Organization Theory and Design

On
Daraz Bangladesh

Submitted to:
Ummaha Tul Hazra
Professor
Department of Management
School of Business and Economics
North South University, Dhaka
Submitted by:
Semester: Summer 2022
Course: MGT330
Section: 01
Name ID
Zahedin Ahsan Kowshik 1731256030
Rubaiya tuz Zohra Biva 2011085030

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Acknowledgement

In preparing this report, we made the greatest efforts. However, it would not have been
possible without the generous assistance of many people. We want to express our gratitude
to each and every one of them. We would first want to express our gratitude to Almighty
Allah for providing us with all we needed to finish this report.
Second, a particular thank you to Ummaha Tul Hazra, our esteemed instructor, for letting us
collaborate on such a lovely and instructive project. We are very appreciative to him for his
leadership, tenacious oversight, and provision of the necessary information. Her assistance
is definitely valued.

Last but not least, we want to express our gratitude to all of the group members who put in a
lot of effort over the last several months. This job is achievable thanks to their zeal. We all
came together as a result of the entire programme to recognise and cherish the actual worth
of friendship.

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 Letter of Transmittal

26, December 2022

Ummaha Tul Hazra

Professor

Department of Management

North South University

Subject: Submission of Final Group Project Report

Dear Madam,

We are submitting our final group project entitled “Organizational Theory and Design of
Pathao” as per your instruction to fulfill the production management course requirement.
The main purpose of this project is to depict the real-life application of the organizational
designs of an organization. We have matched the applied designs with the organizational
theories which we have studied in class. We can assure you of the authenticity of this
project. We sincerely hope that this report will merit your approval.

We are really grateful to you for giving us the opportunity to study on this matter. Hence,
we have prepared this report with the utmost research.

Thank you.

Zahedin Ahsan Kowshik

Rubaiya tuz Zohra Biva

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INTRODUCTION
An online business transaction is referred to as an e-commerce platform business. Consumers
may easily swap products or services electronically via e-commerce. E-commerce is now being
used by many businesses to offer both tangible and immaterial commodities. Any business
transaction that takes place using electronic media is referred to as e-commerce. Six categories of
e-commerce exist: Consumer to Consumer (C2C), Business to Business (B2B), Business to
Consumer (B2C), and Business to Consumer (C2B) Administration to Business (A2B) and
Administration to Consumer (C2A) In 1950, businesses began keeping track of their internal
company activities using computers. In 1960, businesses that needed to keep a lot of transaction
records utilized punched cards to conduct transactions. (Mohiuddin, 2014). Through electronic
commerce, the company market is now segmented into several configurations. Through
eCommerce, the global company is quickly moving toward Business-to-Business (B2B). Most
firms are progressively selling their items and promoting their goods or services online.
Overview of the Daraz Corporation Bangladesh is a growing country with enormous potential.
Its economy is steadily growing, and it is an excellent place to invest due to the availability of
inexpensive labor, easy and productive communication, and exposure to the outside world via
port facilities, airline routes, rail, and street. However, the world is progressing, and Bangladesh
is following suit. Because of the huge advancement of the internet in recent years,
communication has become lightning-quick, and business has gotten more efficient as a result.
With the aid of globalization and ubiquitous internet access, it has now reached a mature stage
and penetrated our nation as well. One of those businesses is Daraz Bangladesh, an online
retailer that offers the largest selection of electronics, clothing, home appliances, children's
products, and more in Bangladesh. Customers can order items from Daraz and have them
delivered right to their homes or place of business whenever it is most convenient for them.
Daraz accepts a variety of payment options, including cash on delivery and free returns. Daraz
provides its consumers with a wonderful shopping experience, with purchases delivered straight
to their door at reasonable prices for high-quality items. They are continually growing their
product line to cover the newest electronics, fashion trends, and new areas. Bangladesh has a
large population, which attracts many advertisers to sell their wares. However, due to a lack of
innovation, Bangladeshis continue to require a wide range of contemporary amenities. Many
Bangladeshis have no knowledge of how to use the internet, which is posing a problem for

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online marketers. The Bangladeshi government is working to make the internet available to
everyone in the country, which would support the growth of Bangladesh's e-commerce sector. E-
commerce has been thriving since the beginning and is now progressively growing. Late
September 2013 saw the opening of Daraz, which is quickly becoming Bangladesh's primary
online shopping destination. People in Bangladesh simply knew about Amazon's business model,
where buyers and sellers connect and exchange goods. Daraz explained the Amazon business
plan to Bangladeshis. Rocket Internet GmbH has a number of businesses in Bangladesh,
including Daraz. They try to replicate the successful online initiatives of other inventive firms'
processes in emerging areas. In-depth B2C offerings are being made by Daraz Bangladesh
Limited,.

