INSTITUTE OF BUSINESS ADMINISTRATION

KARACHI

FINAL EXAM
ORGANIZATION STRUCTURE AND CULTURE
SUBMISSION OF ASSIGNMENT BY MAY 15 MIDNIGHT

Answer all questions including main and sub-questions.

Case: UFIDA (B)

Case Questions:

Q1.What is the strategic intent of the company? Carry out a PESTLE analysis of the company (Refer to
Slides on “Strategy, Organization Design, and Effectiveness”

Answer
The strategic intent of the company is to grow itself as a leader in the field of software’s and remain dominant
by consistently being steadfast and having feedback from customers & front line employees and evolving itself
with the changing market trends.

PESTLE Analysis

Political

UFIDA is a billion dollar company, needs to have agreements with government officials to survive, likewise
they need to provide premium services to these members and have agreements with them in supporting in their
political campaigns enabling them better prospects for profitability their tenure. For operations set on different
regions, each regions would come independent Political affiliations thus different terms of agreement would be
negotiated with them.

Economic

The economic condition of the country will impact its sales as buying power of clients is crucial for business to
prosper and grow. Emerging markets provide growth chances, whereas, due to economic crisis even the clients
of developed countries suffer badly. Thus it is very essential for the company to keep an eye on the ongoing
financial circumstance of the country before going into the launching new product or going in to markets as in
weak economic condition business sustainability is difficult.

Socio-Cultural

Ufida has to deal with different social and cultural concerns during its operations in a different regions and also
has employees coming from different backgrounds and different levels of qualifications . Business has likewise
dealt with many concerns however have actually embraced to the regional environments by setting strong
corporate values and ethics throughout the company. Likewise, It has customized its products, practices and its
policies appropriately in order to be successful.

Technological
The company has become a leader in the field of management software and financial software by heavily
investing in its R&D division and has reaped the reward of its steadfast consistency in delivering successful
results and has the current mission to Boost business and social advance with information technology. If Ufida
is to remain one of the top ingenious companies, it should have a clear objective to be ahead of the rest when it
concerns technological advancements Venture.

Legal

Each nation has their own laws and policies, being an international business Enterprise have to strictly follow
those laws in their jurisdictions. Failure to do so, will lead to major legal repercussions. So, it needs to study or
hire a local law professional before beginning its operations in a particular nation.

Environmental

UFIDA has a current development objective to fulfillment of CSR (Protect the employees, preserve the
environment, participate in social welfare activities, boost civility and coexist with community). As With the
rising awareness amongst consumers about the ecological & ethical offenses of business, Organization needs to
make sure that it follows all the safety standards. Environmental damages, ethical misconducts are not
acceptable and in some nations the effects can be really severe. On the other hand it needs to do some Corporate
Social Responsibility practices to reveal the locals that it appreciates their environment and individuals.

a) How do you assess Wang Wenging as a Leader?

Answer;
As a leader, he posses all the characteristics of becoming successful. Since he was the one who had initiated the
business, he understood its needs and the type of employees required for the company to function properly. He
motivates his employees to be participative and would listen to understand their point of view and would
compare that to his. He would time and again would get involved with the employees to see their work
problems and would coach them. Following are the dominant leadership characteristics found within him.

 Steadfast
 Visionary
 People person
 Empathic
 Listener
 Coach

b) What is his style?

Answer,
A blend of Bureaucratic & Coach-Style leadership, as it is observed that he is determinant in progress of his
employees but in terms of decision making he has the final say.

c) What if anything worries you for the future?

Answer,
He cannot always work on two roles, one being with the customer and frontline managers and second being
in the part of executive management team, thus he needs to put in proper processes and systems in place so
that the organization can function properly. As the organization has grown to a stage where there is a need
processes and systems.
Q2.What is organizational culture? (Refer to slides on “Organizational Culture and Ethical Values”

