6.01: INTRODUCTION
The concept of organization structure is at the heart of organizational studies, historically and
contemporaneously. Understanding organizational structure is central to the understanding of
effective and efficient organizing, through structural design. Organizational structure is crucial
both for the company and the employees. Organization structure can spell the difference between
success and failure for the corporation. Organizational structure options are vital as they pertain
to the long term success of individual employees and corporations 1. Organizational structure is a
crucial component of overall business strategy.
Organizational structure refers to the internal pattern of relationships, authority and
communications2.
Organizational structure refers to the way that an organization arranges people and jobs so that
its work can be performed and its goals can be met. When a work group is very small and faceto-face communication is frequent, formal structure may be unnecessary, but in a larger
organization decisions have to be made about the delegation of various tasks 3. Thus, procedures
are established that assign responsibilities for various functions. It is these decisions that
determine the organizational structure.
Organizing, the process of structuring human and physical resources in order to accomplish
organizational objectives, involves dividing tasks into jobs, specifying the appropriate
department for each job, determining the optimum number of jobs in each department, and
delegating authority within and among departments.
___________________________________________________
253
1.
Craig W. Fontaine, Ph.D. , Aug 2007, “Organizational Structure: A Critical Factor for
Organizational Effectiveness and Employee Satisfaction”, Northeastern University, College of
Business Administration Based on:
C.W. Fontaine, How Organizational Structure Impacts Organizations. First Annual Conference
on Organizational Effectiveness, Chicago, IL 2006
2. Thompson . J. D.,1967 “ Organization in action” New York McGraw-Hill.
3.
http://www.referenceforbusiness.com/management/Ob-Or/Organizational-
Structure.html#ixzzG3F0xiIB7
One of the most critical challenges facing lodging managers today is the development of a
responsive organizational structure that is committed to quality 1. Organizational structure is the
way responsibility and power are allocated and work procedures are carried out, among
organizational members2. Structure is the characteristic feature of an organization. It is what
brings about or makes possible that quality of atmosphere that sustains and gives purposiveness
that distinguishes the work in an organization from activities in a group.
Basically organizational structure is a way to organize employees into some kind of functional
system whereby an environment is created to meet goals, minimize confusion and conflicts and
most important coordinate activities by clearly identifying which individuals are responsible for
which tasks.
According to business management dictionary, organizational structure is the body of policies
and rules that allows an organization to arrange its chain of command and communication while
allocating rights and responsibilities. Based on the work to be performed, the size of the
organization, technology used, leadership, organizational culture, environment, and life cycle of
the product organizations can be of varies forms from simple structure to virtual structure.
Because of the impact of globalization and the internet revolution and development of
telecommunications facilities the organization structure of corporations has been changing over
the period. In recent times innovative organizational structures. Corporations these days have
boundary less structure where boundaries within the organization is more flexible and more
permeable allowing faster knowledge transfer. Other types of structures are modular structures
and virtual structure. These organizational structures revolve around knowledge sharing for
better operational decision making.
______________________________________________________________________
254
1.
John M. Ivancevich, Peter Lorenzi, and Steven J. Skinner, with Philip B. Crosby,
Management: Quality and Competitiveness (Boston: Richard D. Irwin, 1996), 254.
2. Blau, P.M., 1970. Decentralization in bureaucracies. In: Zald, M.N. (Ed.), Power in
Organisations. Vanderbilt University Press, Nashville, TN, pp. 150–174. Dewar, R., Werbel, J.,
1979. Universalistic and contingency predictions of employee satisfaction and conflict.
Administrative Science Quarterly 24, 426–448.
Despite all these dramatic environmental changes and influences basically the prominently
observed structures in the corporate world in small, medium and large scale enterprises are
simple, functional, matrix and SBU.
6.02: SIMPLE STRUCTURE
Simple structure represents the oldest form of organization. They are those structures that have
low degree of departmentalization and a wide span of control. They are typically owner and
managed and restricted to a single product or limited line of products. The owner manager makes
all the decisions and attempts to monitor all activities.
The organization here is typically
informal and but the decision making is highly centralized. There are few rules and regulations
and a conspicuous absence of information systems. The authority is largely centralized with a
single person with very little formalization.
It usually has two or three vertical levels, a flexible set of employees and generally one person in
whom the power of decision making is vested. Simple organizational structure is more
responsive, fast, accountable and easy to maintain. However it becomes grossly inadequate as
and when the organization grows in size. Such a simple structure is popular because of its
flexibility, responsiveness and high degree of adaptability to change.
ADVANTAGES
1. These type of organizations enjoy considerable amount of flexibility
2. By virtue of the simple structure they move quickly to take advantage of market
opportunities.
3. Its flat structure makes communication fast and direct.
DISADVANTAGES
1. Lack of rules and regulations in the organization brings problems and conflicts among
organizational members.
255
2. Flat structure does not provide scope for upward mobility making employee retention
difficult
6.03 FUNCTIONAL STRUCTURE
Organizational structure refers to the way people in an organization are grouped and whom they
report to. One traditional way of organizing people is by function. Some of the common
functions within an organization are production, human resources, marketing and accounting. As
opposed to simple structure functional structure is useful for relatively big organizations.
Employees within this framework are differentiated to perform a specified set of tasks. This
specialization leads to operational efficiency where employees become specialist within their
own realm of expertise.
For instance the marketing department would be staffed with only marketing personnel
responsible for marketing the company‟s products. Functional structures are characterized by
greater degree of formalization making each function reliant on standardized way of operations.
Decision power is often centralized at the top of the hierarchy.
