Designing Work Organizations

Organization design of Techno

Electronics Limited

Under the guidance of Prof. R K Agrawal

Group – 4
Bikash – PGP18
Chetan– PGP18
Deeppan K S – PGP18115
Dimitri – PGP18
C H Tarun Kumar – PGP18
Faiz Abdullah – PGP18117
About Videocon Industries Limited

Videocon Industries Limited is a large diversified Indian company headquartered in Mumbai. The group has
17 manufacturing sites in India and plants in Mainland China, Poland, Italy and Mexico. It is the third
largest picture tube manufacturer in the world. The group is a US$5.5 billion global conglomerate. The
Videocon group's core areas of business are consumer electronics and home appliances. They have recently
diversified into areas such as DTH, power, oil exploration and telecommunication.

Consumer electronics

In India, the group sells consumer products like colour televisions, washing machines, air
conditioners, refrigerators, oven sand many other home appliances, through a multi-brand strategy with the
largest sales and service network in India.

Since the entry of Korean Chaebols and their rising popularity in the Indian market, Videocon from a stand-
point of market leader has seen a slow decline to become a No. 3 player in India. The company continues to
do well in the washing machine and refrigerator segment.

Mobile phones

In November 2009, Videocon launched its new line of mobile phones. Videocon has, since launched a number
of handsets ranging from basic colour FM phones to high-end Android devices. In February 2011, Videocon
Mobile Phones launched the hitherto unknown concept of 'Zero' paise (1 paise is the 100th unit of 1INR) per
second with bundled SIM cards of Videocon mobile services for 7 of its handset models.

In July 2015, Videocon Mobiles launched its own flagship smartphone Videocon Infinium Z51+ in India. On
7 June 2016, Videocon Mobile launched its new smartphone 'Videocon Cube3 V50290’ in India. It includes
features like 12.7 cm (5 inches) screen with 5 Multi-Touch Point, Dragontrail X 2.5D Curved Glass, Quad
Core 64-bit Processor, Smart Gesture Support, 3000mAh battery, Android 6.0 Marshmallow OS, 4G with
VoLTE, 13MP Rear + 5MP Front Camera with LED Flash.

Techno Electronics Ltd:

Techno Electronics Ltd. Is the official plant for Videocon Electronic products. Located on the Kashipur-
Moradabad road, it is one of many plants located there for e.g. Surya Roshni and Naini Tissues, etc.

The reason for the location of such plants is tax benefits. Such areas fall under the Zila Parishad or Industrial
Development Yojanas. Generally Macro level organizations such as these prefer to invest their Capital
Expenses in newer states which offers a plethora of tax benefits. Such plants are shifted every 8-10 years once
they breakeven their Cap-Ex. Other attractions for the same include cheap unskilled labour available in
Industrial and neighbouring rural areas to recruit line staff. Also, as per Government mandate they have to
employ 60% of labour force from respective Home States.
The product lines at Techno Electronics consists of the following:

1. Refrigerator
2. Washing Machine
3. Plastic Molding Solutions
4. Mobile phone
5. LED TV’s

Before we explore the organizational Design and work culture of Techno Electronics let us throw some light
on Videocon Industries Ltd.

Videocon Industries Ltd offers range of products in televisions, washing machines, air-conditioners,
refrigerators, audio products, home theatre systems and microwave ovens. The company operates in four
segments: Consumer Electronics and Home Appliances, Crude Oil and Natural Gas, Telecommunications,
and Power. The company is engaged in manufacture, assemble and distribute a range of consumer electronics,
products and home appliances, including finished goods, such as television, home entertainment systems,
refrigerators, washing machines, air conditioners and other small household appliances and components, such
as glass shell, compressors and motors.

In the recent times however as they took to a series of careless expansions into Oil & Gas business, various
acquisitions, etc, they spiralled into a series of losses. They lost their one-time Market Capitalization of Rs
15000 Cr to a mere Rs 600 Cr now. However, for the purpose of this report let us limit our discussion to the
work environment and organization at Techno Electronics Ltd.

As stated earlier in the introduction the plant consists of 5 manufacturing divisions, i.e.

