ORGANISATIONAL THEORY,

STRUCTURE AND DESIGN

Answer 1

Introduction :
With his work in the early 20th century, Henri Fayol—often referred to as the father
of the classical management approach—established the groundwork for contemporary
management concepts. His administrative theory placed a strong emphasis on fundamen-
tal ideas that improve the efficacy and efficiency of organizations. Several of the ideas pro-
moted by Fayol are still applicable in the fast-paced business world of today. We will talk
about the four main tenets of the classical approach in this context, which are still impor-
tant in modern organizations.

Concept & Application :

1. Division of Labor:

Fayol's Principle: Specialization is used in the division of labour to increase productivity.

Based on their qualifications and experience, each employee ought to have a distinct set
of duties.

Context Today: Employees in contemporary organizations frequently specialize in partic-

ular roles to maximize productivity. For instance, in a software development company,
testers focus on quality assurance, while programmers code. The output and efficiency are
improved by this specialization.

2. Fayol's Principle:

Fayol's Principle: An organization's authority hierarchy is referred to as a scalar chain. A

formal chain of command from top to bottom should govern communication.

Context Today: Modern organizations typically have hierarchical structures. In a corpo-

rate setting, for example, decisions are frequently made according to a clear chain of com-
mand that runs from top executives to managers and staff at lower levels. This guarantees
efficient accountability and communication.

3. Unity of Command:

Fayol's Principle: To prevent misunderstandings and confrontations, staff members

should only receive instructions from a single superior.

Context Today: To avoid conflicting orders, the unity of command principle is still essen-
tial. A production worker in a manufacturing setting should ideally answer to just one su-
pervisor. Conflicting instructions from different supervisors can cause confusion and lower
productivity.

4. The Scalar Chain of Command:

Fayol's Principle: The term "scalar chain" describes the organizational authority structure.
There should be a formal chain of command for communication from top to bottom.

Context Today: In modern organizations, hierarchical structures are common. Decisions

in a corporate setting, for example, frequently follow a clear chain of command from top
executives to managers and staff at lower levels. Accountability and communication will
run more smoothly as a result.

Conclusion :
Even after more than a century, Henri Fayol's traditional management theories are
still applicable in today's businesses. A testament to their adaptability to a variety of orga-
nizational contexts is the enduring nature of ideas such as equity, unity of command,
scalar chain, and division of labour. Even if contemporary management techniques have
changed, Fayol's ideas still offer insightful understandings of the underlying ideas that sup-
port successful and productive teamwork.

Answer 2
Introduction :
The Organizational Growth Model developed by Larry E. Greiner sheds light on the
different stages that businesses usually go through as they develop and expand. Organi-
zations must successfully navigate each phase's unique crisis to advance their develop-
ment. Let's examine the possible stages of a crisis using Greiner's model in light of Look-
Book's recent release of its new mobile application.
Concept & Application :
1. Creativity Crisis :

- Description: The organization's original inventiveness, inventiveness, and spirit of en-

trepreneurship characterize this phase. But as the business expands, there's a problem
with the founders' capacity to handle more complexity.
- LookBook Example: At first, the LookBook team might be thrilled with their brand-
new, imaginative mobile app. Coordination of efforts, handling the growing complexity of
development tasks, and meeting customer demands, however, may present difficulties.

2. Direction Crisis:

- Description: The company is going through a leadership and management crisis at this
point. The expanding organization requires more codified procedures and frameworks
for management.

- LookBook Example: There might be a crisis in terms of decision-making and leader-

ship as LookBook grows its mobile app project. Confusion among team members can
impact project timelines and quality when there is a lack of clarity in direction.

3. Crisis in Delegation:

- Description: The capacity to delegate and have faith in others to make decisions is be-
coming increasingly problematic as the organization grows. It could be difficult for
founders to relinquish power.

- LookBook Example: Delegation may become more difficult for the business as the mo-
bile app project grows. The inability of founders to trust team members to make impor-
tant decisions could cause bottlenecks in the project's advancement.

4. Coordination Crisis:

- Description: Managing interdepartmental relationships and enhancing coordination

amongst various organizational components are the main concerns at this point in the
crisis.

- LookBook Example: The development, marketing, and customer support teams may
experience a coordination crisis as LookBook's mobile app project expands. A lack of
cooperation and communication could be detrimental to the app's overall success.

5. Collaboration Crisis:

- Description: During this stage, the company is having trouble encouraging cooperation
among different departments. A more integrated approach to organizational operations
is required.

- LookBook Example: For the duration of the mobile app launch, the business might find
it difficult to guarantee efficient communication between the technical and non-technical
 teams. The overall performance, marketing plan, and user experience may all be im-
pacted by this crisis.

Conclusion :
Using Greiner's Organizational Growth Model, LookBook's introduction of a new
mobile application could guide the business through several stages of crisis. It is essential
for sustainable growth to identify these crises and put the right plans in place for each
stage. LookBook can achieve greater success in the highly competitive mobile app market
by taking proactive measures to tackle these challenges and manage the intricacies that
come with organizational expansion.

Answer 3 (A)

Introduction :
Evaluating organizational effectiveness is essential to determining a company's
overall success and performance. In the case of Ashish and Avanti's e-commerce start-up,
assessing efficacy entails looking at several factors to make sure the business is meeting
its objectives and running smoothly.