Vision
"To be the number one marketplace by giving top-quality services to all of our merchants and
consumers," reads DARAZ Bangladesh's mission statement.”.

Mission
The goal of DARAZ is to expand across Bangladesh, take the largest market share in the e-
commerce industry, provide clients with all essentials, and track out the top vendors around the
nation to feature their wares on the DARAZ website.

Daraz Group Organogram

Since the start of the adventure in 2015, Daraz Bangladesh has expanded significantly. The
business has spent a lot during the past two years. 19 hubs have recently been created outside of
Dhaka city, and there are now more offices inside the city as well. Daraz has also received a large
number of vendors since they arrived in Bangladesh. The organogram is getting more
complicated as the procedures expand. Daraz and Kaymu amalgamated in the month of July
2016 to improve their position in the expanding Bangladeshi market. These two businesses are
collaborating in an effort to increase their market share.They are now known as Daraz Group.
Additionally, some merger took place in Myanmar and Pakistan. The co-CEO of the Daraz
Group, Bjarke Mikkelsen, stated that "Daraz and Kaymu have both established profitable

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enterprises in their respective areas. The merger is now the next stage in providing our sellers
with the finest opportunities to expand their online businesses and to begin utilising the platform
synergies. The diagram below shows a straightforward hierarchical description:

Major department of Daraz Bangladesh

Every organization needs some sort of hierarchical structure to function successfully, depending
on its size. It becomes very difficult for the business to implement operational strategies and
meet its goal without the appropriate organizational structure. Daraz is an international company,
and in order to operate smoothly, they have a dedicated section filled with the right kind of
people. The following list includes Daraz Bangladesh's actual bureaus:

● Finance
● IT
● Public relations,
● graphic design,
● operations management in marketing
● Problem & Solution
● Category Control
● Account Management & Sales
● Content management and Onsite

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 ● Personnel & Communication Commercial Development (GM & Fashion)

EXTERNAL ANALYSIS
Horizontal Center-Led Organisation
The corporate operations of Daraz are governed by its organizational structure. Currently, these
operations, which also include e-commerce business, are mostly in the retail sector. The
corporate structure of the corporation places restrictions on how it may solve its challenges. The
company's strategic measures to increase its retail market share are made easier by structural
qualities. The organizational culture at Daraz, therefore, affects how employees react to
difficulties at work. The corporate culture-supported attitude has an impact on how resilient the
company's human resources are. A retailer's ability to adapt to changes and new problems in the
global market is aided by cultural factors. Daraz Inc. has a lengthy history.Daraz Inc.'s long
history of worldwide success and growth demonstrates that the firm's organizational structure
and organizational culture are beneficial in providing competitive advantages and success.
Daraz's organizational structure interacts with its organizational culture to preserve its strong
competitive edge over other firms such as Chaldal and Ajkerdeal, as well as meenaclick,
shawpno, and other technology companies with big online digital content distribution operations.
The favorable and synergistic mix of the company's organizational structure and organizational
culture is connected to such a retail market position and possible long-term economic
success.How the corporate structure supports human resource development and other parts of
Daraz's retail business operations, such as marketing, strategic formulation, and organizational
design, has an impact on the features and consequences of the corporate cultureTop-level
management occasionally sends instructions to regional managers, district managers, middle
managers, store managers, and store team members. Executives may quickly influence the
organisation in this way and keep track of how decisions are having an impact. Additionally, the
corporation can manage its more than 10,000 employees well because to the hierarchical
structure.

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The board of directors for Daraz is made up of 12 people. Executives serving in positions like
chief financial officer, chief technology officer, chief legal officer, and corporate secretary make
up the Executive Committee, which reports to the Board of Directors. Senior Leadership, the
level below, is made up of 39 executives who work in a variety of jobs in technology,
merchandising, compliance, ethics, health & wellness, and international strategy, to mention a
few.

Functional Based Organization

Daraz's organizational structure is hierarchical and functional. This structure has two distinct
characteristics: hierarchy and function-based specification. The vertical lines of command and
authority across the organizational structure are referred to as the hierarchy feature. Every
employee, with the exception of the CEO, has a direct superior. Directives and directives from
the top levels of the company's management are executed in Daraz shops by intermediate
managers down to the rank-and-file personnel. The function-based defining component of the
company's corporate structure, on the other hand, incorporates groups of personnel doing certain

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activities. Daraz, for example, has a department dedicated to human resource management. In
addition, the corporation includes a department for information technology and another for
marketing. These are only a few of the various departments under Daraz's organizational
structure that are based on functions.

