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Course Code : MS-10 revised Set – 2
Course Title : Organisational Design, Development and Change
Assignment No. : MS-10/TMA-1/SEM-1/2005

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1. Discuss the meaning and theories of Organisation Design. Describe the key factors affecting organisation design with suitable organisational examples.

Answer. Organization design is central to an enterprise’s ability to be market driven, adaptive, innovative, and more – in short, to be able to compete effectively. Following are some core principles:

Factors Affecting Organization Structure :

  1. Environment: The organization is not an isolated island and is affected by changes in the environment and it too affects the environment, while undertaking organizational design the complexity and stability of the relevant environment must be taken into account. The organizational environment can be homegrown stable, homogenous shifting, heterogeneous-stable or heterogeneous-shifting, heterogeneous-stable or heterogeneous-shifting according to Thompson. Ray Jurkovich came up with a core topology matrix for organizational environments which includes homogeneity, heterogeneity, and change rate continuum in 64 combinations.
  2. Technology: Technological changes affect organizations in more ways than one way. The changes in technology are leading not only to the new products and processes but also change the requirements of raw materials and human skills. New technologies call for new structures to faster change and growth. The type of technology affects the workflow in the organization, initiation of action and communication patterns. Improper organizational design may lead to problems like alienation.
  3. Size: Organizations could be large or small usually a threefold criteria is established to determine the size independently or jointly. (a) number of persons employed (b) amount of capital employed (c) volume of turnover. A small organization when effective and growing becomes large. A large organization on one hand is able to reap benefits due to economies of scale while on the other hand economies of scale also increase.
  4. Ownership: Organizations are often classified based or ownership. They are classified as private sector, public sector or co-operative sector based on ownership. However increasingly, the boundaries are no longer fixed and private enterprises are found to have large public holdings while public sector has an element of mixed or joint ownership and enterprise. The elements and characteristics of organization, particularly when seen in action do not any longer have universal distinctiveness merely on the basis of ownership criterion.

Social change & Human Aspects: A number of basic socio-cultural conditions impinge or organizations and their functions. It is difficult to measure and quantify whether and how these factors affect organization and management systems.

Organizational Design at NDDB :

NDDB (National Dairy Development Board) is a bureaucratic organization with mainly 2 types of activity development and operations.

NDDB’s organizational structure can be loosely fitted into a Divisional Organization structure. There are basically strategic Business Divisionalisation and Territorial Divisionalisation existing here. The organization is divided into units based on strategically identified business portfolios the Development and Operations. Further, since NDDB covers a vast area and is spread over the entire country, there is some amount of territorial Disionalisation where each regional office has its own set of functional departments and operate under the strategic policies and guidelines established by corporate management. The head office is kept informed through the special cell set up for Regional Co-ordination. As the departments of Human Resource Development etc are directly reporting to the Chief Executing duplication of these services is avoided in the different functional areas.

Further NDDB has Management Committees for policy-making, provision of technical assistance and overall management of specific projects and programmes.

Thus the structure has an element of functional and divisional components. The three main areas can be as under:

    1. Office of the Chairman & Chief Executive
    2. Development (Applied Research & Development)
    3. Operations

Ownership: While setting up the organization structure the above mentioned factors have been kept in mind. The NDDB being a public sector organization but is also involved in profit making motive has basically a bureaucratic set up.

Size: The organization is spread all over the country so to manage the various regions a regional co-ordination committee has been set-up to improve regional communication and speed-up the processes at Head Office. Thus size has been considered in organizational design.

Technology: NDDB has to keep in touch with various changing technologies in bio-technology area and provide such know-how to different regions as well as co-operatives. Besides NDDB has computerized every possible area. To computerize various departments and provide technical support a computer services sub-group has been set up. This also avoids duplication of these services in every department. Further the MIS sub-group provides data and information required for planning, decision making performance evaluation etc.

Human Aspects: To increase co-operation and co-ordination in departments and offset the dysfunctional aspects of bureaucracy the Human Resource Development group organizes various training and development programmes. Wherever possible NDDB has provided campuses to live us for employees of all levels and improve quality of life.

Departmentation: Departments have been formed keeping in mind the key functional areas of the organizations. Departmentation has also been kept to the minimum. All support services are provided as separate groups to avoid duplication and provide support to the entire organization.

Span of Management: Unlike other bureaucracies NDDB has a short structure, i.e., it is horizontal and incorporates wide spans and limited layers of control at horizontal levels. Vertically there are no more than 5 levels from the Chief Executive Office downwards.

Delegation of Authority: Delegation of authority occurs down the vertical levels. The framework of rules and regulations also aids the process of delegation.

Centralization & Decentralization: NDDB has a centralized decision-making process with vast powers vested in the hands of the CEO. On the one hand decentralization is to the extent that any department head can decide on a course of action independently at a region or department on the other hand the CEO’s sanction may be required for a minor affair such as sanction of an office vehicle for a particular task.

Environment: Being a large organization with offices largely in rural areas, the organization has a great social impact on the environment. It contributes to the progress of the area by giving the environment and providing schools.

Conclusion: From the above discussion it is clear that NDDB though bureaucratic has designed an organizational structure which greatly facilitates its functioning. Factors like size, technology, ownership, human aspects of control delegation of authority, centralization and decentralization have been taken into account while designing the organization structure. Due to its large size and varied functions some further decentralization is required in areas which are insignificant, to ensure smooth day to day functioning. This would get around unnecessary delays so commonly associated with government organizations.

2. Briefly describe the horizontal, boundary less and virtual organisation designs. Explain how they meet the challenges of the new environment.


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