Answer,
Watson (2006) emphasizes that the concept of culture originally derived from a metaphor of the
organization as ‘something cultivated’. Most academics and practitioners studying organizations suggest the
concept of culture is the climate and practices that organizations develop around their handling of people, or
to the promoted values and statement of beliefs of an organization (Schein, 2004). Schein (2004) highlights
that ‘the only thing of real importance that leaders do is to create and manage culture;
• that the unique talent of leaders is their ability to understand and work with culture; and
• that it is an ultimate act of leadership to destroy culture when it is viewed as ‘dysfunctional’
Culture therefore gives organizations a sense of identity and determines, through the organization's legends,
rituals, beliefs, meanings, values, norms and language, the way in which ‘things are done around here’. An
organisations’ culture captures what it has been good at and what has worked in the past.
Schein (1990) emphasizes that there are visible and invisible levels of corporate culture (the ‘culture
iceberg’ analogy - the visible levels (surface manifestations) of the ‘culture iceberg’ incorporate observable
symbols, ceremonies, stories, slogans, behaviours, dress and physical settings. The invisible levels of the
‘culture iceberg’ include underlying values, assumptions, beliefs, attitudes and feelings. Often, change
strategies focus on the visible levels.
• Values, norms, guiding beliefs, and understandings that are shared by members of an organization
– Taught to new members as the correct way to think, feel, and behave
• Organizational culture exists at two levels
– Observable symbols
– Underlying values

Provides sense of organizational identity

Two critical functions in organizations:
1. To integrate members so they know how to relate to one another
2. To help organization adapt to external environment
Internal Integration – collective identity and know how to work together
External Adaption – how the organization meets goals and deals with outsiders
Managers want a corporate culture that reinforces the strategy and structural design the organization needs
to be effective within environment.

• Culture is important to learning and innovation during challenging times

• Strong adaptive cultures often incorporate the following values:
1. The whole is more important than the parts
2. Equality and trust are primary values
3. The culture encourages risk taking, change, and improvement
 The internal process model involves a control/internal focus in which information management and
communication are utilised in order to achieve stability and control. This model has also been referred to as
a ‘hierarchical culture’ because it involves the enforcement of rules, conformity, and attention to technical
matters (Denison and Spreitzer, 1991). The internal process model most clearly reflects the traditional
theoretical model of bureaucracy and public administration that relies on formal rules and procedures as
control mechanisms (Weber, 1948; Zammuto, Gifford and Goodman, 1999) Bradley and Parker, 2001,
2006).

a) What is the culture of the company?

Answer

The Company is moving towards, Hierarchical Culture in which information management and
communication are utilised in order to achieve stability and control. because it involves the enforcement of
rules, conformity, and attention to technical matters. The internal process model most clearly reflects the
traditional theoretical model of bureaucracy and public administration that relies on formal rules and procedures
as control mechanisms, other notables are, Attentive management style, strict selection and attentive coaching,
High performance result from this it can be easily understood that there is a lot of measurement involved.

b) What aspects appeal to you? What worries you?

Appeals
1. It creates a defined structure for communication.
Within a hierarchical organizational structure, clear lines of communication are established for everyone.
Employees in entry-level positions would receive their daily assignments from their direct supervisor. The
direct supervisor is responsible for interpreting orders coming from their supervisors. That process continues
moving upward until it reaches the top individual in the structure. This makes it easier to plan and implement
business strategies quickly, assuming employees stick to the structure.

2. It offers multiple layers of authority within the company.

A hierarchical organizational structure communicates to internal and external parties about who holds what
authority within the business. As more authority is granted, more responsibilities are typically assigned. This
creates a clear structure for reporting, allowing for consistent movement of information up and down the chain
of command. For those who are looking to advance their career, this chart creates a path that they can follow.
3. It establishes a clear picture of authority.
Within the hierarchical organizational structure, there is a clear picture of who has authority and who does not
in the organization. This makes it easier to identify which managers have the power to allocate resources,
reward successes, or initiate disciplinary action proceedings. There is no confusion about who is in charge and
who is not in charge, which can be very useful during crisis situations.

4. It identifies places where duplication may exist.

The hierarchical organizational structure makes it possible to identify which teams share resources. It finds
places where there may be job responsibilities which overlap, costing the organization money. Although this
may cause employment losses over time, it creates more efficiencies within the financial profile of the
company, setting the stage for growth within an economy of scale over time.

5. It allows for specialization.

When there isn’t an outlined structure in place for an organization, it tends to cause managers to be responsible
for a variety of different tasks. That is especially true for small businesses, where one manager might be
responsible for marketing, human resources, and purchasing. When there is a hierarchical organizational
structure in place, it allows managers to divide responsibilities to the people in a logical way, creating an
additional layer of efficiencies.

6. It eliminates issues of indecisiveness.

Within the hierarchical organizational structure, there is always someone who is held responsible for the actions
or decisions that are made. There is no hiding from this accountability, even if one manager attempts to assign
blame to someone else. There is clear communication about who is in charge of what projects. This design also
makes it easier to keep track of ongoing activities, the status of projects, and the quality of work that is being
completed.