The capacity of corporate managers to quickly affect the whole business is the major result of
Daraz's hierarchical functional organizational structure. For instance, shop managers are
immediately informed of new policies and initiatives made at the corporate level of the business.
Through Daraz's hierarchical functional organisational structure, effective monitoring and
control are made possible. The lack of support for organizational flexibility is a drawback of this
business structure. The long communication and approval procedure involving the middle
managers and corporate managers at Daraz's headquarters prevents the lower levels of the
organizational structure from readily changing business practises.

Daraz's organizational structure is a hybrid hierarchical-functional structure, sometimes

known as a matrix structure that integrates many methodologies. On the one hand, Daraz
has a hierarchical structure, with the present CEO being the sole employee without a direct
superior and top-level management issuing orders. The function-based structure of Daraz's
business model, on the other hand, is utilized to categorise personnel based on their specific
talents and expertise. Daraz's organisational structure is defined by a hierarchy and function-
based groupings. Daraz employs a matrix organisational structure since the firm integrates
two separate organisational systems.

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This enables Daraz to maintain its extensive retail presence in the Bangladesh and throughout
Bangladesh, where it has roughly 1050 outlets under 100 brands. Indeed, many similar global
corporations employ this strategy to cope with many divisions and functional hierarchies at the
same time. Daraz has a hierarchical structure, therefore the present CEO is the sole employee
without a direct superior.

Business Redesigning of Daraz

In Daraz, there is a growing desire to use technological innovation to save costs and boost
operational efficiencies. This frequently results in an increase in the demand for IT services, and
the success or failure of the Daraz might depend on its capacity to provide these services on
schedule, on budget, and according to specifications.
Creating in-house IT capabilities to carry out tasks or offer services may be an expensive and
dangerous endeavor, especially when an organization's IT requirements are continuously
changing. In fact, very few businesses in today's Daraz have constant IT requirements.
Companies typically go to Managed Services or Staff Augmentation when seeking outside
assistance to meet their IT Daraz demands.

External IT workers will join existing teams in organizations that desire to expand their IT

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capacity. Augmentation enables businesses to swiftly ramp up and down to meet shifting demand
without incurring the costs and risks of extra full-time personnel.
Managed Services is a framework that is similar to traditional project-centric outsourcing and
may include a variety of "whole of life" services. The introduction of Managed Services into a
company helps it to free up specialized knowledge within the company and focus on core Daraz
activities. This method provides organizations with the benefits of external knowledge, cost
control, and risk avoidance, allowing them to focus their current resources on core activities.

Staff Augmentation

The staff augmentation concept enables organizations to add employees to their current teams
based on the additional capabilities needed to support their projects. This paradigm enables quick
access to lacking competencies and skills.
Staff augmentation often takes little contractual effort, has a straightforward pricing model (i.e.
rate times hours done), can be scaled up or down fast, and has no influence on an organization's
existing IT operating model.
Outsourced personnel can supplement current in-house staff in this way. It typically leaves
management and technical leadership with the customer, while regular operations (such as
development and testing) are supplemented by service acquisition from a provider.

The range of responsibility with the Staff Augmentation approach is often relatively constrained.
In addition to development and testing, it could also involve duties like prototyping or technical
implementation, but because the client is in charge, the augmentation team members' scope for
product vision and decision-making is constrained.Cost reduction is the usual client Daraz driver
for such a business.The approach enables immediate access to lacking competencies and
abilities, prevents direct recruiting and firing expenses, and is equipped to handle employee
shortages brought on by unforeseen circumstances. Costs might change to meet demand. In
contrast, there is a significant level of customer participation in managing the additional
resources, and long-term expenses might be greater than Managed Services.

Managed Services Model

A specification having a set scope, budget, and time frame. The provider accepts risk and takes

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charge of project execution. The provider maintains the delivery strategy, including governance,
procedures, and tools, with result-based pricing.
The Managed Services Model is based on meticulous preparation. In an operational setting, the
customer must establish the requirements for practical results, appropriate service levels, and key
performance indicators. Pricing is closely tied to this set of outcomes, and a main focus will be
on delivering the advantages and outcomes that the customer desires.
Because the supplier bears the delivery risk, it is highly driven to use productivity management
methods to ensure that results and service obligations are met. This is seen in the execution of
project governance, methodology, and so on.

As the supplier takes on the delivery risk, it has a strong incentive to implement productivity
control methods to guarantee that results and service obligations are met. This is shown in the
way that project governance, methodology, tools, and procedures are implemented.
This approach enables a company to contract out management, operations, and process delivery
in order to reduce overall Daraz costs. Because the pricing structure is based on recurring
monthly paying with assured service levels, quality, and throughput, it might occasionally be
appealing to businesses. This significantly lowers cost volatility and allows precise and
predictable budgeting.

