Ques 3 How have you organization responded to the designed challenges? It is a centralized or decentralized? Is it highly differentiated?

? Can you identify highly integrated mechanism used by your organization? What is the match between the complexity of differentiation and the complexity of integrated mechanism that are used? Is behavior in the organization very standardized or does mutual adjustment play an important role in co-coordinating people and activities? What can you tell about the level of formulization by looking at the number and kinds of rules the organization use? How important is socialization in your organization? Challenges The first design challenge is selecting the levels of horizontal and vertical differentiation to reach organizational goals. Other design challenges include: balancing differentiation and integration; balancing centralization and decentralization; balancing standardization and mutual adjustment; and coordinating the formal and informal organizations. Though we have highly decentralized and differentiated organization still we have been facing the following challenges while operating and maintaining a balance1. Determining the level of differentiation 2. Deciding how to coordinate activities 3. determining who will make decisions 4. Deciding how tightly the organization will control employee activities Differentiation is the process of dividing labor. The first design challenge is to determine the level of vertical and horizontal differentiation. In an organization, individuals are assigned specific responsibilities; those with similar skills are grouped into functions, with two or more functions grouped into a division. As organizations grow, they differentiate into five functional roles: support, production, maintenance, adaptive, and managerial. Each role has a horizontal and a vertical dimension. Horizontal differentiation groups people into subunits. Vertical differentiation designs a hierarchy of authority and establishes reporting relationships to connect subunits. The second design challenge is balancing differentiation and integration. As an organization becomes differentiated, more complex integrating mechanisms coordinate activities. The following seven integrating mechanisms, listed from simplest to most complex, are reviewed: 1. Hierarchy of authority 2. Direct contact 3. Liaison role 4. Task force 5. Team 6. Integrating role 7. Integrating department The integrating mechanism must facilitate communication and coordination for effectiveness, but unnecessary mechanisms are costly. The third design challenge is the balance between centralization and decentralization, each with advantages and disadvantages. Distributing decision-making authority influences employee behavior. Centralization results in predictability whereas decentralization fosters innovation. The fourth design challenge is balancing standardization and mutual adjustment. Standardization is facilitated through formalization, written rules, norms, and informal behavioral expectations. Socialization is the process of learning and internalizing norms. Standardization results in predictable behavior. Mutual adjustment relies on judgment rather than formalized rules for problem solving. If an organization desires predictability, it is highly centralized and relies on standardization. For innovation, an organization is decentralized and relies on mutual adjustment. A mechanistic structure is appropriate in a predictable, stable environment. An organic structure is appropriate in an uncertain, changing environment requiring flexibility. In reality, most organizations

are a combination of the two. The contingency approach tailors organizational structure to the sources of uncertainty. Our organization is highly decentralized and differentiated Decentralized- as it has got five divisions- Marketing and sales, Engineering, Production, administration, Supply Chain Each division is headed by 2 divisional managers and they report to the MD. One of them is a Japenese and the other is an Indian, the Japanese are the Executive directors and the Indian Divisional managers are managing executive officers supported by functional managers. Following is the division wise hierarchy Marketing and sales- This division has 6 functional managers, manager- sales , managerpre-owned cars, manager- spares, manager-market strategy development, managermarketing and manager- road safety Engineering Manager- Marketing, Manager- QA and Manager- Service Production- This division has 4 managers Manager- manufacturing, Manager-facilities planning, Manager- production and services, Manager- supply quality assurance Administration- 3 Managers- 3 Manager- Finance , Manager- IT and Manager- HR Supply Chain- Manager-Supply chain, Manager-component sourcing, Manager-Vendor management, Manager- consumables