7. It takes the pressure off the entry-level worker.

In this type of structure, the power of decision-making is consolidated at the top of the company. That means
owners, founders, CEOs, and similar positions are responsible for making the organizational decisions which
affect everyone. In theory, these decisions should be made in consultation with a senior leadership team. For the
entry-level worker, that means the only stress placed on them are the deadlines they are required to meet.

Worries
1. It may cause a lack of collaboration.
When there is a hierarchical organizational structure in place, teams tend to stay within their defined structures.
Collaboration within a team still happens. Collaborating outside of a team silo can be difficult to accomplish.
People tend to stick together, competing for power, instead of working together as a whole to advance the
mission of the company.

2. It can cause managers to become territorial.

Within the hierarchical organizational structure, managers often become territorial about their power within the
company. They become defensive if other managers start trying to work with their employees. Instead of
looking at an organization-level issue with a clear mind, they might approach the situation from the perspective
of their department only. This creates a competition for power which can be destructive for everyone involved.

3. It may reduce internal innovation.

Clear reporting structures within a hierarchical organizational structure help a company be able to keep
information moving. It also creates a rigid structure which may limit innovation. If an employee approaches
their direct manager with an idea, which is rejected out-of-hand, then it discourages the employee from sharing
further. If that idea would have been accepted at a higher level in the organization, it could impact future
 revenues. That is why a bypass of the structure for sharing ideas is essential to the success of this traditional
structure.

4. It centralizes the power structure.

The hierarchical organizational structure works extremely well for large companies. It can be a challenge to
implement it on the small business level. That is because the structure can cause some owners to begin being
involved in the decisions of daily operations. It may encourage a lack of delegation, which reduces the overall
productivity that is available. Instead of putting leaders in charge of big-picture decisions, it can encourage
some to be involved in the real-time implementation of needs.

5. It creates a lot of bureaucracy that must be managed.

When a business begins to grow, the hierarchical organizational structure must also grow. When there is more
bureaucracy, the pattern of growth tends to slow down. In time, that can cause a company to become too top-
heavy with their organizational chart, which makes the organization less responsive when fast decisions must be
made. Requests are forced to travel up the chain of command, then back down again, which can be destructive
when dynamic movement is required.

6. It may create communication barriers.

Although the hierarchical organizational structure is intended to improve communication, it may hinder it
instead. Some companies do not permit workers to skip layers within the chain of command. That may cause
some workers to avoid communicating at all because they distrust their direct supervisor. It can also cause
teams to create their own jargon, which makes it difficult to communicate internally. It is not unheard of to have
teams purposely withhold information because it would benefit someone other than themselves.

7. It can create confusion.

When a manager is not available within the hierarchical organizational structure, there is a void that must be
filled for the benefits of this structure to be maintained. If a manager does not fill this void, a team member will
often try to step into the role. Even if the manager has left on vacation for a day or two, this change in
leadership can create confusion when the wrong people step into the chain of command. There must be a clear
policy in place which dictates who replaces a missing manager to avoid this confusion.

8. It creates a structure of unequal treatment.

The hierarchical organizational structure should have the base of the pyramid at the top and the point of it at the
bottom. That is because the work of the entry-level workers is what allows the organization to operate properly.
Far too often, the top of the pyramid is given far too much respect, while those at the bottom of the pyramid are
given far too little. When there isn’t equality in the respect being provided, workers become less motivated, they
can become less respectful. They may even decide to quit, which is problematic if that person is a high-skill
worker or key employee. These issues become even more problematic if the leadership team is awarded perks
that may not have been earned.

c) What is the challenge for the future?

One of the prominent challenge is reduce in innovation due to systems and processes secondly, ability and size
still not adequate to address the market opportunities, thirdly, tactical problems. Likewise, the ability required to
make use of talents is very critical. Moreover, steadfast may become conservative. As a result, it may grow
slowly, which consequently, will lead to problems.

d) Is culture 2.0 a strength or a weakness?

The culture is dependent upon systems and processes in place. If following lacking are improved, then it will
greatly contribute to the success of the company.
1. It may cause a lack of collaboration.
2. It can cause managers to become territorial.
3. It may reduce internal innovation.
4. It centralizes the power structure.
5. It creates a lot of bureaucracy that must be managed.
6. It may create communication barriers.
7. It can create confusion.
8. It creates a structure of unequal treatment.
As objective are well elaborated and high performance is mandatory, processes of assessment mechanism,
reward the advanced, and phase out those that lag behind are put in place. 70/20/10 model for best results.
Guideline for managers and employees are well defined.

