Organisational Structure and Importance

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Questions and Answers

What is one advantage of a functional structure for organization?

Reduces the need for inter-departmental communication.

Encourages diverse skill sets among employees.

Allows for rapid response to market changes.

Promotes efficient use of manpower. (correct)

Which issue may arise due to pursuing departmental interests over organizational interests?

Increased employee satisfaction.

Enhanced collaboration between departments.

Greater clarity in responsibilities across departments.

Difficulties in production due to conflicting designs. (correct)

How does a functional structure facilitate control within a department?

By fostering specialization through varied tasks.

By standardizing communication methods.

By enhancing task-related similarity among employees. (correct)

By discouraging hierarchical management.

What can be a disadvantage of a functional structure?

May result in inflexibility within departments. Signup and view all the answers

What is one potential effect of increased occupational specialization?

Improved operational efficiency. Signup and view all the answers

How does a functional structure impact economies of scale?

By promoting cost efficiency through specialization. Signup and view all the answers

What outcome may arise from the lack of clear separation of responsibilities?

Inter-departmental conflicts. Signup and view all the answers

What is a benefit of focusing on a limited range of skills in employee training?

Facilitates quicker training processes. Signup and view all the answers

What was considered the most important step for Wipro to become a global giant?

Restructuring the company Signup and view all the answers

How does Wipro manage its various subsidiaries?

By assigning responsibilities to each subsidiary Signup and view all the answers

Which of the following describes Wipro's subsidiaries in terms of their financial independence?

They operate with their own accounting and personnel Signup and view all the answers

What is a main focus of Wipro's restructuring efforts?

Improving customer orientation Signup and view all the answers

Why did Wipro separate itself into several subsidiaries?

To focus on individual product lines Signup and view all the answers

Which characteristic typifies the decentralized management approach of Wipro?

Subsidiaries have the autonomy to make decisions Signup and view all the answers

What is a likely advantage of Wipro's divisional organization structure?

Clear focus on different product lines Signup and view all the answers

Which statement best describes the self-sufficiency of Wipro's subsidiaries?

They can independently manage their operations and finances Signup and view all the answers

What is a key characteristic of a formal organisation?

Well-defined jobs with authority and responsibility Signup and view all the answers

What is one of the limitations of the formal organisation?

Procedural delays due to rigid chains of command Signup and view all the answers

Which of the following descriptions best fits informal organisation?

A network of relationships without defined authority Signup and view all the answers

Which aspect does a formal organisation prioritize over interpersonal relationships?

Work to be performed Signup and view all the answers

What does formal organisation enable regarding employee behaviour?

Predictability through specific rules Signup and view all the answers

What can result from poor organisation practices in a formal setting?

Insufficient acknowledgment of creative talent Signup and view all the answers

What is the primary focus of the formal organisation as described?

Achievement of common objectives Signup and view all the answers

What does the concept of authority in a formal organisation entail?

Defined responsibilities and oversight Signup and view all the answers

What is a disadvantage of a divisional structure?

Departmental conflicts Signup and view all the answers

Which advantage is associated with an informal organization?

Speed of communication Signup and view all the answers

What is a potential conflict arising from functional structures?

Functional empires Signup and view all the answers

What is a primary disadvantage of formal organization?

Procedural delays Signup and view all the answers

Which advantage of a divisional structure is emphasized over others?

Product specialisation Signup and view all the answers

What is a primary advantage of decentralisation in an organization?

Faster decision-making processes Signup and view all the answers

How does decentralisation impact the levels of productivity within departments?

It increases productivity by fostering competition among departments. Signup and view all the answers

What is a consequence of the slower flow of information in a centralised system?

Decision-making is hindered. Signup and view all the answers

Which aspect of decentralisation helps ensure departments are accountable for their performance?

Direct competition among departments Signup and view all the answers

What is identified as a disadvantage of centralisation?

It reduces the speed of decision making. Signup and view all the answers

How does decentralisation lead to better control in an organisation?

By evaluating performance at each departmental level. Signup and view all the answers

What limitation is associated with decision making at higher management levels?

It diminishes the adaptability of the organisation. Signup and view all the answers

What scenario is most likely in a decentralised organisation?

Autonomy is given to lower management to operate independently. Signup and view all the answers

Study Notes

Organising

The process of organising involves creating a structure for an organization, assigning roles, and allocating resources

Importance of Organising

Helps to achieve goals by focusing efforts and resources
Coordinates activities to prevent duplication of effort
Improves efficiency through specialization and division of labour
Facilitates collaboration and communication

Types of Organisation Structures

Functional structure groups employees based on their expertise or skill sets, leading to specialisation and efficiency
- Advantages: Improved efficiency through specialization, better control, increased managerial efficiency, easier training
- Disadvantages: Potential conflicts between departments, limited career development opportunities, lack of flexibility
Divisional structure groups activities based on product lines or markets
- Advantages: Integration, product specialisation, greater accountability, flexibility, better coordination, increased initiative
- Disadvantages: Potential conflicts between divisions, higher cost, neglecting overall organizational interest, need for more general managers
Formal structure is a system of defined roles, responsibilities, and authority established by management
- Advantages: Clear roles, accountability, unified command, goal focus
- Disadvantages: Procedural delays, limited creativity, inflexible
Informal structure emerges spontaneously through interaction among employees
- Advantages: Fast communication, social fulfillment, addressing limitations in formal structure
- Disadvantages: Disruptive force, resistance to change, prioritizing group interests

Decentralisation

Decentralisation involves distributing decision-making power to lower levels of management
Advantages: Faster decision-making, improved responsiveness to local conditions, increased job satisfaction, reduced workload for top management, better control
Disadvantages: Poor coordination, potential conflicts between departments, lack of uniformity across the organization

Wipro Example

Wipro Technologies, an Indian IT solutions provider, is restructuring to become a global giant
They have created subsidiaries for different product lines, aiming for improved customer orientation and decentralisation
They have transitioned from a centralised to a decentralised management system

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Description

Explore the key concepts of organizing within an organization, including its importance and various types of organizational structures. Understand the advantages and disadvantages of functional and divisional structures, and how they impact efficiency and collaboration.