Differenciated- Our organization with large amount of differentiation gives our departments separate components a great deal of autonomy. Business culture differs significantly between the various divisions of the organization. The division of work, labor and authority is clearly differentiated among all 5 departments Integrated mechanism- Our organization needs to integrate its teams into a hierarchy of authority to provide control so that teams coordinate with functions. As companies become large and complex, communication barriers increase. We have created an integrating role, a full-time position to improve communication between divisions. This differs from a liaison role, which is only part-time. Balancing Differentiation and Integration It is a challenge to balance differentiation and integration. Horizontal differentiation creates subunits to facilitate specialization; however, subunit orientations, perceiving ones role as a subunit member, emerge as an organization becomes complex. Integration and Integrating Mechanisms Subunit orientations make communication and coordination difficult. Integration or coordinating tasks, functions, and divisions, improves coordination and communication. (Table 4.1) The seven integrating mechanisms, from simplest to complex, include: 1. 2. 3. 4. 5. 6. 7. Hierarchy of authority specifies reporting relationships. Direct contact requires managers from different functions to meet to coordinate activities. Liaison role requires a manager to coordinate with other subunit managers. Task forces create a temporary cross-functional committee. Teams require different functional managers to coordinate activities. Integrating roles coordinate two or more functions or divisions. Integrating departments coordinate functions or divisions.

Is behavior in the organization very standardized or does mutual adjustment play an important role in co-ordinating people and activities? Balancing Standardization and Mutual Adjustment It is challenging to balance control through standardization with employee problem solving for mutual adjustment. Some functions, like accounting, require standardization, but others, like R&D, require risk taking. Integrating mechanisms, such as task forces and teams, increase mutual adjustment. Complex, uncertain tasks rely on mutual adjustment. An appropriate balance between standardization and mutual adjustment promotes creative and responsible behavior and therefore we have a balance of these in our organization with standardized methods where ever possible Standardization is facilitated through formalization, written rules, norms, and informal behavioral expectations. Standardization results in predictable behavior. In similar activities the there are standard methods for divisions like Administration and production, they will perform and deliver better in this way However other departments like R and D etc. depend and can be successful in mutual coordination giving them the scope for innovation and improvisation in which case we have these departments operate on mutual co-ordination In our organization Standardization and formal rules facilitate control and coordination. Marutis environment is more uncertain due primarily to changing consumer tastes. Marutis mechanistic structure is based on formalization and ensured standardization, but an uncertain environment has led to an organic structure. Franchisees can tailor menus and decor to local customers. Marutis challenge is to make its structure organic to promote flexibility yet maintain centralization to ensure standards of quality Socialization- means learning norms and unwritten rules. Socialization is the vehicle for coordinating and motivating employees. They learn organizational roles from members of their functions and the norm of providing excellent customer service. Employees receive company stock as a motivator. In an organization like ours Socialization is extremely important due as ours is a Matrix organization, it has vertical and horizontal differentiation. It is a complex organization in which case more interaction is required to be successful We have the following structured activities to achieve this objective. The frequency and structure might vary from department to department Best practice sharing Team Building trainings Informal team outings Breakout zones at each corners Formal management dinners Fun at work team Rewards and recognition ceremony at organization level

Ques 4- Does you analysis in Item 3 leave you to think that your organization confirms more to the organic or the mechanistic model of organizational structure? Briefly explain why you think its organic or mechanistic Marutis environment is more uncertain due primarily to changing consumer tastes. Marutis mechanistic structure was based on formalization and ensured standardization, but an uncertain environment has led to an organic structure. Franchisees can tailor menus and decor to local customers. Marutis challenge is to make its structure organic to promote flexibility yet maintain centralization to ensure standards of quality Our organization is highly decentralized and differentiated Organic structures encourage flexibility and decentralize decision making. Roles are loosely defined. Employees perform many tasks and work with people from various functions. Organic structures respond quickly to change- In which case Maruti keeps on working based on customer needs and demands Our organizations success of the organic structure was due to a policy of promoting from within the highest performing salespeople. The company has also created a system in which employees feel like they owned the company. The seven integrating mechanisms, that we have in our organization are: 1. 2. 3. 4. 5. 6. 7. Hierarchy of authority specifies reporting relationships. Direct contact requires managers from different functions to meet to coordinate activities. Liaison role requires a manager to coordinate with other subunit managers. Task forces create a temporary cross-functional committee. Teams require different functional managers to coordinate activities. Integrating roles coordinate two or more functions or divisions. Integrating departments coordinate functions or divisions.

Thus an organic structure is appropriate and is what we have in our organization with an uncertain, changing environment requiring flexibility.