example, there might be a separate division for each product line, or for each regional market.
.Advantages:
*Increased focus on specific markets or products: More responsive to customer needs and market changes.
*Improved decision-making: Decisions can be made closer to the point of action.
*Enhanced teamwork and collaboration: Teams are focused on a common goal within their division.
.Disadvantages:
*Increased complexity: Can be more difficult to manage and coordinate than a functional structure.
*Duplication of resources: Different divisions may need the same resources, leading to inefficiencies.
*Internal competition: Divisions may compete for resources and priorities.
Here's a table summarizing the key differences:
6. A company, which manufactures a popular brand of toys, has been enjoying good market reputation. It has a functional organisational structure with separate departments for Production, Marketing, Finance, Human Resources and Research and Development. Lately to use its brand name and also to cash on to new business opportunities it is thinking to diversify into manufacture of new range of electronic toys for which a new market is emerging. Which organisation structure should be adopted in this situation? Give concrete reasons with regard to benefits the company will derive from the steps it should take.
Ans: Given the company's situation and plans to diversify into electronic toys, a divisional structure would be the most suitable organizational approach. Here's why:
Benefits of a divisional structure for this case:
1. Focused expertise and market responsiveness: Dividing into separate divisions for traditional toys and electronic toys can create dedicated teams with specialized expertise in each market. This fosters deeper understanding of customer needs, better product development, and quicker adaptability to new trends.
2. Clear accountability and profit responsibility: Each division can function as a mini-business with its own profit and loss responsibility. This fosters accountability and drives performance at the divisional level, motivating teams to excel in their respective markets.
3. Enhanced decision-making agility: Decentralized decision-making within each division enables faster responses to market opportunities and challenges. Decisions don't need to flow through a centralized hierarchy, ensuring timely action and adaptability.
4. Efficient resource allocation: Separate divisions can manage their resources independently, allocating investments and budgets based on their specific needs and market demands. This avoids the potential for inefficiency or misallocation of resources within a single functional structure.
5. Brand leveraging and expansion potential: The existing strong brand reputation can be leveraged for the new electronic toy line within the dedicated division. This creates a clear brand distinction while building upon the established trust and recognition. Furthermore, the divisional structure facilitates future diversification into other product lines with minimal disruption.
Steps to transition effectively:
*Clearly define divisional boundaries: Determine the appropriate basis for dividing departments (e.g., product type, target market).
*Assign leadership and talent: Select competent individuals to head each division and allocate necessary resources and personnel.
*Establish communication and coordination mechanisms: Create strong communication channels and collaboration processes across divisions to ensure alignment and prevent silos.
*Performance measurement and feedback: Develop clear performance metrics for each division and implement regular feedback systems to monitor progress and adapt strategies.
By adopting a divisional structure and diligently implementing the transition steps, the company can effectively capitalize on its existing brand recognition and expertise to successfully enter the electronic toy market while maintaining efficiency and control over its overall operations.
7. A company manufacturing sewing machines set up in 1945 by the British promoters follows formal organisation culture in totality. It is facing lot of problems in delays in decision making. As the result it is not able to adapt to changing business environment. The work force is also not motivated since they cannot vent their grievances except through formal channels, which involve red tape. Employee turnover is high. Its market share is also declining due to changed circumstances and business environment. You are to advise the company with regard to change it should bring about in its organisation structure to overcome the problems faced by it. Give reasons in terms of benefits it will derive from the changes suggested by you.
Ans: Overcoming rigidity and stagnation: Reorganizing the sewing machine company
The company faces challenges due to its strict adherence to formality and centralized decision-making. To overcome these, I recommend the following:
**Shifting towards a hybrid structure:
*Retain a centralized core: Maintain centralized functions like finance, legal, and IT for efficiency and control.
*Introduce semi-autonomous departments: For production, marketing, and sales, adopt a more flexible, team-based structure with empowered decision-making at departmental levels.
Benefits:
*Faster decision-making: Teams closer to the market can respond quicker to changes and opportunities.
*Improved adaptability: Increased flexibility allows easier adjustments to the dynamic business environment.
