NMIMS Global Access

School For Continuing Education

Course: Organizational Theory, Structure and Design
Internal Assignment, December 2023

Q1. Henri Fayol, known as the "father of the classical approach," is regarded as one of the
founders of conventional management and is credited with developing management theory.
The framework is built on four core ideas from Fayol's ancient philosophy that are still
applicable to modern enterprises:

Division of Labour
Henri Fayol's management philosophy is heavily influenced by the Division of Labour theory,
which holds that work is separated into specialised tasks depending on credentials and ability.
1. Increased Effectiveness
 Relevance Today: By assigning work to teams with the required skills, the
division of labour in contemporary organisations increases productivity.
 Example: For instance, in the software development industry, programmers
concentrate on code, testers on quality assurance, and UX designers on user
experience.
 2. Development of Expertise
 Relevance Today: As shown in the healthcare industry, the division of work
facilitates knowledge development through specialisation.
 Example: Doctors concentrate on diagnosis and treatment, whereas nurses have
a speciality in patient care. Professionals can give patients the treatment they
need because to this specialisation.

3. Resource Distribution
 Relevance Today: In organisations, the division of labour enables effective
resource allocation, maximising the use of resources like machinery, labour, and
tools.
 Example: The bodywork and engine assembly teams, for instance, guarantee
car production components.
The division of labour idea developed by Henri Fayol is still applicable in contemporary
organisations since it fosters productivity, knowledge expansion, resource utilisation, error
reduction, and scalability, allowing for flexibility to the complexity of the business
environment.
Scalar Chain (Hierarchy)
The Scalar line or Hierarchy, Henri Fayol's conventional management theory, places emphasis
on the significance of a well-defined line of command in organisations:
1. Clearly Defined Reporting Format
 Relevance Today: The Scalar Chain concept outlines an organization's
reporting structure, ensuring clarity for employees.
 Example: For instance, in a retail organization, shop associates report to
department managers, who then to store managers.

2. Effective Decision Making

 Relevance for Effective Decision-Making Today: A clearly defined hierarchy
is essential for effective decision-making since it allows for seamless changes
in organisational levels and ensures that important choices are carried out in a
methodical manner.
 Example: In technology organisations, team leaders assess the technical
decisions made by software engineers and send them to upper management for
additional assessment. This improves the effectiveness of decision-making,
particularly for complex projects.

3. Responsibility
 Relevance Today: By designating a designated supervisor or manager to each
employee or department, who is responsible for their performance and choices,
the Scalar Chain idea provides organisational accountability.
 Example: The head nurse or nursing supervisor at a medical facility is
responsible for holding nurses accountable for quick problem-solving,
improving patient safety, and providing high-quality care.
Even though contemporary management practises incorporate parts from various theories,
Henri Fayol's Scalar Chain Principle promotes responsibility, decision-making, transparency,
communication, and risk management in current organisations.
Unity of Command
The unity of command emphasised in Henri Fayol's conventional management style, which
mandates that subordinates only give commands to one another, is still applicable in
contemporary organisations.
1. Clarity and Lessened Confusion
 Current Relevance: When there is just one supervisor, the unity of command
concept guarantees clarity in reporting relationships, minimising
misunderstandings, and ambiguity in employees' responsibilities.
 Example: To guarantee successful communication and collaboration, the
marketing manager of a marketing department reports to marketing specialists
for advice. This reduces ambiguous or conflicting orders.

2. Making Decisions Effectively

 Relevance Today: The appointment of a single supervisor simplifies decision-
making procedures and enables workers to approach immediate management
for quick replies and increased productivity.
 Example: By swiftly addressing technical issues and averting delays, a team
leader supports technicians within an IT support team.

3. Responsibility and Accountability

 Current Relevance: The unity of command idea creates clear lines of
responsibility, forcing workers to report their progress on their responsibilities
to their manager.
 Example: In a retail context, the shop manager is responsible for supervising
the sales crew. This gives them the opportunity to evaluate each associate's
performance and offer any required criticism or coaching.
The Unity of Command idea developed by Henri Fayol is still applicable in contemporary
organisations since it fosters accuracy, efficiency, accountability, coherence, and less conflict
at work. It promotes transparent decision-making and communication, which enhances
coordination and operational effectiveness.
Esprit de Corps (Team Spirit)
The Esprit de Corps, a foundational idea in Henri Fayol's management philosophy, encourages
a collaborative work atmosphere and employee collaboration. This idea is still applicable in
modern organisations for a variety of reasons.
1. Increased Employee Morale
 Current Relevance: By encouraging a sense of unity and camaraderie among
team members, the Esprit de Corps philosophy raises employee morale and
results in greater motivation and engagement.
  Example: A software development team's morale may be greatly improved by
a friendly and cooperative work environment, which fosters greater job
satisfaction and dedication to shared objectives.
2. Team Performance Improvement
 Relevance Today: A supportive work environment fosters teamwork and the
attainment of common goals, which considerably enhances team performance.
 Example: Effective teamwork among medical staff members in hospitals can
improve patient care; however, for this to happen, there must be collaboration
and open communication.

