E II

Radhika Agarwal

MBA07105 C 29/01/2022

Designing Work Organizations

Professor Santosh Rangnekar

Declaration:
1. I have submitted faculty feedback 30 minutes prior to appearing in the End-Term Exam.
2. I have not copied the answer/matter in this answer booklet from my classmate, internet
and any other sources.

Signature of the Student

Q1. What are the primary differences between an organization designed for efficient
performance and one designed for learning and change? Which type of organization do
you think would be easier to manage?
Both types of organizations have distinct cultures. Specialized tasks, a hierarchy of authority,
rules and regulations, formal reporting systems, few teams or task forces, and centralised
decision making are all associated with an emphasis on efficiency and control.
Shared tasks, a relaxed hierarchy, few rules, face-to-face communication, many teams and task
forces, and decentralised decision making are all associated with an emphasis on learning and
adaptation.
Let's look at the key differences between the two types of organizations:
Organization designed for efficient performance:
Goal: To achieve efficiency, primarily corporate goals, through planning, execution, and
productivity. The majority of the work is strategy-oriented, incorporating common business ideas
and processes.
 Tasks are specialized for everyone
 The hierarchy is strict and there are many rules
 Communication is in mode of reporting system and is vertical
 Few teams, task forces, or integrators
 Centralized form of decision making
Organization designed for learning and change:
Goal: Improving employees' and the organization's intellectual abilities through research and
learning. It motivates employees to become competitive and transform the environment through
insightful findings.
 Tasks and empowerment shared between employees
 Relaxed hierarchy and the rules are very few
 There is face-to-face horizontal communication
 Many teams and task forces to accomplish goals
 Decentralized form of decision making
In terms of adapting to changes, I believe that organizations designed for efficient performance
will have an advantage over organizations designed for learning. The reason is simple: in
efficient organizations, one cannot sit back; they are always on edge, and life is fast-paced,
giving them the leverage to manage changes better. Learning organizations may or may not want
to implement changes in a fully integrated manner because their working methods differ,
learning new things, and building a large capacity can take time.
Q2. Discuss the similarities and differences in the strategies described in Porter’s
competitive strategies and Miles and Snow’s typology.
Both Porter's competitive strategies and Miles and Snow's typologies are based on the concept of
strategic equifinality, or a firm's ability to succeed through a variety of managerial strategies.
Porter's strategy is more general, whereas Miles and Snow's is more specific.
Porter's competitive strategy consists of two strategies: differentiation strategy and low-cost
leadership strategy. When managers employ a low-cost leadership strategy, they choose to
compete on the basis of lower costs, whereas with a differentiation strategy, the organisation
competes on the basis of its ability to offer unique or distinctive products and services that can
command a premium price.
When employing Porter's strategies, a company must first decide whether to target its products to
the mass market or a market niche or focus. Second, a firm will decide whether it wants to cut
costs or differentiate its products, with differentiation implying that firms will most likely forego
cost cuts.
Miles and Snow's typology is based on the notion that managers strive to develop strategies that
are congruent with the external environment. It is based on four types of strategies: prospector,
defender, analyzer, and reactor.
The prospector is known to lead and thrive as a "first mover." They do not like change in their
environment, but they use their creativity to create new products, take risks, seek out new
opportunities for their business, and grow. Based on the specificity, Porter's differentiation
strategy is very similar to it, where a firm attempts to distinguish its products or services from
others in the industry.
Managers may use advertising, distinctive product features, exceptional service, or new
technology to create a product that is perceived as one-of-a-kind. This strategy typically targets
customers who are unconcerned about price, so it can be quite profitable.
The prospector strategy is followed by the defender strategy, which is nearly the inverse of the
prospector strategy. The defender strategy is concerned with stability, if not retrenchment, rather
than taking risks and seeking new opportunities. This strategy aims to retain current customers
while not innovating or expanding. Porter's low-cost leadership strategy is very similar to the
Defender strategy in that both take a centralised approach and adhere to strict cost controls. Both
strategies are implemented with close supervision and very limited employee empowerment.
The low-cost leadership strategy prioritizes stability over taking risks and seeking new
opportunities for innovation and growth.
The analyzer is the third strategy. It tries to keep its business stable while innovating on the
outskirts. It appears to be located somewhere between the prospector and the defender. Some
products will be aimed at stable environments, with an efficiency strategy aimed at retaining
current customers. Others will be aimed at new, more dynamic environments with room for
expansion. The analyzer attempts to strike a balance between efficient production for existing
product or service lines and creative development of new product lines.
The reactor strategy isn't even a strategy. Rather, reactors react haphazardly to environmental
threats and opportunities. Top management has not defined a long-term plan or given the
organisation an explicit mission or goal with a reactor strategy, so the organisation takes
whatever actions appear to meet immediate needs. Although the reactor strategy can be
successful at times, it can also lead to the failure of businesses.
Q3. When is a functional structure preferable to a divisional structure? Also, why do
companies using a horizontal structure have cultures that emphasize openness, employee
empowerment, and responsibility? Discuss.
Let us first understand, what exactly is functional and divisional structures are.
The type of structural design in which all activities are grouped together by common functions
from the top of the organization is known as functional structure. For example, all engineers
work in the engineering department, and the same is true for the other departments.
In a functional structure, all human knowledge and skills related to specific activities are
consolidated, providing the organization with a valuable depth of knowledge. One of the
functional structure's strengths is that it encourages economies of scale within functions. When
all employees are located in the same location and can share facilities, economies of scale result.
Producing all products in a single plant, for example, allows the plant to purchase cutting-edge
machinery. Building a single facility rather than separate facilities for each product line reduces
duplication and waste. Employees' in-depth skill development is also encouraged by the
functional structure. Within their own department, employees are exposed to a variety of
functional activities.
The functional structure can be redesigned into separate product groups, with each group
containing the R&D, manufacturing, accounting, and marketing functional departments. Within
each product group, coordination is maximized across functional departments.

