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Review of Research Paper On Relationship Between Size Complexity and Organizational Structrure
Review of Research Paper On Relationship Between Size Complexity and Organizational Structrure
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For an MNC as it expands its business and spread across geographical location, it
keeps on adding more number of employees in order to cater to its requirements.
An IT company that we are going to refer here has its complexity also associated
with other factors like domain of the industry which it will serve, technologies to be
used, language barrier, geographical distance and quality assurance. Presently
almost in every IT company there is an onsite-offshore model is in place in order to
ensure round the clock delivery and real time issue fixing. The proper coordination
between the two sets of workforce onsite and offshore is necessary in order to
ensure a good quality service to its customer in order to build trust and keep the
business going. An organization has to take note of all the latest changes happening
in its market space so as to sustain in competitive market and maximize its
revenue.
In 1994, Cognizant started off as the in-house technology development center for
Dun and Bradstreet Corporation (D&B), a corporate and financial information
research firm. Francisco DSouza is the present CEO and Laxmi Narayanan is the
Vice Chairman and Ex-CEO. Initially it had around 200 people that time with a
revenue less than $2 million at the end of the first year of operation. There was no
need of any sort of formalization at that time as the number of employees and the
span of the projects were limited.
In 1996, owing to the split up of Dun and Bradstreet Corporation the company
became a division of the Cognizant Corporation. It started off adding third-party
clients and soon almost one third of its revenues started coming from the external
clients. It is one of the fastest growing top-tier consulting, IT services and BPO
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Company and is currently the second largest IT Company in India after TCS. In 2014,
it had more the 150,000 employees globally. The company is now providing IT
solutions practically across all domains with unique set of technical skills and
background knowledge required to serve hence the earlier structure will not hold
good.
The company had to change its organization structure because to the expansion in
terms of size and business. As the size of the employees increased and also the
span of technologies and industry segments which it caters (like BKFS, Insurance,
Health Care, etc.) also increased. Also the other reason being that the workforce is
separated by geographical distance as we can see that a person from onsite (lets
say in US) has to coordinate with the corresponding team at offshore (lets say in
India). It is required to have appropriate supervision mechanism both in offshore
and onsite but then the role that each of them has to play in their respective area of
specialization is not formalized to a great extent. It is up to the code developers
discretion to as to which approach he has to take to formulate his logic in order to
serve customers demand.
Presently it follows a matrix sort of structure where the various technologies form
the horizontals and the industry segment to which it caters is the vertical. Each of
the employee has a well-defined role that is expected of him for a smooth
coordination across different departments in a particular vertical (industry segment)
and also the same horizontal (technology area).
In all the examples that we have discussed we can see that size is not the only
criteria that can be used to conclude the extent of complexity or formalization. It
should also be noted that it is not necessary that a large organization has to be
highly formalized or a small or medium one to be less formalized. All these is
basically dependent on various other factors, out of all major being the type of
work. If there are other factors and mechanisms put to place properly then
formalization is not much required. To conclude we may say that size is undoubtedly
an important parameter when we study we study any organization structure but it
should not be often used to determine the complexity and formalization.
References:
1. http://home.iitk.ac.in/~amman/soc474/Resources/bureaucracy.pdf
2. http://www.thehindubusinessline.com/features/smartbuy/cognizant-from-astartup-to-a-multibilliondollar-giant/article5614907.ece
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