Q3.Discuss various types of organizational structure along with their pros and cons.

1. Hierarchical org structure

The pyramid-shaped organizational chart we referred to earlier is known as a hierarchical org chart. It’s the
most common type of organizational structure––the chain of command goes from the top (e.g., the CEO or
manager) down (e.g., entry-level and low-level employees) and each employee has a supervisor. 

Pros    

 Better defines levels of authority and responsibility

 Shows who each person reports to or who to talk to about specific projects
  Motivates employees with clear career paths and chances for promotion     
 Gives each employee a specialty     
 Creates camaraderie between employees within the same department

Cons

 Can slow down innovation or important changes due to increased bureaucracy

 Can cause employees to act in interest of the department instead of the company as a whole
 Can make lower-level employees feel like they have less ownership and can’t express their ideas for the
company
2. Functional org structure

Functional Org Chart

Similar to a hierarchical organizational structure, a functional org structure starts with positions with the highest
levels of responsibility at the top and goes down from there. Primarily, though, employees are organized
according to their specific skills and their corresponding function in the company. Each separate department is
managed independently. 

Pros

 Allows employees to focus on their role

 Encourages specialization
 Help teams and departments feel self-determined
 Is easily scalable in any sized company

Cons

 Can create silos within an organization

 Hampers interdepartmental communication
 Obscures processes and strategies for different markets or products in a company
3. Horizontal or flat org structure

Horiz
ontal or Flat Org Chart

A horizontal or flat organizational structure fits companies with few levels between upper management and
staff-level employees. Many start-up businesses use a horizontal org structure before they grow large enough to
build out different departments, but some organizations maintain this structure since it encourages less
supervision and more involvement from all employees.

Pros    

 Gives employees more responsibility

 Fosters more open communication    
 Improves coordination and speed of implementing new ideas    

Cons

 Can create confusion since employees do not have a clear supervisor to report to
 Can produce employees with more generalized skills and knowledge
 Can be difficult to maintain once the company grows beyond start-up status
 
4. Divisional org structure

In divisional organizational structures, a company’s divisions have control over their own resources, essentially
operating like their own company within the larger organization. Each division can have its own marketing
team, sales team, IT team, etc. This structure works well for large companies as it empowers the various
divisions to make decisions without everyone having to report to just a few executives. 

Depending on your organization’s focus, there’s a few variations to consider.

Market-based divisional org structure

Divisions are separated by market, industry, or customer type. A large consumer goods company, like Target or
Walmart, might separate its durable goods (clothing, electronics, furniture, etc.) from its food or logistics
divisions. 
Market-Based Divisional Org Chart

Product-based divisional org structure

Divisions are separated by product line. For example, a tech company might have a division dedicated to its
cloud offerings, while the rest of the divisions focus on the different software offerings––e.g., Adobe and its
creative suite of Illustrator, Photoshop, InDesign, etc.

Product-Based Divisional Org Chart

Geographic divisional org structure

Divisions are separated by region, territories, or districts, offering more effective localization and logistics.
Companies might establish satellite offices across the country country or the globe in order to stay close to their
customers.
 Geog
raphical Divisional Org Chart

Pros

 Helps large companies stay flexible 

 Allows for a quicker response to industry changes or customer needs
 Promotes independence, autonomy, and a customized approach

Cons

 Can easily lead to duplicate resources

 Can mean muddled or insufficient communication between the headquarters and its divisions
 Can result in a company competing with itself
5. Matrix org structure

Matrix Org Chart

A matrix organizational chart looks like a grid, and it shows cross-functional teams that form for special
projects. For example, an engineer may regularly belong to the engineering department (led by an engineering
director) but work on a temporary project (led by a project manager). The matrix org chart accounts for both of
these roles and reporting relationships.
 

Pros

 Allows supervisors to easily choose individuals by the needs of a project

 Gives a more dynamic view of the organization
 Encourages employees to use their skills in various capacities aside from their original roles

Cons

 Presents a conflict between department managers and project managers

 Can change more frequently than other organizational chart types
6. Team-based org structure

Team-Based Org Chart

It’ll come as no surprise that a team-based organizational structure groups employees according to (what else?)
teams––think scrum or tiger teams. A team organizational structure is meant to disrupt the traditional hierarchy,
focusing more on problem solving, cooperation, and giving employees more control.

