Types of Organisation structures-Functional & Divisional Structures

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  • Q1

    ‘Quality Ltd. is dealing in a readymade garment manufacturing and have three separate departments (Purchase, production and marketing) and departmental heads look after these functions. Recently company reported a loss of 6 lakhs in first quarter and Sierra who is CEO of the company called all the departmental heads to discuss this matter. Departmental heads were blaming each other for this loss and it became very difficult for Sierra to fix the responsibility.

    On the basis of the given information Quality Ltd. answer the following question:

    (a) The above case highlights the problems associated with a particular form of organisation structure. Identify that organisation structure.

    (b) List the disadvantages of such type of structure.

    Marks:3
    Answer:

    (a) Functional organisation structure has been adopted by Western Ltd. that has resulted in Difficulty in Fixation of responsibility.

    (b) The disadvantages of Functional organisation structure adopted by Western Ltd. are:

    (i) Ignoring organizational objectives

    (ii) Difficulty in Inter-departmental Coordination.

    (iii) Hurdle in complete development.

    Question-4

    Appy Laboratories Ltd. is a decade old company with modern strategically placed plants. The company’s registered office is at Powai, Mumbai and plants are located at Daman, the marketing is undertaken from Manali.

    On the basis of the given information about Appy Laboratories Ltd. answer the following questions:

    (a) Which type of organisation structure should the company adopt.

    (b) State any four advantages of this organisation structure.

    Marks

    1

    Answer

    Crystal Laboratories Ltd. should adopt functional structure as it is a single product company with different departments situated at different locations.

    The company gets following advantages by adopting functional structure:

    (i) Coordination: All the persons working within a department are specialists of their respective jobs. It makes the co-ordination easier at departmental level.

    (ii) Helps in increasing managerial efficiency: Managers of one department are performing same type of function again and again which makes them specialised and improves their efficiency.

    (iii) Minimises Cost: It leads to minimum duplication of effort which results in economies of scale and thus lowers cost.

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  • Q2

    Best Foods Ltd. is engaged in the trading of ‘Pastas’. It has its registered office in jaipur, manufacturing unit in Ganganagar and marketing department in Kota .Which type of organisational structure the company should adopt to achieve its target?

    Marks:1
    Answer:

    Functional Structure

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  • Q3

    ‘‘Absolute Ltd’ is engaged in manufacturing of washing machines. The target of the organisation is to manufacture 400 washing machine in a day. There is an occupational specialisation in the organisation which promotes efficiency of employees. There is no duplication of efforts in such type of organisation structure. Identify the type of organisation structure described above.

    Marks:1
    Answer:

    Functional Structure

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  • Q4

    ‘Quality Ltd. is dealing in a readymade garment manufacturing and have three separate departments (Purchase, production and marketing) and departmental heads look after these functions. Recently company reported a loss of 6 lakhs in first quarter and Sierrawho is CEO of the company called all the departmental heads to discuss this matter. Departmental heads were blaming each other for this loss and it became very difficult for Sierra to fix the responsibility.

    On the basis of the given information Quality Ltd. answer the following question:

    a. The above case highlights the problems associated with a particular form of organisation structure. Identify that organisation structure.

    b. List the disadvantages of such type of structure.

    Marks:3
    Answer:

    (a) Functional organisation structure has been adopted by Western Ltd. that has resulted in Difficulty in Fixation of responsibility.

    (b) The disadvantages of Functional organisation structure adopted by Western Ltd. are:

    (i) Ignoring organizational objectives

    (ii) Difficulty in Inter-departmental Coordination.

    (iii) Hurdle in complete development.

    View Answer
  • Q5

    Appy Laboratories Ltd. is a decade old company with modern strategically placed plants. The company’s registered office is at Powai,Mumbai and plants are located at Daman, the marketing is undertaken from Manali.

    On the basis of the given information about Appy Laboratories Ltd. answer the following questions:

    a. Which type of organisation structure should the company adopt.

    b. State any four advantages of this organisation structure.

    Marks:3
    Answer:

    Crystal Laboratories Ltd. should adopt functional structure as it is a single product company with different departments situated at different locations.

    The company gets following advantages by adopting functional structure:

    i. Coordination: All the persons working within a department are specialists of their respective jobs. It makes the co-ordination easier at departmental level.

    ii. Helps in increasing managerial efficiency: Managers of one department are performing same type of function again and again which makes them specialised and improves their efficiency.

    iii. Minimises Cost: It leads to minimum duplication of effort which results in economies of scale and thus lowers cost.

    View Answer