1. Refrigerator
2. Washing Machine
3. LEDs
4. Mobile phones
5. Plastic Molding Solutions (PMS)

The structure at the plant is that of a matrix structure. It consists of five heads of function and five heads of
division. The functional heads are as follows:
Functional Heads:

1. Human Resources
2. Logistics
3. Finance
4. Purchase
5. Utilities

The Matrix Structure of the organization is as represented below:

HR Finance Purchase Utilities Logistics

Refrigerators
LED
Mobile
PMS
Washing
Machine

For security purposes we were not allowed to visit the assembly lines. However, we got an opportunity to
interact with Mr. Jeetendra who is in the HR Function of the plant.

Let us dive straight into the hierarchical structure before exploring its effects, outcomes and employee
motivation.

The facility is headed by Facility Head. Under the Facility Head are the various Functions and Divisions.

Culture:

Organizational culture represents the collective values, beliefs and principles of organizational members and
is a product of factors such as history, product, market, technology, strategy, type of employees, management
style, and national culture; culture includes the organization's vision, values, norms, systems, symbols,
language, assumptions, environment, location, beliefs and habits.

Visible Culture:

Dress: We saw that there was no any uniform followed by the employees in the management section, neither
was there any distinction of dresses among various levels of hierarchy. Apparently, it was norm for the
members to wear formals or semi formals, except for occasions where people wore traditional clothes.
However, we were told that the labours either permanent or contractual were bound to wear the plant uniform
and necessary safety equipment.

Recreation: Since it is a manufacturing plant, the focus was to always improve productivity. In the past few
years, with more awareness regarding health and mental stress, the company has created facilities for indoor
games like carrom and badminton and outdoor games like cricket and volley ball. We were also told that they
have occasional matches among inter product divisions.

Recognition: Like every good organisation, they also have their own ways of appreciating the workers to keep
them motivated. They have a notice board called the HONORS BOARD, where the best employees of the
month from various levels of hierarchy are displayed. The HR told us that there were certain KPIs to select
these people and that this method of recognition was very effective in improving the workers’ productivity,
as every worker wanted their name to be there in the Honours Board. Some selected workers were given a
coloured SMILEY (Blue, Green and Yellow). These represented different token amount or surprise gifts
which the workers could encash whenever they wanted to.

Celebrations: Being a machinery dominant plant, they conducted the Vishwakarma Jayanti (the Hindu God
Architect) in a grand manner, during which the major machines are decorated, and a puja is conducted under
the supervision of a priest. Apart from this they also got together to celebrate occasions like Inauguration Day,
Independence Day and other festivals such as Ganapati Puja, Diwali and Dussehra while also distributing
sweets and gifts to each employee.

Invisible Culture: It refers to the various values, assumptions and beliefs of the organisation.

Behaviour: It is always said that, the ways a person (organisation in this case) treats an outsider says a lot
about his/her character. We observed that almost every person in this factory was embedded with hospitality
values. Starting from the security guard who was very kind unlike in many other companies, to lets us inside
the campus after listening to our tasks. Then we spoke to the receptionist who was quick to understand what
we exactly needed and was supportive enough to call the HR Head to set up a meeting. He also served us with
beverages while we waited for the HR. When we met the HR, Mr ………………… , we were surprised to see
that he was more than happy to take our questions, despite us not having any prior appointments. We also
spoke to one of the Chief Engineers was amazed when he knew that we were from the IIM and took interest
in answering some of our queries.
Philosophy:

With increasing awareness about the environmental impacts of the production process and its biproducts, the
organisation has made it a mandate to follow the 5R concept. The five Rs are shown in the give picture.

Reduce: The plant has taken conscious efforts to reduce the use of plastics in and around the campus. For e.g.
it has banned all types of plastics cups and replaced them with disposable paper cups, glasses and plates.

Reuse: The packaging materials that are useable are reused in some or other form. The plastic bags, packaging
nylon ropes are reused to reduce solid waste. Also, the electronic components are used up to maximum
potential before disposing off safely.

Recycle: All the paper scraps are collected regularly and sent for recycling, this recycled paper can be further
used for making workers’ passes and other ordinary receipts. Also, all the packaging cartons that they receive
while procuring other raw materials are recycled to get more cartons.

Return: In the past few years, the concept of E-waste has come into the picture which suggest that
irresponsible disposing of scraps containing harmful substances like lead, arsenic, cadmium etc have polluted
the air and water to a large extent. Therefore, the company have introduced policies like exchange of an
electronic product or even resale of the product. These old products are then collected and sent to the E-waste
management plant.