3. Conflict Resolution's
 Current Relevance: According to the Esprit de Corps principle, a supportive
work environment encourages successful conflict resolution since team
members are more inclined to approach and resolve problems constructively in
such an environment.
 Example: Within a marketing department, disagreements about the tactics of
marketing campaigns might occur, but a cohesive team is more likely to conduct
fruitful talks and come up with innovative solutions.
The Esprit de Corps idea from Henri Fayol is still applicable in contemporary businesses since
it fosters employee retention, teamwork, and customer satisfaction. Creating a positive and
productive work environment improves financial success and employee engagement,
ultimately improving organisational performance.
The conventional management principles of Henri Fayol are still applicable today, although
contemporary organisations have changed and frequently include new ideas. These guidelines
aid in preserving consistency and clarity in a challenging professional setting. Today,
organisations place a high priority on employee engagement, empowerment, and adaptability,
which Fayol's work did not fully examine. As a result, organisations today could choose a more
flexible approach, relying on a variety of management theories to handle the intricate
requirements of the contemporary business environment.
Q2. The phases that organisations go through throughout growth are outlined in Greiner's
Organisational Growth Model, which was established in the 1970s. It also pinpoints crucial
moments for crises or obstacles. The model offers instances related to the introduction of
LookBook's mobile application and internal management problems.

PHASE OF CREATIVITY
DIRECTION PHASE
PHASE OF DELEGATION
COORDINATION PHASE
THE COLLABORATIVE STAGE
THE ALLIANCE STAGE
PHASE OF INTERNAL TURMOIL
1. PHASE OF CREATIVITY
 The Creativity Phase is the early stage of an organization's development and is
frequently started by creative people. This stage is brief, adaptable, and centred on
creating a brand-new good or service. Making decisions is done informally, with a
focus on innovation and entrepreneurship.
 The mobile app for LookBook, for instance, is a result of the Creativity Phase,
when the creators develop and fine-tune the app's concept and make informal
decisions based on their vision.
 During the creative stage of LookBook's development, the company's founders
developed and improved the idea for the app. A small group of visionaries make
up the organisation, and decisions are made informally in accordance with their
vision. For the success of the app, the founders make the most important decisions.
 Lookbook will experience difficulties that need for a systematic management
strategy, which might eventually lead to the subsequent phases of Greiner's model,
each of which has its own crises and growth prospects.

2. DIRECTION PHASE
 The following phase of organisational development, the Direction Phase, sees a
change from an entrepreneurial and casual approach to more formal structures,
roles, and procedures. Decision-making evolves from being led by founders to
being driven by management, frequently focused on efficiency and better
coordination.
 As it progresses through the first creative stage, LookBook's new mobile
application is anticipated to move into the Direction Phase. The company's
founders could be aware of the necessity for expert management and a methodical
strategy to oversee product development, marketing, and customer support.
 To effectively go on to the subsequent stages of Greiner's model, ensure efficient
growth, handle internal management issues, and ultimately achieve a stable and
well-defined organisational structure, LookBook must successfully strike a balance
between creativity and structured management in the Direction Phase.

3. PHASE OF DELEGATION
 Organisations expand during the delegation phase, necessitating the transfer of
power and responsibility. As businesses grow, specialised divisions are created,
each with its own set of duties, necessitating the need for leaders to have faith in
their employees.
 The emergence of specialised departments like development, marketing, and
customer support, each with their own leadership and responsibility, may result
from the development and launch of LookBook's mobile application. This phase
necessitates the trust of the company's founders and senior management.
 In order to succeed in Greiner's model and advance through the next stages,
LookBook must address issues in the Delegation Phase to guarantee efficient
departmental coordination, preserve a collaborative culture, and develop efficient
communication channels.

4. COORDINATION PHASE
  Following the Delegation Phase, organisations coordinate multiple departments
and functions, particularly as businesses expand and departments become more
specialised. Inefficiencies, communication problems, and a lack of synergy can
result from insufficient coordination.
 As the firm has developed and formed specialised teams, the launch of LookBook's
new mobile application is in the coordination phase, where specialised departments
including development, marketing, and customer support collaborate to ensure a
flawless execution and successful market launch.
 LookBook must implement efficient communication systems, encourage cross-
functional cooperation, and create effective processes across departments in order
to move the company forward with greater efficiency and effectiveness during the
Coordination Phase.

