ISB Special

1. - What The Faff!!
Contents
Organizational Structure, Chart .................................................................................................................... 2
Structure of Org ............................................................................................................................................ 2
Division of Labor: Kaam Baato...Dard khud mit jayega............................................................................. 2
Centralization versus Decentralization: .................................................................................................... 2
Line Maaro, Authority Paao....Staff Research deke jaao .......................................................................... 2
Unity of Command .................................................................................................................................... 3
Formalization- Code Red or No Code? ...................................................................................................... 3
Types of Organization ................................................................................................................................... 3
Mechanistic Organizations:....................................................................................................................... 3
Organic Organizations:.............................................................................................................................. 3
Simple Structure ....................................................................................................................................... 4
MATRIX Organization .................................................................................................................................... 4
Types of Matrix (no..not Reloaded And Revolutions) ............................................................................... 4
Virtual/Network Organizations ..................................................................................................................... 5
Virtual Organizations ................................................................................................................................ 5
Network Organizations ............................................................................................................................. 5
Comparison of Structures- ONE SLIDE SLAP ................................................................................................. 6
Critical Success Factors ................................................................................................................................. 7
Appex Case Study .......................................................................................................................................... 7
APPEX EVOLUTION .................................................................................................................................... 8
NOVARTIS CASE............................................................................................................................................. 8

2. Organizational Structure, Chart
Bahut Authority hai Gabbar ke haathon mein..haan!
Chain of Command shows: Chained to me or to Chained to Gabbar ki Goli!
Span of Control: Arre o Samba...Kitne Aadme the ?
Hierarchical Level: No of people at each level
Structure of Org
Division of Labor: Kaam Baato...Dard khud mit jayega
Centralization versus Decentralization:
Gabbar Ltd= Centralized. Any Club at ISB= Decentralized (I hope!)
Line Maaro, Authority Paao....Staff Research deke jaao
Line functions= Production, Marketing, Sales
Staff Fucntions= HR, IT, Finance

3. Unity of Command
Of course, you don't want your employees to run around sayin "mere do do boss! mere do do boss!"
Formalization- Code Red or No Code?
If you are a code red organization, you CEO must really be of the kind "we follow orders or people die!"
A No Code Organization= SAS? I
Types of Organization
Mechanistic Organizations:
well defined jobs, hierarchical info, sab kuch high, span of control narrow, slow decision making, little
flexibility and low productivity.
Organic Organizations:
loosely defined jobs, free info, sab kuch low, span of control wide and productivity high

4. Main disadvantage of Divisional Structure is duplication and lack of synergy. Similar prob with gegraphic.
Team structure -Remember CHAK DE... team can become bigger than Organization. Kabir Khan won't
like it.
Simple Structure
Who says what's in a name? Here everything is clear!- less Formalization, less departments, more
control, more authority concentration, easier decisions making and suitable for small orgs.
And Now for the ONE..
MATRIX Organization
Wake up Neo!
The matrix structure groups employees by both function and product.
A matrix organization frequently uses teams of employees to accomplish work
Helps take advantage of the strengths, as well as make up for the weaknesses, of functional and
decentralized forms.
An example would be a company that produces two products, "product a" and "product b". Using the
matrix structure, this company would organize functions within the company as follows: "product a"
sales department, "product a" customer service department, "product a" accounting, "product b" sales
department, "product b" customer service department, "product b" accounting department. !
You: Wow! This is like almost best of both worlds! This Matrix Orgs...Do they exist for real?
Morpheus: What is real? How do you define real?
You: Aargh... Not again!!
Types of Matrix (no..not Reloaded And Revolutions)
Weak/Functional Matrix: A project manager with only limited authority is assigned to oversee the cross-
functional aspects of the project. The functional managers maintain control over their resources and
project areas.

5. Balanced/Functional Matrix: A project manager is assigned to oversee the project. Power is shared
equally between the project manager and the functional managers. It brings the best aspects of
functional and project-wala organizations. However, this is the most difficult system to maintain as the
sharing power is delicate proposition.
Strong/Project Matrix: A project manager is primarily responsible for the project. Functional managers
provide technical expertise and assign resources as needed.
Virtual/Network Organizations
Virtual Organizations
A firm that contracts out almost all functions
A virtual organization might not have even have a permanent office
Best Example would be your fashion industry ABC. There may be a brand ABC with no
company/office, but one designer XYZ outsourcing tailoring work to one guy, buying material
from Thailand & China to another and marketing to another.
Network Organizations
It is a collection of autonomous firms or units that behave as a single larger entity
Uses social mechanisms for coordination and control
Entities are subsidiaries or different legal entities
Egg Sample: ITC and its different divisions. Like Spices division will supply to not just ITC foods, but also
other companies. (now does this info count in my ELP? Anyone hear me??)

6. Comparison of Structures- ONE SLIDE SLAP

7. Critical Success Factors
Appex Case Study- Short Version
Shikhar Ghosh brought in a number of significant and radical structural changes in an attempt to
respond to its meteoric growth
Op performance improved, but brought friends like inefficiencies
the number and frequency of the changes has resulted in a work environment fraught with
fiefdoms, employee anxiety, and power struggles
Probls like Loss of customer focus & Lack of Innovation death knell for APPEX
Appex should undergo a substantive restructuring
Should consider Matrix Struc for enabling innovation, performance, and growth
Will reduce duplicity, increase flexibility
The matrix will provides a mechanism for Appex to leverage aspects of EDS’s infrastructure and
competencies

8. APPEX EVOLUTION
Timeframe Employees Revenue Structure Positive Effects Negative Effects
86-87 << 26 $1M Informal - Start-Up Innovative, committed workforce No underlying planning structure
Fluid, informal organization High-bandwidth communication No product accountability
Strong informal ties Fast, extensive idea generation Unclear reporting structure
Quick market response “Fire-fighting” mentality
Lack of customer service focus
Summer 88 < 26 Circular Free flow of information Employees “could not relate”
Non-hierarchical Theoretically customer-based Aimed at response, not planning
Concentric circles expanding out from Theoretically responsive structure Unclear decision hierarchies
executives to customers Customer became the “enemy”
Late 88 ~ 26 $2.3M Horizontal Impression of traditional structure Complete failure
Non-hierarchical Employees gave no response
Typical org-chart turned sideways
Feb 89 ~ 40 Hierarchical/Functional Focus on task completion Extensive politics
Separation into functional teams (e.g. Increased planning Development of sub-functions
Sales, Service, Operations) System for assessing accountability Polarization of teams
Reduction on cooperation
Poor skill/management matches
Aug 89 ~ 80 Addition of Product Teams Improved planning No system of authority
Overlay of functional representatives Application of management vs. skill Extensive executive decision support
for each key product to products No system of priorities between
products
Nov 89 ~ 100 $6.8M Addition of Business Teams Decision making authority “More tail than tooth” – too many
Intermediaries between product teams Resource allocation authority people in overhead
and corporate management Too many layers of management
Internal process focus
Loss of customer focus
Loss of P&L accountability
Aug 90 ~ 150 Divisions Improved accountability, budgeting, Resource allocations squabbles
Separation into three divisions, ICS, IS, and planning Cross-divisional antagonism
and Operations Extensive communications within Second guessing of Sr. Management
divisions No cross-divisional communication or
cooperation
Fractal structures
Financial gamesmanship
NOVARTIS CASE-No time for Drugs!
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