FIGURE 6.01: MODEL OF FUNCTIONAL STRUCTURE
Functional structures are most effective for corporations operating in rather stable environments
with low rates of change and dynamism. The advantages of functional organization are:
1. That the lines of command are clear.
2. Individuals specialize and departments tend to develop common knowledge across the
group.
3. Each employee has clear career path and has the potential to grow within his/her
department in the organization.
256
The disadvantages of functional organizations are:
1. Communication across groups becomes difficult because all of them are so distinct from
each other
2. Slow response to changes in the environment
3. Too much work is referred upward due to lack of decision making authority and serious
problems can ensue when group develops a narrow perspective
4. Evaluation and control become difficult since each functional area‟s contribution
overlaps with other area‟s contribution.
Functional structure is suitable for those organizations that are in a stable environment and do
not require rapid change of strategy or in relatively small organizations that provide few services
or products.
6.04: MATRIX STRUCTURE
This form of structure is designed to combine the advantages of pure functional Matrix and
product organizational structure. It is a structure in which teams are formed and team members
report to two or more managers. It is highly flexible form that is readily adaptable to changing
circumstances. This form of organizational structure relies heavily on committee and team
authority.
Matrix Organizational structure is intended to facilitate the horizontal flow of skills and
information. In matrix organization each project manager reports directly to the vice president
and the general manager. Since each project represents a potential profit center, the power and
authority used by the project manager comes directly from the general manager. Information
sharing is mandatory in such organizations and several people may be required for the same
piece of work.
FIGURE 6.02: MODEL OF MATRIX ORGANIZATIONAL STRUCTURE
257
The general project manager has the total responsibility and accountability for the success of the
project. However on the other hand functional departments have the functional responsibility to
provide and maintain technical excellence of the project.
The basis for this type of structure is an endeavor to create synergy through shared responsibility
between project and functional management. This kind of structure is applicable in diverse
settings like manufacturing, service industries and professional fields. The advantages of matrix
organizational structure are:
Better cooperation across functions
Improved decision making
Increased flexibility
Better customer service
Better performance accountability
Improved strategic management
The disadvantages of this kind of structure are:
Disagreement over functional and project supervisors over shared resources may lead to
power struggle.
258
Dual authority if not explicitly documented may leave employees uncertain about their
accountability to various supervisors.
Team meeting in Matrix structure are time consuming
Dual command structure a characteristic of matrix leads to excessive number of managers
increasing the cost burden to the organization.
6.05: STRATEGIC BUSINESS UNIT
A Strategic Business Unit covers a set of relatively autonomous entities governed by a
centralized administration. SBUs are called strategic centers, Independent business units or
strategic planning centers. A SBU is a business unit within the overall corporate identity which is
distinguishable from other businesses because it serves a defined external market where
management can conduct strategic planning in relation to products and markets. The phrase
Strategic Business Unit came into existence in 1960‟s as a result of General Electric‟s many
units. A strategic business unit can encompass an entire organization or can simply be a smaller
part of the organization set up to perform a specific task. The SBU has its own business strategy,
objectives and competitors and they are different from those of the parent company. An SBU is
an autonomous division or organizational unit small enough to be flexible and large enough to
exercise control over most of the factors affecting its long term performance. Strategic business
units have their own independent vision and mission thus they allow their owning conglomerate
to respond quickly to changing economic and market situations.
Generally there are three major factors that play a key role in determining the success of an SBU,
they are:
1. The degree of autonomy given to each SBU manager.
2. The degree to which an SBU shares functional programs and facilities with other SBUs
3. The corporation response to the new changes in the market.
Advantages of SBUs
1. Minimizes problems associated with sharing resources across functional areas.
2. Quick response to environment
3. Increase focus on products and markets
4. Increases operational and strategic control, allowing corporate level executives to deal
with strategic issues
Disadvantages of SBUs
259
1. Increased expenditure invited through doubling of operations, personnel and investments
2. Difficulty in maintaining a uniform corporate image.
3. Over emphasis on short term performance
4. Distortion of information
6.06: ORGANIZATIONALSTRUCTUR ANALYSIS
TABLE 6.01: TYPE OF ORGANIZATIONAL STRUCTURE
Organizational structure
Frequency
Percentage
Simple
11
31
Functional
18
52
SBU
5
14
Network
1
3
Total
35
100
An examination of this table projects a clear portrait of the basic organizational design. It is
observed that 31% of the corporations have a simple structure, 52% of the companies have
functional structure, 14% of the companies have adopted SBU type of structure and only 3%
have adopted one of the latest, the network structure which is where most of the functions are
outsourced to a third party. It can concluded that the most preferred and practiced structure in
the Visakhapatnam IT sector is Functional organizational structure, which implies that they are
not very large corporations but that they are small and medium sized enterprises. It further sheds
light on the fact that there is a greater degree of formalization in the manner in which the
departments carryout their set of specified duties
TABLE 6.02: PREPARATION OF ORGANIZATIONAL CHART
Chart maintenance
Frequency
Percentage
Yes
27
77
No
8
23
Total
35
100
260
An insight into this question explains where the organizations are professionally run
establishment where the documentation of organization design and structure is practiced. From
this table it can be seen that 77% of the corporations are maintaining an organizational chart and
23% of the corporations are not maintaining an organizational chart. It can inferred that the IT
corporations are professionally run where due significance is given to organization design and
structure.