A complicated information technology environment is a lot like developing a city in terms of

creation and maintenance. There are supporting buildings, zoning regulations, traffic
management, and infrastructure. Buildings are analogous to software applications, support
services to technology platforms, buildings to physical hardware, and traffic control to data
integration flows. Without a plan, no one would attempt to create a structure, much less an entire
city; the outcome of such accidental, spontaneous designs would be a disaster. An intentional city
design may be compared to a blueprint with several layers, from grand municipal designs all the
way down to specific structure blueprints. Similar to this, an enterprise architecture blueprint
may be conceived of as having architectural strategies. TAn architectural blueprint's objective is
to optimise the value of IT services for the organisation by bringing together strategies,
roadmaps, patterns, technology stacks, and standards that are in line with business goals and
outcomes. The overall architecture for the interconnected domains of business, data, security, and
infrastructure, as well as for line-of-business applications and platforms, is defined by an

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effective architectural blueprint. A blueprint's objectives are to support technology portfolio
planning, educate technology investment choices, and direct the development of solution design.
Sections on strategies, roadmaps, reference architectures, patterns, standards, and technology
stacks should be included in the blueprint. A blueprint need to be a dynamic document connected
to actual architectural models that are regularly updated in response to changing business
requirements and technological advancements.. Solution architects, technology executives, and
business partners should all utilise blueprints as a reference. Once built, enterprise architecture
must examine and update it on a regular basis.
A blueprint is an architectural tool used to generate architecture strategies, roadmaps for
implementing those goals, patterns to assist implementation, and technological standards to
enhance consistency, resiliency, security, and efficiency. These features will aid portfolio
planning, enable IT service optimization, inform technology investments, and help enterprises in
the deployment of technology solutions that will efficiently and effectively solve business
challenges.An architectural blueprint's targeted results are to standardise common technologies,
define technological strategies, and decrease technical complexity while enabling technology
optimization and innovation. The following are key blueprint objectives:

● defining important architectural tactics that support digital transition

● Norming of widely used, non-differentiating technology
● Giving architects and engineers clear instructions and useful advice
● architectural complexity and technological debt reduction
● standardizing technology to assist with the development of engineering skills
● Standardization and strategic alignment enable IT to more effectively fulfil business
goals.
● fostering innovation, scalability, resilience, and engineering agility
● enhancing IT effectiveness and accelerating the launch of new capabilities
● Standards, tactics, and principles for architecture communication
● Advice on plans, roadmaps, and patterns for IT leaders, architects, and engineers

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CONCLUSION

DARAZ Bangladesh Ltd. still has a tremendous opportunity in the market to expand and gain
the largest market share. To attain its current position, the organization has experienced several
obstacles and hardships since its inception. It grew from a modest unit to a massive corporation
today. Companies in the e-commerce market should focus on providing high-quality products
and services in order to propel the industry forward. The Bangladesh government should also
be significant and cooperative in order to assist firms in flourishing. Because DARAZ
Bangladesh Ltd is a decentralized company with basic principles that are shared by all
employees, working in a dynamic environment is easier than it appears. Every department
works hard, and DARAZ Bangladesh will be successful due to an efficient staff and modern
technology infrastructure.

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References
● Indeed Editorial Team. (2021, April 13). Comparing Horizontal vs. Vertical
Organizational Structures. Indeed. Retrieved December 26, 2022, from
https://www.indeed.com/career-advice/career-development/horizontal-vs-vertical-
organizational-structure
● "E-commerce in Bangladesh". archive.dhakatribune.com. Dhaka Tribune. Archived
from the original on 2017-02-04. Retrieved 2017-02-03.
● S. Noda III, Tomas (28 June 2016). "Rocket Internet merges Asia e-commerce startups
Daraz, Kaymu - DealStreetAsia". DealStreetAsia..
● . Abudheen, Sainul. "Rocket's Daraz a hit not just in Pakistan, but in
Bangladesh and Myanmar too". e27.
● Asia, Digital News (27 January 2015). "Rocket Internet's APACIG launches e
commerce site in Myanmar, Bangladesh". Digital News Asia.
● Russell, Jon. "Alibaba buys Rocket Internet's Daraz to expand its e-commerce empire
into South Asia". TechCrunch. Retrieved 8 May 2018.
● Editorial, Reuters. "Alibaba buys Rocket Internet's Pakistan ecommerce
platform Daraz". Reuters. .
● "Daraz announces its mission to 'make it easy to do business anywhere
in era of digital economy'". The Frontier Post. 2019-03-30.
● 8. "How online shopping is changing Bangladesh".
theindependentbd.com. The Independent Bangladesh.

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