Organization Structure

Of Maruti Suzuki
Business Essay
It is basically a subsidiary company of Japanese automaker
Suzuki Motor Corporation which has a market share of 44.9 of
the Indian car market. Maruti offers a large number of cars
from the entry level Maruti car to the Sports Utility vehicle
Grand vitara. It is basically a first company in India who sells
more than one million cars in India. It may be renamed as in
India as Maruti Suzuki India limited. It was formed in February
1981and the original production was started mainly in 1983
with the car Maruti 800. The company basically exports more
than 50,000 cars and has the excessive selling in the
domestic market with more than 750,000 cars per year.
The company headquarters are on Nelson Mandela Rd, New
Delhi. The term Maruti is mainly used for the compact car
model as large number of compact cars is sold by Maruti. It
has manufacturing facilities located at Gurgaon and Manesar
south of Delhi.

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Maruti has face some problems with the labor force as it was
established 1983. There was a one recent incidence on 18th
July 2004 at Manesar plant. Manesar plant was hit by
violence as one of the worker as one of the auto factories
attacked supervisors and started a fire that killed a company
official and injured 100 managers, including two Japanese
expatriates.
The violent mob also affects nine policemen. The company's
General Manager of Human Resources had both arms and
legs broken by his attackers, unable to leave the building that
was set ablaze, and was charred to death.

Organization structure of
Maruti Suzuki
http://www.marutisuzuki.com/SustainabilityReport/images/org
anisational-profile-04-big.jpg

Organization Structure
Design At Maruti Suzuki
Maruti has a functional organizational structure with horizontal
linkages. The activities are divided based on the following
functions finance, marketing, engineering and sales, spares,
production, material, parts inspection, quality assurance,
human resource development, information technology, new
business and administration, The centralization is very low in
Maruti as the decision-making authority is quiet decentralized
and disturbed across all levels. it is a very big organization
and further divided into smaller divisions. There are 29
divisions in Maruti and are headed by one divisional head
which is a functional post. These divisions are divided into
132 departments and which are headed by one departmental
head which is again a functional post. In Maruti the
formalization is very high all the methods, procedures,
standards are written down formally. All the departments have
department procedures which describe the role of work of the

department as well as their responsibilities and work flow. The

procedures are approved by divisional head and are also
available for the concerned departments. In production shops
the standard operating procedures are displayed on the
workstations and are known as Maruti Operations standards.
The structure of Maruti is flat .Generally the employees are
divided into six functional heads namely workers and
technicians, supervisors, executives, section manager,
department manager and division manager.

Changes in structure
In view of increasing competition the automotive sector Maruti
has tried to use a project based structure to handle the
problems effectively. Around two year back in meeting of
senior and middle level executives to form teams which would
focus on specific goals. Around 30 teams of about 8-10
members are formed. These teams have specific mandates in
terms of cost reduction and new product development and
were given resources and authority in order to implement the
project.

For exampleOne team worked on value analysis and value engineering for
specific components for cost reduction. Another team worked

on improving JD power ratings that Maruti secured for IQS

(initial quality service). These teams were working on a high
priority and all the departments would likely to co-operate.
Also they reported to the JDM directly and this helped them to
sort out any problems they encountered. The best performing
teams were rewarded handsomely.

Organization structure at
Maruti
The organization structure of Maruti is somewhat inclined
towards a mechanistic structure but it cannot be called
absolutely because of presence of high degree of
decentralization. It has a functional structure with horizontal
linkages. The functional divisions finance, marketing, sales
focus on their respective functions. These divisions are further
divided into 29 divisions. The hierarchy consists of a divisional
head and then a departmental head.
Mechanistic structure is suitable for those organizations which
do not require frequent changes in their processes and the
environment is stable.