TABLE 6.03: MEMBERS DESIGNING THE STRUCTURE
Members
Response
No extent
Small extent
Moderate extent
Large extent
BOD
MD
CEO
F
%
F
%
F
%
16
46
8
23
9
25
8
23
5
14
2
6
6
17
2
6
4
11
2
6
5
14
3
9
3
8
15
43
17
49
35
100
35
100
35
100
Very large extent
Total
The objective of this question is to evaluate the part played by the organizational members in
grafting the organizational design.
It is observed that with reference to BOD; 46% claim that they do not contribute in the framing
of the organizational structure, 23% state that their contribution is to a small extent only, 17% are
of the opinion that BOD moderately contributes to the development of organizational design, 6%
believe that they contribute to a large extent, only 8% of sample state that BOD contributes to a
very large extent in the framing of the organizational structure.
261
With reference to the MD; 23% state that MD does not contribute at all, 14% claim that MD
contributes to a small extent only, 6% state that the MD contribution is only moderate, 14%
claim that he contributes to large extent and 43% of them accept that the MD contributes to a
very large extent.
With reference to the CEO; 25% state that the CEO does not contribute to designing the
organization structure, 6% claim that the CEO‟s contributes only to a small extent in framing the
organizational structure, 9% claim that the CEO contributes to a large extent and finally 49%
nearly half the respondents agree that the CEO contributes very largely to the grafting of the
organizational structure.
From the above frequency analysis the inference that can be drawn is that the BOD does not play
an active role only CEO & MD contribute to the framing of the organization structure.
TABLE 6.04: PARAMETERS FOR FRAMING STRUCTURE
Parameters
Response
Leadership
Size
Company
Strategy
Technology
Age
No extent
Small extent
Moderate extent
Large extent
F
%
F
%
F
%
F
%
F
%
2
6
5
14
11
32
2
6
1
3
1
3
7
20
5
14
4
11
3
8
1
3
6
17
8
23
5
14
4
11
20
57
9
26
9
25
14
40
17
49
11
31
8
23
2
6
10
29
10
29
35
100
35
100
35
100
35
100
35
100
Very large extent
Total
The objective of this analysis is to understand which factors have played a major role in framing
the organizational structure.
From the above table it is observed that the internal factors leadership, size, company age,
strategy and technology have been evaluated.
262
With reference to leadership, 6% state that leadership factor was not taken into account at all, 3%
state that the leadership factor was given only little consideration, another 3% state that moderate
importance was given to leadership, 57% which is more than half state that leadership factor
played a large role when grafting the organizational structure and 31% state that leadership has
contributed to a very large extent during the formulation of the organizational structure.
With reference to size; 14% state that size of the company was not considered when framing the
organizational structure,20% state that to small extent they considered the size of the
organization, 17% claim that moderate consideration was given to size of the company, 26%
claim that size of the organization has played a large role during the formulation of the
organizational structure and finally 23% state that size of the organization has played a very
large role in the framing of the organizational structure.
With reference to company age; 32% of the respondents state that company age was not
considered when formulating the organizational structure, 14% state that company age is
considered only to a small extent, 23% claim that company age is moderately considered, 25%
state that company age is largely considered when formulating the organizational structure and
only 6% claim that it contributes significantly to the designing of the organizational structure.
With reference to strategy; 6% state that strategy factor was not taken into account at the time of
framing of organizational structure, 11% state that it contributed to a small extent, 14% claim
that it contributed moderately towards designing the organizational structure, 40% state that
strategy has played a large role in designing of the structure and 29% state that it has contributed
to a very large extent. With reference to technology; 3% state that it was not at all considered
when framing the organizational structure, 8% of the respondent‟s state that the technology
factor was given only little importance, 11% claim that this factor contributed moderately to the
framing of the organizational structure, 49% state that technology factor was considered to a
very large extent when formulating the organizational structure.
From the above analysis it can be concluded that the main factors that were considered at the
time of framing the organizational structure were leadership, technology and strategy of the
organization
TABLE 6.05: ENVIRONMENTAL
PARAMETERS FOR FRAMING STRUCTURE
Parameters
Response
External
263
Culture
Internal
Environment
No extent
Small extent
Moderate extent
Large extent
Environment
F
%
F
%
F
%
1
3
5
14
3
9
4
11
8
23
13
37
9
26
13
37
9
26
18
51
7
20
5
14
3
9
2
6
5
14
35
100
35
100
35
100
Very large extent
Total
The gist of this analysis is to explore the extent of contribution of environmental variables in
designing of the organizational structure. It is observed, that the environmental variables
considered are external environment, culture, internal environment.
With reference to external environment; 3% of the respondents state that it has not at all been
considered when formulating the organizational structure, 11% feel that this factor has
contributed to a small extent, 26% state that this factor has contributed moderately in the framing
of the organizational structure, 51% of the respondents claim the external environment has
contributed largely in the designing of the organizational structure, 9% state that it has played a
very large role in the framing of the organizational structure.
With reference to culture; 14% state that it has no influence in designing the organizational
structure, 23% claim that it has contributed to a small extent in the designing process, 37% are of
the view that culture has moderately contributed in the designing process, 20% state that it has
largely contributed in the designing process, 6% state that culture has contributed to a very large
extent in the designing of the organizational structure. With reference to internal environment;
9% of the respondents state that it has not be considered when designing the organizational
structure, 37% of the respondents state that it has been considered to a small extent, 26% claim
that the culture factor was considered moderately in the formulation of the organizational
structure, 14% claim that this factor was largely considered in the framing of the organizational
264
structure, 14% claim that the culture factor has contributed to a very large extent in the designing
of the organizational structure. From the above frequency analysis it can inferred that the
external environment is a major factor that was taken into account when designing the
organizational structure and that culture and internal environment were given secondary
preference when framing the organizational structure.