5. THE COLLABORATIVE STAGE

 The Coordination Phase is followed by the Collaboration Phase, which focuses on
establishing a culture of teamwork and collaboration by dismantling silos,
developing cross-functional cooperation, and fostering seamless departmental
collaboration.
 The creation, launch, and continued maintenance of the new mobile app from
LookBook may enter the collaboration phase, involving cross-departmental
cooperation from teams including development, marketing, customer support, and
outside partners.
 By encouraging a collaborative culture, offering the required training and tools,
and resolving change resistance, LookBook may effectively navigate the
Collaboration Phase. Teams can innovate, react to market changes, and handle
internal management issues in this setting, laying the path for long-term
development and success.

6. THE ALLIANCE STAGE

 During the alliance phase, an organisation looks to form strategic partnerships,
alliances, or mergers with other businesses to continue growing. This stage focuses
on external collaboration, utilising the capabilities of partners to accomplish shared
objectives. For instance, LookBook might look into strategic alliances with larger
mobile app companies or related technology companies to obtain access to a larger
user base and resources.
 LookBook is introducing its brand-new mobile application while exemplifying the
Alliance Phase by considering business alliances. To get a larger user base and
more resources, this can entail forming partnerships with larger mobile app
industry entities or related technological companies.
 To effectively traverse the Alliance Phase, LookBook must choose partners
carefully, secure clear agreements, and actively manage the collaboration. Growth
may be accelerated and internal management problems can be solved with effective
external collaboration.

7. PHASE OF INTERNAL TURMOIL

  The Internal Crisis Phase is a crucial stage in the development of an organisation.
It is difficult to traverse since it is frequently characterised by serious internal
management problems including bureaucracy, opposition to change, or a lack of
adaptation.
 If staff members reject change or have trouble adjusting to market circumstances,
LookBook's new mobile application may enter an internal crisis phase. This can
result in inefficiency and stagnation, which would eventually harm the app's
success and user pleasure.
 LookBook must manage the Internal Crisis Phase by simplifying procedures,
encouraging a culture of creativity and adaptation, and dealing with change
opposition through efficient training and communication. This is essential for
maintaining growth and competition in the market for mobile applications.
LookBook may address internal management issues and maintain its success by
modifying management techniques and putting them into practise.

LookBook must adjust its management tactics to each stage of growth, considering
the difficulties and potential emergencies. Internal management issues may be
resolved by the organisation by putting effective solutions into place and seeing the
need for change.

Q3.
A. Ashish and Avanti's e-commerce startup company's organisational performance must
be measured to determine how well the firm is meeting its objectives and providing
value to its clients. They can evaluate their company's effectiveness using several key
performance indicators (KPIs) and metrics. Here are a few instances:

SALES AND REVENUE GROWTH

CLIENT SATISFACTION
CONVERSION RATES AND WEBSITE TRAFFIC
CUSTOMER RETENTION RATE
INVENTORY MANAGEMENT
ORDER FULFILMENT AND SHIPPING TIMES
COST EFFECTIVENESS
PRODUCTIVITY AND CONTENTMENT OF EMPLOYEES
MARKET SHARE AND COMPETITIVE ANALYSIS
QUALITY CONTROL
SOCIAL RESPONSIBILITY AND SUSTAINABILITY
RETURN ON INVESTMENT (ROI)
 SALES AND REVENUE GROWTH: Tracking sales and revenue growth
over time is one of the simplest ways to evaluate performance. They can monitor
progress and establish precise goals. For example, they may aim for a 20%
growth in monthly sales over the previous year.

 CLIENT SATISFACTION: It is critical to keep track of client satisfaction. To

gauge how successfully their goods and services live up to consumer
expectations, they can utilise tools like Net Promoter Score (NPS) or customer
satisfaction surveys.

 CONVERSION RATES AND WEBSITE TRAFFIC: Analysing website

traffic statistics may help businesses determine how well their user experience
and marketing are working. Metrics like website traffic, bounce rates, and
conversion rates may be tracked by them. They may set a goal to boost
conversion rates by 5% over the course of the upcoming quarter, for example.

 CUSTOMER RETENTION RATE: A key indicator of an organization's

performance is customer retention. An important KPI may be to try to keep 80%
of your clients over a given period.

 INVENTORY MANAGEMENT: Effective inventory management is

essential for an e-commerce company. They are able to access how well they
are increasing inventory turnover and lowering carrying costs. For instance,
they may set a goal to cut carrying expenses by 10% in a year.

 ORDER FULFILMENT AND SHIPPING TIMES: Timely order fulfilment

and shipping are crucial for ensuring customer satisfaction. They can decide to
aim for 90% of orders to be filled within 24 hours in order to reduce the average
order fulfilment time.

 COST EFFECTIVENESS: It is critical to keep track of operating costs and

expenses. By streamlining procedures, obtaining better supplier terms, or
automating work, they may seek to cut operating expenses by 15%, for example.