Features Of Organization
Structure at Maruti

The division of employees at six functional levels and their

further hierarchical divisions in different divisions mean that
the company wants to achieve perfection at each functional
level.
Their production is car and production occurs on a large scale
, it includes assembly line in which parts are added to a
product in a sequential manner using optimally planned
logistics to create a finished product.
The environment in the automobile sector is almost stable and
hence the flexibility in the structure is not required.
Each functional department tends to get perfection at its level.
At horizontal level it involves cross functional teams and
sometimes direct contact in the form of a coordinator from
each department who can communicate the progress in their
respective department.
Each function is separate at functional level and
communication and co-operation among functions are
responsibility of someone at the top hierarchy.
Communication is mostly vertical from department to division
and then directors.

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Main decisions are taken by directors in respective functional

divisions.
All these feature are in line with the mechanistic structures
which are economies to scale, and are designed to induce
people to behave in accountable ways.

Maruti has a Flat and

Decentralized structure
Structural elements
Specialization
As the Maruti have functional structure and division of labour
so there is high degree of specialization.

Centralization
Power is distributed within the hierarchy because there are
various persons who play a very crucial role in the
organization.

Formalization
The instructions, procedures are written down formally in the
organization and on the other hand departments have their
own formal procedures of doing work in an organization so
that they can achieve their objectives on time.

Complexity
Complexity arises because of structural complexity as there is
goal incompatibility between different departments.

Span of control
The span of control is generally at the top level is 3-6, 4-8 at
the middle level management and 0-8 at the lower level
management. In production level at lower level the span of
control is at40-50.

Problems faced by Maruti in

the organization structure
Lower level managers take decisions understanding the big
picture. While the top level managers have low information
about the local operations as compare to lower level
managers.
In decentralization organization there is lack of co-ordination
among the managers. This can be reduced by defining the
company policy and communicating throughout the
organization.
Lower level managers have objective that are different from
the objectives of the entire organization. For example some
mangers are interested in increasing the size of departments
as compare to profits. This problem can be overcome by
defining the performance appraisal which helps the managers
in defining their problems.
It may be difficult to tell about innovative ideas in a
decentralized organization. Someone in the organization have
the great idea which provide benefit to the organization but
without a strong central direction the idea cannot be shared
with and adopted by others in the organization.

Flaws in the organization

structure
The main flaw is that the employees are facing inter
departmental friction in many areas-

Parts inspection vs.

engineering
The Parts inspection department would consider the quality of
existing and new products. On the other hand managers in
the Engineering department want to reduce cost by localizing
the resources or parts. The process of localization requires
the sanction of parts inspection department and this causes a
conflict between both departments.

Marketing vs. others

The Marketing department mainly focuses on that the
customer expectations with the company are met or not.
However the recommendations that it suggests are not
communicated to the other departments that is engineering.
For Example- After analyzing the data from the customers
surveys the marketing department suggests that the audio

systems in Maruti would be of the Blaupukt barnd. This was

turned down however Suzuki had formed a tie up with Pioneer
to use its audio systems.

Quality vs. Others

The role of the quality department mainly brings this
department into conflict with other departments mainly
production and engineering departments. When the quality
department declares that the certain product or process is not
matching with the quality requirements, the concerned
department who has not maintains quality will always protest
against it as most of the times such tests are marginal.

Changes in structure
Rewards
Rewards and compensation should be evaluated on a regular
basis so that and which leads to greater linkage to the
employee performance and which also leads to increase the
goodwill of the company.

People

Frequent interactions with the different departments helps to

resolve the problems if any in the organization.

Processes
There should be more focus on quality assurance as they only
focus on very stringent other techniques.

Strategy
There strategy should be focused on more on changing needs
of the customers and also the changing scenario of the
industry.

Structure
As the Maruti is following presently functional structure which
has various conflicts in it so Maruti has to change its structure
according to their requirements so that there is no conflicts in
future and so that they will able to achieve organizational
objectives efficiently and effectively.
One major point is that there is a need of horizontal
integration between the various departments at departmental
level is required .The hierarchical level is is to be reduced

because the level of employees are quiet diversified which

created a complicated hierarchy.

Conclusion
Maruti has been successful if the company will be able to get
the comparative advantage .the flat decentralized structure
and the importance given to the employees go a long way in
creating harmonious and good working environment where
everyone focuses on achieving the objectives of the
organization efficiently and effectively so the company can
able to achieve profits in future

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