TABLE 6.06: STRUCTURAL CHANGE SINCE INCEPTION
Response
Frequency
Percentage
No extent
9
26
Small extent
12
34
Moderate extent
11
31
Large extent
3
9
Very large extent 0
0
Total
100
35
The objective of this table is to assess whether the organization has undergone any structural
change since establishment till date. From the table it is observed that 26% of the respondents
state that there has been no structural change, 34% claim that the structural change is only to a
small extent, 31% state that the organizational structure has changed moderately and only 9%
state that structural changes have occurred are to a large extent. It can be concluded that though
there are small and moderate changes, the overall type of organizational structure has not been
affected by these changes and still remains constant since the period of establishment.
Parameters
TABLE 6.07: INTERNAL CAUSE FOR STRUCTURAL CHANGE
Response
No extent
Small extent
Leadership
Increase in Adoption
Effective
Change
business
of new
delivery of
revenue
strategies
strategies
F
%
F
%
F
%
F
%
0
0
2
8
0
0
3
11
7
27
2
8
4
15
1
4
265
Moderate extent
Large extent
5
19
9
35
0
0
3
12
13
50
8
30
15
58
8
31
1
4
5
19
7
27
11
42
26
100
26
100
26
100
26
100
Very large extent
*Total
*In this case only 26 respondents have stated that there has been some structural change in
Their organization
An analysis of this table provides us with information regarding the internal causes of the
structural change that has occurred to a small/moderate extent in some organizations.
With reference to leadership change, 27% state that there has been a small structural changes
because of leadership change, 19% claim that moderate change in organizational structure has
taken place, 50% that is half the respondents believe that the structural changes were largely due
to the change in leadership, only 4% state that change in leadership played a vital role in changes
in the organizational structure.
With reference to increase in business, 8% feel that this factor did not cause any structural
change, 8% state that this factor caused small changes in the organizational structure, 35% state
that moderate changes were brought about in the structure as a result of increase in business,
30% feel that this factor played a large role in bringing about structural changes and 19% claim
that to a very large extent this factor can be attributed to the structural changes that occurred in
the organization.
With reference to adoption of new strategies; 15% state that this factor has contributed to only
small extent, 58% claim that the adoption of new strategies has largely contributed to the
structural changes within the organization and 11% state that this factor has significantly caused
the changes in the organizational structure.
With reference to effective delivery of strategies, 11% of the respondents state that this factor
has not resulted in any structural changes, 4% state that the contribution of this factor towards
structural changes is very small, 12% state that to a moderate extent the effective delivery of
266
strategies has bought about structural changes, 31% state that to a very large extent this factor
has resulted in changes in the structure of the organization and 4% claim that to a very large
extent this factor can be attributed to the structural changes that took place in the organization.
The inference that can be drawn is that the main reasons identified for changes in organizational
structure are change in leadership and adoption of new strategies.
TABLE
6.08: EXTERNAL CAUSE FOR STRUCTURAL CHANGE
Parameters
Response
Competition
Diversification
External
Recession
Environment
No extent
Small extent
Moderate extent
Large extent
F
%
F
%
F
%
F
%
6
23
10
38
1
4
3
9
8
31
2
8
7
27
9
26
9
35
10
38
9
35
9
26
3
11
0
0
5
19
5
14
0
0
4
16
4
15
0
0
26
100
26
100
26
100
26
100
Very large extent
Total
267
*In this case only 26 respondents have stated that there has been some structural change in
their organization.
The objective of this statement is to evaluate the reasons that bought about changes in the
organizational structure. In the above table the factors evaluated are competition, diversification,
external environment and recession. With reference to competition; 23% state that this factor did
not influence the structural changes at all, 31% state that competition has influenced structural
changes to a small extent only, 35% of the respondents claim that the structural changes brought
about by competition are moderate and 11% state that this factor has played a large role in
bringing changes in the organizational structure. With reference to diversification; 38% state that
this factor has no impact at all on structural changes, 8% claim that diversification has brought
about structural changes to a small extent only, 38% of the respondents feel that diversification
has brought about moderate changes in the organizational structure and 16% of the respondents
state that this factor has had a very large impact on the structure of the organization.
With reference to external environment; 4% feel that this factor has not impact on structural
changes, 27% feel that the factor has brought about structural changes which are only to a small
extent, 35% state that this factor has resulted in moderate changes in organizational structure,
19% of the respondents state that it has influenced the structural changes to a large extent and
15% of the respondent claim that external environment has influenced the changes in
organizational structure to a very large extent.
With reference to recession; 9% state that
recession has no impact on changes in the organizational structure, 26% of the respondents state
that it has brought about small structural changes, 26% claim that recession has had a moderately
affected the structure of the organization and 14% of the respondents state that recession has
influenced the structural changes to a large extent. From the above analysis it can be inferred that
the most important factor that brought about structural changes in the Visakhapatnam IT sector is
recession and external environment.
Members
TABLE 6.09: PLANING FUNCTION RESPONSIBILITY
Response
MD
CEO
Manager
268
Manager with
Directly
employees
employees
No extent
Small extent
Moderate extent
Large extent
F
%
F
%
F
%
F
%
F
%
7
20
9
26
11
31
4
12
18
51
4
11
5
14
7
20
5
14
10
28
2
6
3
8
2
6
6
17
1
3
7
20
8
23
13
37
13
37
4
12
15
43
10
29
2
6
7
20
2
6
35
100
35
100
35
100
35
100
35
100
Very large extent
Total
The objective of the above table is to have an insight into which organizational members are in
charge of planning activities of the corporation. The main organizational heads evaluated for this
purpose are the MD, CEO, Manager, and Manager with employees and Employees directly.