Relationship of Environment and Strategy to Corporate Culture:

Relationship of Environment and Strategy to Corporate Culture, As already mentioned, the company is a
production-based company, its strategic focus is more on improving the productivity and efficiency. The work
environment is very stable.
Impact of IT in organisation Design:

The following are the observations regarding the impact of Information technology in the plant that we visited:

Ease of communication: Communication became much faster with the evolution of technologies from fax to
email to video messages. This helped in closing deals from a remote place without both the parties being at
the same place. Another example was the internal communication among the hierarchy. For example, if a line
wanted to communicate to the product manager, he could easily do so with just an email, rather than taking
appointments or waiting outside the office.

Ease of Data Access: Decades back when there were no computers, many clerks were hired to record data
which led to bulks of data storage instruments like notebooks. With the advent of internet and computers and
internet, the data could be easily stored and replicated whenever and wherever required. Also, the time
required to look for a particular data was minimised to a large extent. As a result, the number of clerks were
reduced.

Ease of Accounting: As already mentioned above, people would use registers to record all sorts of financial
records, inventories and procurements and supply of goods. This made the process very inefficient which
required large manpower and was also prone to errors. The introduction of accounting software’s helped in
maintaining a centralised data which increased accounting efficiency.
The Contingency approach to the measurement of Organisational effectiveness:

This theory deals with how the organisation manages its external environment and combines it with its internal
environment in order to give product and service outputs. The resources are fed into the organisation which
performs a series of internal activities and processes and provide product or service outputs.

The company that follows uses a just in time format of resource management. This saves the company of the
additional warehousing cost; the figure shows the same.

Goal approach
When the market demand was high the organisation used to perform at its full potential but currently its
performing lower than what it is capable of

The current output figures are as follows.

The Operative goals of the organisation are met through a series of optimation techniques. They use just in
time process where they get the resources just before when they require the materials. This helps in reducing
the warehousing cost. The workers are so aligned that the work maintains a steady flow. The 250 permanent
workers are constantly dedicated to work on the assembly line and the contract workers are mainly on the
loading and unloading work. The divisional work is performed by the personal of the specific domain only.

The Profitability, growth, market share and ROI are as follows.

Internal process approach

The economic efficiency of the organisation is quite high as the processes are performed in a very efficient
manner. The organisation also promotes a positive work culture. Employees are rewarded for great work with
a smiley batch which they can encash. The spirit of the workers is quite high and they work in teams in order
to fulfil their demand. The employee’s suggestion is taken through weekly review meetings and this helps in
maintaining a bond with the management.
Most managers believe that happy committed employees are a measure of committed employees and positive
work culture and through our interviews we found out that the employees except a few here and there
were quite happy with their job out in the factory. Since the perspective of effectiveness differ from person to
person.

Organisational Structure
The stability of the organisation value for efficiency and a top down control whereas it is less flexible in terms
of learning and change as most of the work are performed in a very mechanistic manner.
Assessing External Environment

External environment plays a huge role in determining the functioning of an organization. So, it is imperative
for the organizations to assess the external environment and adapt to it.

Uncertainty for an organization can be measured across two dimensions of environment

1) Simple - Complex Dimension

2) Stable – Unstable Dimension

Simple – Complex dimension concerns “environmental complexity”, which refers to the number and nature
of external elements relevant to organization’s operations.

Stable – Unstable dimension refers to how frequent elements change in the environment.

Techno Electronics Ltd. operates in an environment of low to moderate uncertainty where there is

- High complexity with large number of external elements and elements being dissimilar(heterogeneous)
- High stability with things remaining same or changing slowly across a period of 6 months to 1 year

The external elements refer to the competitors, suppliers and customers in the environment. With the rather
stable environment, new players started to enter the industry, thus causing uncertainty for Techno Electronics
Ltd.

Adapting to Uncertainty

To adapt to the environmental uncertainty, Techno Electronics Ltd. follows mechanistic management process.
Important characteristics of the process are
1) Tasks are broken down into specialized, separate parts.

2) Tasks are rigidly defined.

3) There is a strict hierarchy of authority and control, and there are many rules.

4) Knowledge and control of tasks are centralized at the top of the organization.

5) Communication is vertical.