 PRODUCTIVITY AND CONTENTMENT OF EMPLOYEES: Employee

productivity and contentment have an impact on organisational effectiveness.
Through surveys, they may gauge employee happiness, productivity per
employee, and staff turnover rates. A 15% improvement in staff productivity or
attaining a turnover rate under 10% are two examples.

 MARKET SHARE AND COMPETITIVE ANALYSIS: Monitoring market

share and keeping tabs on rivals' activity may assist determine how effective a
company's plans are in the overall market. For instance, they could want to get
5% more market share in a certain market niche.
  QUALITY CONTROL: Control of the quality of the product and accuracy in
order fulfilment are essential for ensuring client satisfaction. They can monitor
the quantity of product flaws or order problems and establish precise quality
control criteria.

 SOCAL RESPONSIBILITY AND SUSTAINABILITY: Social responsibility

and environmental sustainability are important in the modern business world
because they can increase an organization's effectiveness. They can establish
goals to increase their community participation or lessen their carbon imprint.

 RETURN ON INVESTMENT(ROI): Determining the ROI for marketing

activities and campaigns may be useful in gauging the value of one's financial
investments. For various marketing initiatives or campaigns, they might define
ROI objectives.
Depending on their company objectives, sector, and available resources, they will
choose the precise measurements and benchmarks to use in measuring
organisational effectiveness. To respond to shifting market conditions and maintain
the long-term success of their e-commerce firm, it is essential to routinely assess
and modify these KPIs.
B. The fact that Ashish and Avanti favour the systems approach shows that they want to
treat their e-commerce start-up as an integrated system, where different parts cooperate
to meet the organization's goals. The systems approach is a comprehensive management
paradigm that emphasises the interdependence of many organisational components.
Here is a description of the systems approach and some instances of its advantages:

How the Systems Approach is explained:

 HOLISTIC VIEW: The systems approach sees an organisation as a

complex system made up of interconnected and dependent parts. It
 examines how these elements work together to accomplish organisational
objectives rather than concentrating simply on specific departments or
activities.

 INTERDEPENDENCE: It acknowledges that adjustments made to one

component of the system may have repercussions throughout the entire
organisation. For instance, a change in pricing strategy may influence
supply chain operations, customer satisfaction, and sales.

 FEEDBACK LOOPS: The systems approach also highlights how crucial

feedback loops are. Decision-making in other areas of the organisation can
be informed and improved by information and data from one area. For
instance, the customer service division's consumer input might influence
product development and marketing plans.

 CAUSE AND EFFECT INTERACTIONS: It is important to comprehend

the cause-and-effect interactions that exist inside the organisation. This
strategy aims to show how changes in one area could influence changes in
others, assisting organisations in making better choices.

Systems approach advantages include:

1. BETTER PROBLEM-SOLVING SKILLS: Ashish and Avanti are better able to

see issues and find solutions when they take the system into account. For instance,
if sales suddenly decline, they might look beyond the sales department to possible
causes in marketing, inventory control, or customer service.

2. IMPROVED COMMUNICATION: The systems approach encourages improved

communication and teamwork amongst many departments. For instance, the
 marketing team may work with the supply chain team to maintain smooth
operations if they are aware that pricing changes may affect the amount of inventory
needed.

3. RESOURCE ALLOCATION THAT IS OPTIMISED: This strategy aids in

resource allocation that is optimised. They can more effectively deploy resources to
deal with the problems if they recognise that a certain department or function is
having difficulties. For instance, if customer service is overburdened with
questions, more workers might be assigned to deal with the increasing task.

4. LONG-TERM SUSTAINABILITY: Ashish and Avanti can make decisions that

are sustainable and in line with the long-term goals of their e-commerce firm by
understanding the systemic implications of those actions. For instance, they may
make sure that expansion initiatives consider the capacity of their supply chain,
infrastructure, and customer service.

5. FLEXIBILITY: The organisation is more flexible and responsive to changing

conditions thanks to the systems approach. They may swiftly modify their tactics
across several departments in the event of a change in client preferences or market
conditions.

6. EFFICIENCY AND COST-SAVINGS: Finding and fixing systemic inefficiencies

can result in cost savings. They can simplify or remove a process, for instance, if
they find that it wastes resources and is redundant.

7. INNOVATION: Understanding internal connections in an organisation may foster

creativity. For instance, they can create creative solutions and products by
promoting cross-functional team collaboration.
In conclusion, Ashish, and Avanti's e-commerce business benefits from the systems approach
because it promotes a holistic picture of their organisation, enabling them to make informed
choices, enhance communication, and optimise resource allocation. Additionally, it encourages
creativity, flexibility, and long-term sustainability, all of which are essential for the
development and expansion of their company.