With reference to the MD, 20% state that no planning work is carried out by the MD, 11% state
that the planning carried out by the MD is to a small extent only, 6% state that the MD‟s
contribution in planning is to moderate extent, 20% of the respondents state that the MD largely
contributes in organizational planning and 43% state that the MD contributes to a very large
extent in the planning of the organization.
With reference to the CEO, 26% state that he does not contribute at all, 14% are of the opinion
that the CEO‟s contribution is only to a small extent, 23% state that he contributes largely to the
planning function, 29% claim that the CEO‟s contributes to very large extent in the planning
activities of the organization.
With reference to the Manager, 31% state that the manager has no role in the planning function
of the organization, 20% feel that his role in the planning function is only to a small extent, 6%
of them state that the manager contributes moderately in the planning activities of the
organization, 37% state that the manager contributes largely in the planning function and 6%
state that the manager contribution in organizational planning is very significant.
With reference to Manager with employees, 12% state that planning is not done by the manager
in combination with the employees, 14% state to a small extent planning activity takes place in
this manner,17% further state that to a moderate extent the manager and the employee engage in
269
planning activities, 37% state that to a large extent the manager and the employees work in
combination regarding planning of the organization and 20% state that to a very large extent the
manager and the employees plan organizational issues.
With reference to Employees directly, 51% are of the opinion that employees never directly
engage in planning activities, 28% claim that to small extent they engage in planning activities,
only 3% are of the view that to a moderate extent the employees do directly engage in planning
activities, 12% state that to a large extent the employees do directly engage in planning the
organizational matters and only a small 6% state that to a very large extent the employees do
directly engage in planning of organizational matters.
From the above it can be inferred that in most organizations the planning activities are handled
by the manager in consultation with the employees, this further implies that the work culture and
leadership style might be participative in nature.
Members
TABLE 6.10: MANAGEMENT FUNCTION RESPONSIBILITY
Response
BOD
No extent
Small extent
Moderate extent
Large extent
MD
CEO
Management
Contracted
team
Manager
F
%
F
%
F
%
F
%
F
%
19
54
7
20
10
29
14
40
34
97
11
32
6
17
2
6
1
3
0
0
3
8
8
23
4
11
7
20
0
0
1
3
4
12
5
14
3
9
0
0
1
3
10
28
14
40
10
28
1
3
35
100
35
100
35
100
35
100
35
100
Very large extent
Total
The intent
of this table is to understand which organization member is entrusted with overall
management of the corporation. The members taken into account for this analysis are BOD, MD,
CEO, Management team, Contracted Manager.
270
With reference to BOD; 54% of the respondents state that BOD is not at all responsible for
handling the management of the organization, 32% state that they are involved in the
management activities only to a small extent, 8% state that BOD is involved only to a moderate
extent in the general management of the organization, 3% state that the BOD involves to a large
extent in the management of the organization and only 3% are of the opinion that the BOD‟s
involvement in the management activities is to a very large extent.
With reference to MD; 20% state that organizational management is not at all the MD‟s
responsibility, 17% state that he is responsible only to a small extent, 23% state that he is
responsible to a moderate extent only, 12% claim that he play a large role in the management of
organization, 28% claim that he plays a very large role in the management of the organization.
With reference to CEO; 29% of the respondents state that the CEO does not handle the overall
management of the organization, 6% state that the CEO is involved only to a small extent, 11%
claim that he is moderately involved in the overall management of the organization, 14% are of
the opinion that the CEO contributes largely to the overall management of the organization, 40%
state that the CEO contributes to a very large extent in the overall management of the
organization.
With reference to Management Team; 40% state that they are not all responsible for the
organizational management, 3% claim that the management team handles the organizational
management only to a small extent, 20% state that they contribute moderately to the overall
management of the organization, 9% state that they contribute largely to the overall management
and 28% of the respondents state that the management team contributes very significantly to the
overall management of the organization.
With reference to Contracted Manager; 97% of the respondents are of the opinion that contracted
manager‟s are not in charge of overall management of the organization and only 3% believe that
they contribute to a very large extent in the management of the organization.
From the above frequency tabulation it is evident that the MD & CEO are the two members
within the organization who are entrusted the function of overseeing the management of the
organization.
Methods
TABLE 6.11: CORDINATION AND CONTROL TECHNIQUES
Response
Direct
Informal
271
Cooperation
supervision
No extent
Small extent
Moderate extent
Large extent
meetings with
between different
employees
departments
F
%
F
%
F
%
2
6
14
40
5
14
1
3
7
20
9
26
12
34
2
6
7
20
6
17
9
26
6
17
14
40
3
8
8
23
35
100
35
100
35
100
Very large extent
Total
A study of this table provides an insight as to the techniques employed to bring about
coordination and control within the organization.
There are three techniques that have been studied in this analysis, direct supervision, Informal
meetings with employees and cooperation among different departments.
With reference to direct supervision; 6% state that direct supervision is not practiced by the
management, 3% state that it is practiced only to a small extent, 34% state that moderately this
technique is practiced by the management, 17% state that to a large extent the management
adopts direct supervision for maintaining coordination and control and 40% state that to a very
large extent it is practiced by the management.