As discussed in the structure, Techno Electronics Ltd. has a matrix structure where the decision flows through
the hierarchy from top to bottom. The minor decisions are also taken by the top management and then
communicated to the workers. Each employee has specifically defined tasks that he or she is held accountable
for. As the environment is stable, this working style has been suitable for the organization.

Organization Strategy

Techno Electronics Ltd. emphasises more on reducing costs and improving efficiency. Its products are not
much different when compared to its competitors. As discussed above, it has a centralized authority where
decision making is reserved for the top management. These characteristics reflect that it follows low-cost
strategy to defend its market.

So, according to Porter’s competitive strategy classification, Techno Electronics Ltd. follows low-cost
leadership where the major focus is on cost reduction. Also, the wide range of products it makes target a larger
segment of customers.

Miles and Snow’s Strategy Topology classifies Techno Electronics Ltd. as a defender as it focuses more on
defending its market share by manufacturing standard products rather than trying to increase it through
innovation.
Organisational Change
There are two types of changes an organisation can follow. They are
1. Incremental change
2. Radical change.

Techno Electronics Ltd follows the incrementalistic model of the organisational change. This is because these
changes in the product, production process, supply chain and administration mainly undergo slight
modification in the design, parts and functionality, which has a very low level of uncertainty.

Suggestion scheme:
According to the company policy, an Employee can share his valuable idea or suggestion which is related to
the improvement of the quality/production process. There is a defined written format for any idea or
suggestion, given in the company's policy, which has to be strictly followed.
The idea or suggestion is analysed by the immediate heads of that employee in a hierarchical way, in the
direction from bottom to top level. And once is it analysed and verified by all the head till the factory head, it
is then presented to the suggestion committee at the Videocon corporate office at Gurugram. If the
idea/suggestion gets the clearance of implementation by the suggestion committee, based on the thorough
technical and feasibility analysis, the concerned idea/suggestion proposer employee get monetary and
promotional rewards.

The changes in the product, production process and the supply chain in incremental and not radical, with
continuous progression through technology and product improvement.
There are 4 types of organisational changes.
a. Technology: since the Videocon product manufactured in this factory are mainly home appliances, the
product design, innovation and improvement changes mainly depend on the R&D department and the
market trends
b. Product and service: any change in the production number and supply chain is mainly a result of a
change in the market supply and demand.
c. Strategy and structure: The organization strategy related to the product design, production process and
supply chain are decided by its corporate office located at gurugram. The organization follows the
matrix structure. The functional and divisional change in the structure is done by their respective heads.
d. Culture: The organizational culture is flexible in terms of the dress code. The other elements of culture
are ingrained strongly since the inception of this factory.

According to dual-core approach

At Techno electronics ltd, a top-down structure is followed. Since it has a matrix organisational structure,
every division is headed by a functional head and a divisional head. Every worker/staff has to report to their
immediate head. The top management heads interact directly with its lower level heads. The whole matrix
structure of the organisation very mechanistic in nature.

Decision making in Techno Electronics Ltd

Organisational Decision-Making processes, these are the processes of identifying and solving factory
problems, mainly related to the factory production processes, supply chain and the overall administration.
The problems related to the production processes are very uncommon and usually, don't happen on a regular
basis. The repetitive and routine decisions are mainly taken by the functional and divisional heads, as the
factory has matrix organisational structure, i.e. machines defect issues are handled by assembly line in charge.
The macro level decisions are taken by the Factory Head, i.e. issues related to changes in the production
process and administration or redesigning of the supply chain. Apart from this, every head has the power to
approve the valid leave application of his junior employee.

These decision-making processes helps in the continuous improvement of working practices, process and
personal efficiency etc. which happens mainly based on the change of technology and the market
supply/demand of the factory's product. The factory has norms and standards according to which changes are
implemented. For e.g., the quality improvements come under the TPM (Total Productive Maintenance)
section.

The quality improvements tools, under the TPM section, mainly has 7 QC (Quality control) tools:
a. Check sheets:
b. Histograms
c. Fishbone diagram
d. Pareto
e. Control charts
f. Scatter Plots
g. Stratification

These tools require technical analysis, only after which any decision can be finalized and implemented.
The factory uses the rational model of Decision making. The three stages process of the rational model are:
Stage 1: identify and state the problem
Stage 2: prove the alternate solution to the
Stage 3: select a solution and implement it