*Enhanced employee engagement: Empowering teams and providing avenues for informal feedback improve morale and retention.
*Increased innovation: Flatter hierarchies and team collaboration foster creativity and new ideas.
Additional changes:
*Delegate authority and responsibility: Grant department heads and team leaders decision-making power within their areas of expertise.
*Improve communication and collaboration: Establish open communication channels across departments and encourage information sharing.
*Invest in employee development: Train employees on problem-solving and decision-making skills to thrive in the new structure.
*Introduce formal and informal feedback mechanisms: Maintain formal channels while creating avenues for informal feedback and employee suggestions.
*Embrace technology: Utilize digital tools for streamlined communication, collaboration, and decision-making processes.
Benefits:
*Reduction in delays: Timely decision-making and efficient communication improve overall productivity.
*Enhanced customer focus: Departments can tailor offerings and marketing strategies to specific customer needs.
*Reduced employee turnover: Improved engagement and satisfaction lead to decreased turnover and increased loyalty.
*Sustainability and growth: Increased adaptability and innovation pave the way for long-term success in a changing market.
Remember:
*Transitioning to a new structure requires careful planning, communication, and support for employees.
*Continuously monitor progress and adapt the approach based on feedback and evolving needs.
8. A company X limited manufacturing cosmetics, which has enjoyed a pre-eminent position in business, has grown in size. Its business was very good till 1991. But after that, new liberalised environment has seen entry of many MNC’s in the sector. With the result the market share of X limited has declined. The company had followed a very centralised business model with Directors and divisional heads making even minor decisions. Before 1991 this business model had served the company very well as consumers had no choice. But now the company is under pressure to reform. What organisation structure changes should the company bring about in order to retain its market share? How will the changes suggested by you help the firm? Keep in mind that the sector in which the company is FMCG.
Ans: To regain its market share and adapt to the new competitive landscape, X Limited should consider transitioning from its centralized structure to a hybrid structure incorporating elements of decentralization and centralization. Here's how such a change can benefit the company:
1. Decentralized Sales and Marketing:
*Establish regional or product-based divisions: Empower these divisions with decision-making authority on marketing campaigns, promotions, and pricing within defined budgets.
*Closer market responsiveness: Divisions can tailor strategies to meet specific regional or product segment needs, leading to more effective campaigns and faster adaptation to local trends.
*Improved customer focus: Teams closer to customers can better understand their preferences and respond with relevant offerings and services.
2. Centralized Core:
*Maintain centralized functions: Finance, legal, IT, and research and development can remain centralized for efficiency, resource optimization, and brand consistency.
*Control and expertise: Centralized functions ensure adherence to corporate guidelines, provide expert support to divisions, and manage brand identity effectively.
3. Improved Communication and Collaboration:
*Implement cross-functional teams: Create temporary teams with members from different divisions to share expertise and tackle specific challenges or projects.
*Enhanced information sharing: Foster open communication through regular meetings, knowledge-sharing platforms, and transparent internal reporting.
*Greater alignment and synergy: Improved communication allows for better coordination between divisions, leading to more unified strategies and resource allocation.
4. Empowered Employees:
*Delegate authority and responsibility: Equip regional managers and team leaders with decision-making power within their areas of expertise.
*Invest in employee development: Provide training on leadership, problem-solving, and decision-making skills to prepare employees for increased responsibility.
*Increased motivation and engagement: Empowering employees fosters ownership, initiative, and a sense of accomplishment, leading to higher morale and productivity.
Benefits for X Limited:
*Market share recovery: Increased responsiveness, customer focus, and innovation can help X Limited regain market share from competitors.
*Faster decision-making: Decentralized teams can react to market changes and opportunities more quickly, leading to greater agility and competitiveness.
*Improved employee performance: Empowerment and a collaborative culture can boost employee morale, motivation, and engagement, leading to increased productivity and creativity.
*Sustainability and growth: The hybrid structure provides the flexibility and adaptability needed to thrive in the dynamic FMCG market and achieve long-term success.
Question And Answer Type By: Himashree Bora.
Post ID: DABP006908