With reference to informal meetings with employees; 40% feel that it is not practiced by the
organizations, 20% claim that to a small extent it is practiced by the management, 6% are of the
opinion that it is practiced moderately by the organizations, 26% feel that it is practiced by the
management to a large extent and only 8% state that informal meetings with the employees are
practiced significantly in the organizations.
With reference to cooperation among different departments, 14% feel that there is no cooperation
among different departments, 26% feel that cooperation among departments exists only to a
small extent, 20% state that it mutual understanding exists to a moderate extent, 17% state that to
272
a large extent the departments cooperate with each other, 23% of them state that cooperation
among departments exists to a very large extent.
From this it can be inferred that direct supervision coupled with mutual understanding among the
departments is the way the corporations coordinate and control organizational activities.
TABLE 6.12: DECISION MAKING APPROACH
Decision making Frequency Percentage
approach
Centralized
25
71
Decentralized
10
29
Total
35
100
This tabular analysis provides information regarding the distribution of power and authority in
the organization. From the table it can be observed that 71% of the organizations of
Visakhapatnam IT Sector are centralized and 29% of the organizations are decentralized.
This implies most of the organizations decisions are made by the top management. It can thus be
inferred that this characteristic is typical of functional type of organizational structure.
TABLE 6.13: DISTRIBUTION OF AUTHORITY
Members
Response
No extent
Small extent
Moderate extent
Large extent
Top
Middle
First level
management
management
management
F
%
F
%
F
%
0
0
0
0
17
49
0
0
13
37
9
26
1
3
9
26
5
14
13
37
13
37
4
11
21
60
0
0
0
0
Very large extent
273
Total
35
100
35
100
35
100
This statement provides us information on how power distribution takes place in the
organization. The three management levels were taken into account here.
With reference to top management, 3% state that moderate power lies in the hands of the top
management, 37% feel that large extent of power lies in the hands of the top management, more
than half the respondents that is 60% state that top management has significant power in their
hands. With reference to middle management, 37% state that they have power only to a small
extent, 26% claim that they have power to a moderate extent, 37% claim that power is held by
the middle management to a considerably large extent.
With reference to first level management, 49% state that first level management has no power at
all, 26% of the respondent‟s state that middle management is vested with power only to a small
extent, 14% are of the opinion that they have moderate power vested in their hands and 11%
state that first level management has power to a large extent.
This analysis brings us to the conclusion that there is distribution of power among the first two
levels of management. Almost all power is distributed between first level and second level
management.
TABLE 6.14: REPORTING STRUCTURE PRACTICED
Decision making approach
Frequency Percentage
Unity of command
20
57
Multiple chain of command
6
17
Reporting is based on strategies adopted
9
26
Total
35
100
The purpose of this table is to view the reporting structure practiced in the organization.
From the above table it can be observed that 57% of the respondents are reporting to one
manager, 17% state that they are practicing multiple chain of command and 26% state that their
reporting pattern is based on the strategies adopted.
This analysis implies that the reporting pattern followed by the IT corporations is of unity of
command.
274
TABLE6.15: STRUCTURAL HIERARCHY
Type of structure
Frequency Percentage
Tall
19
54
Flat
16
46
Total
35
100
From this analysis we can deduce layers of management present in the corporation.
It is observed that 54% of the respondents have a tall organizational structure and 46% have a
flat organizational structure.
It can thus be inferred that most of the organizations have many layers of management, which is
also indicative of centralized type of organization.
Strategic behavior
TABLE 6.16: STRATEGIC BEHAVIOR
Response
No extent
Small extent
Moderate extent
Large extent
Customer
Competitor
Innovation Internal cost
oriented
oriented
oriented
oriented
F
%
F
%
F
%
F
%
1
3
7
20
1
3
8
23
2
6
7
20
4
11
11
31
3
8
16
46
1
3
2
6
17
49
5
14
20
57
7
20
12
34
0
0
9
26
7
20
35
100
35
100
35
100
35
100
Very large extent
Total
275
An analysis of the table will help us to understand the basis on which organizations corporate
decisions are made. For the purpose of analysis four basic attributes have been taken into
account, they are customer oriented, competitor oriented, innovation oriented and internal cost
oriented.
From the above table it is observed that with reference to customer oriented attribute; 3% state
that the organization is not at all customer centric, 6% claim that they are customer centric to
some extent, 8% state that they are customer centric to a moderate extent, while 49% that is
almost half the respondents state that the organizations are customer centric to a large extent and
34% of the respondents claim that to a significant extent the organizations are customer centric.
With reference to competitor oriented attribute; 20% state that the organizations are not at all
competitor oriented, another 20% also state that they are competitor oriented only to a small
extent, 46% state that they are moderately oriented towards competitors and 14% state that they
are largely oriented towards the competitor.
With reference to innovation as an attribute; 3% state that innovation centric attitude is not at all
adopted by the organization, 11% state that innovation influences the decision making process
only to a small extent, 3% of the respondents state that innovation influences the organization to
a moderate extent, 57% claim that the innovation factor influences the organization to a large
extent and another 26% state that to a very large extent innovation plays a key role in the
corporate decision making process.
With reference to internal cost; 23% of the organizations state that this is not a guiding force
behind their corporate decision, 31% claim that the internal cost factor influences the decisions
to a small extent, 6% state that this factor influences to a moderate extent only, 20% state that
this factor influences to a moderate extent only and another 20% claim that the influence of
internal cost on the decision making process is to a very large extent.
The above analysis does not give a clear indication that there isn‟t only one orientation which
influences the corporate strategic decision making process. It can thus be implied that the
corporate decisions of the organization are not influenced by any one factor but by a host of
different factors in different variations.