Separate divisions can be organised in a divisional structure, also known as a decentralised form,
with responsibility for individual products, services, product groups, major projects or programs,
divisions, businesses, or profit centers. This structure is also referred to as a product structure or
a strategic business unit structure. A divisional structure is distinguished by the fact that
grouping is based on organisational outputs.

A functional structure is better suited to a less complex organisation, i.e., one that is small and
simple, because it is centralised and thus forces decisions all the way to the top before a problem
affecting multiple functions can be resolved, whereas a divisional structure takes a decentralised
approach because the lines of authority converge at a lower level in the hierarchy.
When in-depth expertise is critical to meeting organisational goals, when the organisation must
be controlled and coordinated through the vertical hierarchy, and when efficiency is critical, a
functional structure is preferable.
Speaking of horizontal organisational culture, in a horizontal organisational structure, decision-
making is supported by employees and executives. Only those plans that are successful increase
employee morale. The following are the reasons why employees are valued in this structure:

 Employees from not only the same department, but also from cross-functional
departments, who are open to one another, make it easier to coordinate in an
organization.

 Employees are empowered to decide on daily tasks that must be aligned with
organizational objectives because there is openness among employees not only from the
same department but also from cross-functional departments. It improves overall
efficiency.
 Because the approach is employee-centric, it ensures that employees are satisfied with
their jobs and that they will work to the best of their abilities.

Q4. Case study: Decentralization at Curtice-BURNS, Inc

a. Do you think the decentralization policy of Curtice-Burns, Inc. is valuable for them?
Decentralization can be defined as the systematic exercise of power in an organisation at
all levels. It depicts how different levels of the hierarchical progressive system assign the
ability to make choices. At the end of the day, it refers to the spread of capabilities,
capacities, and responsibilities outside of the focal area.
To function properly in a large company like Curtice-Burns, Inc, which has acquired
many other food companies, each department must function independently and be given
complete control. Giving them authority will also help to reduce interference from the
central team over time. Regular interference reduces departmental accuracy because the
center team may not be as familiar with the ground reality. As a result, I believe
decentralization should be preferred. However, decentralization is not always the best
option, and some additional steps should be taken. This is to establish a clear line of
demarcation between roles and responsibilities in writing in order to avoid conflicts.

b. What specific companies’ strategies facilitate the use of decentralized authority?

Depending on their market base and target customers, different divisions have different
strategies. The best part of decentralization in this case is having a separate CEO for each
department. That is, each department must be accountable enough to provide a progress
report. The second component is the incentive plan, which fosters healthy competition
within the department. This will also create an environment in which other departments
will be willing to assist other departments because the failure of any will have an impact
on all.
c. What are the functions which are most likely to be centralized in Curtice-Burns,
Inc.?
Curtice-Burn, Inc. requires the function of creating an accounting department for any
significant investment. There is a need to centralize the money department in the same
way that we have centralised government. It will assist the company in investing in
research and development projects, which will be beneficial in the future.

Q5. Case study: Hewlett Packard (HP)

A. What are the different types of Strategic Changes that Mark Hurd Carried out at
HP?
Mark Hurd implemented several strategy changes in the company's operations, including:
 He divided the employees into product groups (HP's PC, printing, and corporate
technology) so that salespeople could concentrate on their product.
 He assigned only one salesperson to know who to contact for the top corporate
clients.
 He changed the organization's structure and reward systems, as well as
implemented strategy and structural changes.
 Between him and a customer, he discovered eleven layers of hierarchy. As a
result, when he restructured the company, he eliminated three layers of sales
management and fired hundreds of underperformers.
 He successfully implemented a customer-focused organisational structure,
resulting in a significant increase in HP's market share.

B. What could be the possible long-term implications of the changes that were made at
HP?
After implementing numerous organisational changes and reorganizing the organization's
hierarchy, there may be a temporary increase in the organization's revenue stream.
However, because fewer employees and a high number of layoffs by Mark Hurd can
undermine employees' sense of belonging, they may interpret this as a warning and
consider shifting to a new organisation with better job security. They will lose trust in
upper management, which may demotivate employees to demonstrate innovation in their
day-to-day work. Even with fewer employees, a lack of innovation will cause customer
dissatisfaction and have a negative impact on the organization's revenue stream.

C. What possible alternatives could be adopted to resolve the issues at HP?

The following case study demonstrates how an appropriate organisational structure can
influence a company's success.
We see that the company requires a more effective management system.
 Create Skunkworks- a separate, small, informal, highly autonomous, and often
secretive group that focuses on business breakthrough ideas Creating this group
can assist the company and departments in focusing on their respective domains.
  Horizontal coordination: Increased horizontal coordination, such as Boundary
Spanning, can help reduce departmental confusion. Personnel, like marketing, is
inextricably linked to customer needs. They listen to what customers have to say
and analyze competitor products as well as distributor suggestions.
 Switching structures - Changing organisational structures aids in the generation of
new ideas. Rather than firing the employees, the company could have formed
teams and asked for a better solution, thus incentivizing the team that came up
with the best solution. This could be repeated every six months or once a year.
Many other structural changes can be implemented to increase transparency in the
management layer, and as a result, a dual-core approach should be the primary focus in
any organisation.