Pros

 Increases productivity, performance, and transparency by breaking down silos

 Promotes a growth mindset
 Changes the traditional career models by getting people to move laterally
  Values experience rather than seniority
 Requires minimal management
 Fits well with agile companies with scrum or tiger teams

Cons

 Goes against many companies’ natural inclination of a purely hierarchical structure

 Might make promotional paths less clear for employees
7. Network org structure

Network Org Structure

These days, few businesses have all their services under one roof, and juggling the multitudes of vendors,
subcontractors, freelancers, offsite locations, and satellite offices can get confusing. A network organizational
structure makes sense of the spread of resources. It can also describe an internal structure that focuses more on
open communication and relationships rather than hierarchy.

Pros

 Visualizes the complex web of onsite and offsite relationships in companies

 Allows companies to be more flexible and agile
 Give more power to all employees to collaborate, take initiative, and make decisions
 Helps employees and stakeholders understand workflows and processes

Cons

 Can quickly become overly complex when dealing with lots of offsite processes
 Can make it more difficult for employees to know who has final say

a) Why did UFIDA change its functional organization?

Answer,

a functional org structure starts with positions with the highest levels of responsibility at the top and goes down
from there. Primarily, though, employees are organized according to their specific skills and their corresponding
function in the company. Each separate department is managed independently. 

Cons

 Can create silos within an organization

 Hampers interdepartmental communication
 Obscures processes and strategies for different markets or products in a company

UFIDA’s scale and industry chain had grown to such a level that the function-based organizational
structure could no longer accommodate the further growth. In particular, as the company was gradually
transforming its core business from financial management software to management software, it needed a
more flexible organizational structure that was adaptive to the large size with multiple offerings

b) Why did it change its divisional structure?

In divisional organizational structures, a company’s divisions have control over their own resources, essentially
operating like their own company within the larger organization. Each division can have its own marketing
team, sales team, IT team, etc. This structure works well for large companies as it empowers the various
divisions to make decisions without everyone having to report to just a few executives. 

Depending on your organization’s focus, there’s a few variations to consider.

Market-based divisional org structure

Divisions are separated by market, industry, or customer type. A large consumer goods company, like Target or
Walmart, might separate its durable goods (clothing, electronics, furniture, etc.) from its food or logistics
divisions. 
 Market-Based Divisional Org Chart Example (Click on image to
modify online)

Product-based divisional org structure

Divisions are separated by product line. For example, a tech company might have a division dedicated to its
cloud offerings, while the rest of the divisions focus on the different software offerings––e.g., Adobe and its
creative suite of Illustrator, Photoshop, InDesign, etc.

Product-Based Divisional Org Chart Example (Click on image to modify

online)

Geographic divisional org structure

Divisions are separated by region, territories, or districts, offering more effective localization and logistics.
Companies might establish satellite offices across the country country or the globe in order to stay close to their
customers.

Wang proposed a structure based on customers, hence the G (high end), M (medium) and S (low-end)
business divisions. Transformation of product divisions into product branches
 lead to duplicate resources
 insufficient communication between the headquarters and its divisions
 result in a company competing with itself

c) Do you think whose were appropriate decisions?

Yes, as duplication of resources was eliminated, communication was increase and internal competition
 was removed.

A matrix management structure adopted for its product divisions, sales and service platform and R&D
center allowed increased coordination amongst business development, resource allocation and personnel
assessment. The sales and service divisions implemented sub-product teams with respective
performance targets.

Product management and marketing organizations and processes were also re-structured. The planning
and marketing functions of the current product management department are integrated into different
product business divisions. The application analysis and design functions are incorporated into the
product development divisions.

The functions of key accounts and industry departments are then transferred to the product divisions.
The businesses of electricity, tobacco, metallurgy, real estate (NC clients) also assigned to NC business
division. The strategy and marketing department is renamed branding department for enhanced brand
building. The education and publishing functions are transferred to the education and training
department. The market and partner department takes charge of cooperation with partners (including the
company’s strategic partners) on marketing. The product management and business development
department is responsible for establishing and boosting strategic partnership with the company’s
strategic partners.

d) What concerns you about the current structure?

Disadvantage of the matrix structure is the increased complexity in the chain of command when
employees are assigned to both functional and project managers. This increase in complexity can result
in a higher manager-to-worker ratio, which can in turn increase costs or lead to conflicting employee
loyalties. It can also create a gridlock in decision making if a manager on one end of the matrix
disagrees with another manager. Blurred authority in a matrix structure can result in reduced agility in
decision making and conflict resolution.