276
Approach
TABLE 6.17: WORK APPROACH PATTERN
Response
A team
A delegate to the
approach
appropriate level and self start
approach
No extent
Small extent
Moderate extent
Large extent
A motivation
approach
F
%
F
%
F
%
0
0
1
3
11
31
0
0
5
14
9
26
3
8
4
11
7
20
11
32
19
55
8
23
21
60
6
17
0
0
35
100
35
100
35
100
Very large extent
Total
An analysis of this table provides an insight into work culture of the organization. From the
above frequency table the manner in which tasks are allocated and carried out can be clearly
understood. The three work styles considered here are team work approach, a delegate to the
appropriate level approach and a motivation and self start approach.
277
It can be observed that with reference to team work approach; 8% of the respondent‟s state that
team work approach is practiced to a moderate extent, 32% state that to a very large extent this
method is practiced in the organization and more than half the respondents state that to a very
large extent it is practiced.
With reference to a delegate to the appropriate level approach; 3% state this kind of work style is
not practiced at all in the organization, 14% state that delegate to the appropriate level is
followed to a very small extent. 11% state that it is followed moderately throughout the
organization, 55% just more than half state that it is largely practiced by the management and
finally 17% state that to a very large extent this kind of work style is adopted by the
corporations.
With reference to a motivation and self start approach; 31% state that a self start approach to
work is not at all practiced by the organizations, 26% claim that it is practiced only to a small
extent, 20% state that it is practiced to a moderate extent in the organizations and 23% state that
it is largely adopted method in the organizations.
The conclusion that can be drawn from the above analysis is that team work is pattern followed
Patterns
of their tasks to achieve organizations goals and objectives.
by the organization
to execute
communication
TABLE6.18: COMMUNICATION PATTERN
Response
No extent
Small extent
Moderate extent
Large extent
Memo &
Formal
Informal
circular
meetings
meetings
F
%
F
%
F
%
F
%
7
20
0
0
6
17
0
0
16
45
3
9
9
26
2
6
3
9
3
9
8
23
6
18
6
17
15
42
8
23
10
28
278
Email
Very large extent
3
9
14
40
4
11
17
48
35
100
35
100
35
100
35
100
Total
From studying the above presented data information regarding the communication within the
organization can be understood.
Generally the common types of written/verbal communication have been considered here like
memos, formal meetings, informal meetings and email.
From the above table it is observed that with reference to memos 20% state that memos are not at
all in vogue these days, 45% state that to a small extent memos are used by organizations, 9%
claim that to a moderate extent memos are still circulated within organizations, 17% state that to
a very large extent communication takes place through memos and only 9% claim that to a very
large extent memos are used for communication.
With reference to formal meetings; 9% state that management communicates through formal
meetings only to a small extent, another 9% state that formal meetings take place to moderate
extent, 42% claim that to a large extent organizations conduct formal meetings and 40% state
that to a very large extent organizations regularly hold formal meeting.
With reference to informal meetings; 17% state that management does not have informal
meetings with their employees, 26% state that to a small extent management has informal
meetings, 23% claim that to a moderate extent informal meetings are held, another 23% claim
that to a large extent informal meetings are conducted in organizations and only 11% state that
these kind of meetings are conducted to a very large extent in organizations.
With reference to email; 6% state that email is used for communication only to a small extent,
18% state that email is used to a moderate extent, 28% state that email is used to a large extent
and 48% nearly half the respondents state that email is used to a very large extent to
communicate by the organizations.
279
It can be inferred that most of the corporations communicate through formal meetings and email.
TABLE 6.19: MEMBERS FRAMING HR POLICIES
Members
Response
BOD
MD
CEO
CEO & HR
manager
No extent
Small extent
Moderate extent
Large extent
F
%
F
%
F
%
F
%
21
60
8
23
8
23
6
17
6
17
6
17
8
23
15
43
4
11
2
6
4
11
5
14
3
9
6
17
6
17
2
6
1
3
13
37
9
26
7
20
35
100
35
100
35
100
35
100
Very large extent
Total
The above table provides us an insight into as to which organizational member plays a crucial
role in framing the HR policies and procedures.
For the purpose of analysis the following key members of the organization have been taken into
account, they are BOD, MD, CEO, and CEO& HR.
From the above table it is observed with reference to BOD, 60% state that they do not participate
in framing HR policies, 17% claim that they do contribute but only to a small extent, 11% state
that they moderately contribute in formulating the HR policies, 9% state that they contribute to a
large extent and 3% claim that they contribute to a very large extent.
With reference to MD, 23% state that the MD does not contribute to the development of HR
policies, 17% claim that the MD contributes to a small extent only, 6% state that the MD‟s
contribution is to a moderate extent only, another 17% state that the MD contributes to a large
extent and 37% claim that the MD contributes significantly in framing the HR policies and
procedures.
280
With reference to CEO, 23% state that the CEO does not contribute at all to the development of
HR policies, 23% state that the CEO contributes only to a small extent in the framing of HR
policies and procedures, 11% state that his contribution is only to a moderate extent, 17% claim
that the CEO actively participates contributing to a large extent and finally a higher percentage
of 37% claim that there is significant contribution from the CEO in terms of framing the HR
policies and procedures.
With reference to CEO& HR Manager, 17% state that the they do not contribute at all, 43%
claim that they contribute to a small extent in the development of HR policies & procedures,
14% state that their contribution is limited to a moderate extent, 6% claim that they contribute to
a large extent and finally 20% state that they contribute to a very large extent in the development
of HR policies and procedures.