Concept & Application :

1. Financial Performance:

- Explanation: Financial metrics offer a numerical evaluation of the prosperity and health
of the business's finances. This covers return on investment, profitability, and growth in
revenue.

- Model for Online Retail Startup: Ashish and Avanti can monitor monthly and annual
revenue growth to gauge the success of their business. For financial sustainability, they
can also examine profit margins and return on investment.

2. Feedback from Customers:

- Explanation: Customer satisfaction is a sign of a successful business. Evaluate how

well the company is meeting customer expectations by keeping an eye on customer re-
views, loyalty, and feedback.
- As an Illustration for the Online Retailer: The degree to which Ashish and Avanti's e-
commerce platform satisfies customer needs and expectations can be determined by
using customer satisfaction surveys, platform reviews, and Net Promoter Score (NPS).

3. Efficiency in Operations:

- Explanation: Effective use of resources is guaranteed by operational efficiency. Evalu-

ating workflow efficiency, supply chain management, and processes are all part of this.

- As an Illustration for the Online Retailer: To gauge how well their e-commerce plat-
form is running, Ashish and Avanti can examine order processing times, inventory
turnover, and fulfilment precision.

4. Worker Engagement and Productivity:

- Explanation: Effective organizations benefit from having productive and engaged work-
forces. An understanding of the workforce's influence on corporate success can be
gained by tracking employee satisfaction, attrition rates, and productivity levels.
- Model for the Online Retailer: The organization's level of employee engagement and
productivity can be evaluated with the use of key performance indicators (KPIs), perfor-
mance reviews, and regular employee surveys.

5. Inventiveness and Flexibility:

- Explanation: The ability of the organization to innovate and adjust to shifting market
conditions is another factor that contributes to its effectiveness. This entails launching
new goods, implementing cutting-edge technology, and outpacing market trends.

- Example of a Start-up in E-Commerce: Ashish and Avanti can evaluate their efficacy
by keeping an eye on how frequently new products are introduced, how well new tech-
nologies are implemented, and how well the company adjusts to shifts in the e-com-
merce market.

Conclusion :
An extensive evaluation of the company's financial performance, customer satisfac-
tion, operational effectiveness, worker productivity, and capacity for innovation is neces-
sary to determine how effective the organization is for Ashish and Avanti's e-commerce
start-up. Their ability to make well-informed decisions, pinpoint areas for development, and
guarantee the long-term viability of their enterprise will all be facilitated by routinely observ-
ing these critical metrics.
Answer 3(B)
Introduction :
According to the systems approach to organizational effectiveness, an organization
is made up of various interdependent and connected parts that work together to accom-
plish shared objectives. Ashish and Avanti's inclination towards the systems approach
suggests that they understand the intricate and ever-changing nature of their e-commerce
startup, wherein multiple factors interact to impact overall performance.

Concept & Application :

1. Interconnected Components:

- Description: According to the systems approach, an organization is made up of several

interconnected parts, including teams, departments, and processes, all of which contrib-
ute to its overall effectiveness.

- Model for the Online Retailer: Ashish and Avanti would understand the connections
between marketing, operations, and customer support departments in their e-commerce
platform. Operational efficiency and the overall customer experience can be affected by
changes made in a single area, such as marketing strategies.

2. Overview:

- Description: By highlighting the idea that an organization's effectiveness is greater than

the sum of its parts, this strategy promotes a holistic viewpoint. It takes into account the
relationships between different components.

- Model for the Online Retailer: Ashish and Avanti would examine how changes in one
area impact the entire company rather than just concentrating on specific departments.
For example, introducing a new customer support system could affect customer satis-
faction and operations simultaneously.

3. Feedback Loops:

- Description: Systems thinking entails identifying feedback loops, in which inputs in one
area of the organization are impacted by outputs in another. It is possible to adapt and
improve through constant feedback.

- Model for the Online Retailer: Customer feedback loops can be used by Ashish and
Avanti to determine how UI modifications affect customer satisfaction. This makes their
platform more capable of iterative improvements.

4. Flexibility and Adaptability:

- Description: The systems approach recognizes that adaptation is necessary to deal
with changes that occur both inside and outside the organization. It makes it possible for
organizations to adapt and change with the times.

- Model for the Online Retailer: Ashish and Avanti may need to modify their technologi-
cal infrastructure or business model as the e-commerce sector develops. They can eval-
uate how such changes will affect different components and come to well-informed deci-
sions thanks to the systems approach.

Advantages:
1. Comprehensive Problem Solving:

- Description: By addressing root causes rather than symptoms, systems thinking en-
ables effective problem-solving by allowing for a comprehensive understanding of is-
sues.

- Model for Online Retail Startup: Ashish and Avanti would employ a systems approach
to find and fix any underlying issues, like ineffective procedures or poor communication,
if the startup saw a drop in customer satisfaction.

2. Improved Decision-Making:

- Description: The systems approach serves as a framework for improved decision-mak-

ing by taking the organization as a whole into account when making decisions.

- As an Illustration for the Online Retailer: Ashish and Avanti would evaluate the ef-
fects of any new technology solution before putting it into use, making sure that it would
not interfere with current workflows and would be in line with the overall objectives.

Conclusion :
Given the interconnected and dynamic nature of their business, Ashish and Avanti
made a wise decision in choosing the systems approach for their e-commerce start-up.
Accepting this strategy will allow them to see things more holistically, be more flexible, and
be able to solve problems more effectively, all of which will increase the venture's organi-
zational effectiveness.