The conclusions that can be deduced from the above analysis are that the CEO & the HR
together frame and design the Human Resource policies and procedures.
TABLE 6.20: CONSISTENCY OF HR POLICIES WITH MISSION
Response
Frequency
Percentage
No extent
0
0
Small extent
1
3
Moderate extent
10
28
Large extent
17
49
Very large extent 7
20
Total
100
35
The aim of the above table is to evaluate whether the HR so formulated are in unison with the
organizational objectives and mission statement.
From the table presented above it can be observed that 3% state that the HR policies are in
agreement with organizational objectives only to a small extent, 28% claim that the HR policies
match the objectives to a moderate extent only, 49% almost half the respondents state that the
HR policies and organizational objectives are in agreement to a large extent and finally 20%
state that to a very large extent the organizational objectives and HR policies are consistent with
each other.
281
It can be inferred that the HR policies are in agreement with the mission statement and objectives
formulated by the organization
TABLE 6.21: COMMUNICATION OF HR POLICIES TO EMPLOYEES
Response
Frequency
Percentage
No extent
0
0
Small extent
2
6
Moderate extent
10
29
Large extent
19
54
Very large extent 4
11
Total
100
35
An understanding of this table will provide an insight into whether employees are communicated
about the HR polices.
It is observed that 6% state that they are unaware of the HR policies, 29% claim that they know
some information about HR policies, 54% more than half the respondents state that they are
aware to a large extent about the HR policies and procedures and 11% state that the employees
are aware of HR policies to a very large extent.
It can thus be implied that the employees are well informed about the HR policies and
procedures.
TABLE
6.22: CULTURAL INFLUENCE
Members
Response
Productivity
Quality of
performance
No extent
Small extent
F
%
F
%
1
3
1
3
6
17
5
14
282
Moderate extent
Large extent
10
29
12
34
15
43
5
14
3
8
12
35
35
100
35
100
Very large extent
Total
This table attempts to establish the influence of culture on decision making dimensions. Two
major dimension of decision making have been considered here they are productivity and quality
of performance.
It is observed that with reference to productivity, 3% believe that culture does not influence
productivity, 17% state that culture has a small impact on productivity, 29% state that culture
moderately influences productivity, 43% state that culture has a large impact on productivity and
a small percentage of 85 feel that it has a very large impact on productivity.
With reference to quality of performance; 3% state that culture has no impact on performance,
14% claim that culture has a small impact on quality of performance, 34% state that culture has a
moderate impact on quality of performance, 14% claim that it has a large impact on quality of
performance and 35% claim that culture influences the quality of performance to a very large
extent. From the above tabular analysis it can be deduced that all employees are of the belief that
culture has an impact on both productivity and quality of performance.
TABLE 6.23: CONSISTENCY OF CULTURE WITH OBJECTIVES
Response
Frequency
Percentage
No extent
0
0
Small extent
2
6
Moderate extent
9
26
Large extent
13
37
Very large extent 11
31
Total
100
35
This statement explains the consistency of the organizational culture with corporate objectives.
283
It can observed that 6% state that the organizational culture and corporate objectives are in
agreement with each other, 26% state that to a moderate extent the organizational culture is
consistent with the objectives of the organization, 37% that to large extent there is consistency
between organizational culture and corporate objectives and 31% feel that to a very large extent
they are in agreement with each other.
From this it can be concluded that in most of the organizations there is consistency between
organizational culture and corporate objectives.
TABLE 6.24: CULTURAL COMPATIBILITY WITH EMPLOYEE’S DIVERSE
BACKGROUND
Response
Frequency
Percentage
No extent
0
0
Small extent
2
6
Moderate extent
9
26
Large extent
17
48
Very large extent 7
20
Total
100
35
This table measures the compatibility of organizational culture with background of the
employees.
It is observed that 6% state that to a small extent these two variables are compatible to each
other, 26% state that to a moderate extent only these two variables are compatible with each
other, 48% state that the cultural compatibility with employee‟s diverse background is visible in
the organizations to a large extent and 20 state that to a very large extent there is consistency
between organizational culture and employee‟s diverse back ground.
The above analysis implies that the organizations of are maintaining a conductive environment
which supports and encourages multicultural work force.
6.07: INFERENCES
The CEO and the MD are responsible for designing the organizational
structure.
284
Formulation of the organizational structure is conceptualized keeping in
mind the leadership, technology and strategies adopted.
The organizational structure followed by the Visakhapatnam Information
Technology Sector is Functional type of structure.
Since the period of inception organizations have experienced only
moderate changes in the organizational structure.
Leadership change and adoption of new strategies were there the driving
internal forces that brought about the moderate organizational structural changes.
The main external element that worked as a push factor for structural
changes was recession and other environmental factors.
The overall management of the organization is entrusted to the MD & the
CEO.
The organizational planning is carried out by the manager in consultation
with employees
The organizations have a centralized structure with power held in the top
and middle rungs of the hierarchy.
Unity of command is the reporting structure practiced in the corporations.
The corporations are characterized by tall structure with many layers of
management.
The corporate communication takes place through formal meetings and
email.
Work style pattern adopted by the IT sector companies is Team Work
Approach.
The HR policies are formulated by the CEO & the HR manager.
The HR policies formulated are consistent with organizational objectives
and goals.
The HR policy framework and procedures are clearly communicated to
the employees.
Organizations are firm believers of the fact that culture has an impact on
productivity and quality of performance.
Organizational culture is consistent with corporate objectives and goals.
285