ob report group11

7/29/2019 OB Report Group11.

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ORGANISATIONAL DESIGN AND DEVELOPMENT

Submitted by:

Bhavesh Dhirasaria 12PGDM074

Deepti Singh 12PGDM075

Diksha Parti 12PGDM077

Tanvi Pandey 12PGDM118


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INTRODUCTION

Why FMCD ? :

As rapid socio-economic changes sweep across India, the country is witnessing thecreation of many new markets and a further expansion of the existing ones. Indias consumer market is riding the crest of the countrys economic boom which has lead to tecreation of a separate consumer good segment known as FMCD i.e fast moving consumerdurables. The Indian consumer durables industry has witnessed a considerable change in

the past couple of years. Changing lifestyle with access to disposable incomes, easyfinance options and a surge in advertising has been instrumental in bringing about a seachange in the consumer behavior pattern. According to a study conducted by FICCI on theIndian consumer durables industry, a shift in consumer preferences towards higher-end,

technologically advanced branded products has been quite discernable.The Consumer Durables industry consists of durable goods and appliances for domesticuse such as televisions, refrigerators, air conditioners and washing machines. Instruments

such as cell phones and kitchen appliances like microwave ovens are also included in thiscategory. The consumer durables industry can be broadly classified into two segments:Consumer Electronics and Consumer Appliances.

Importance of Organizational behaviour:

At a visible level, corporate culture is defined by a range of formal mechanisms used to set

direction, tone and pace. These mechanisms, which include the strategy, organization

structure, rules, mission statements, values and role model descriptions, are designed and

framed to encourage desired behaviours. The key to developing corporate culture,

particularly one that becomes a source of competitive advantage, requires gaining insight

into how culture is formed, including the important role that employees' attitudes andperceptions play in the process. Organizations that take time to understand the process

and develop a highly engaged workforce can expect to see significant performance

improvements.

Thus we aim to study the impact and difference in the organizational behaviour of two

companies operating in the same industry i.e FMCD.


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APPLE INC.

History

Apple Inc, formerly Apple Computer, Inc., is an American multinational

corporation headquartered in Cupertino, Californiathat designs, develops, and

sells consumer electronics, computer software, and personal computers. The company

was founded on April 1, 1976, and incorporated on January 3, 1977. The word

"Computer" was removed from its name on January 9, 2007, to reflect its shifted focus

towards consumer electronics after the introduction of the iPhone. Its best-known

hardware products are the Mac line of computers, the iPod, the iPhone and the iPad. Its

software includes the OS Xand iOS operating systems, the iTunes media browser,

the Safari web browser and the iLife and iWorkcreativity and production suites.

As of November 2012, Apple has 394 retail stores in fourteen countries as well as the

online Apple Store and iTunes Store. It is the largest publicly traded corporation in theworld by market capitalization, with an estimated value of US$626 billion as of September

2012. The Apple market cap is larger than that of Google and Microsoft combined. As of

September 29, 2012, the company had 72,800 permanent full-time employees and

3,300 temporary full-time employees worldwide. Its worldwide annual revenue in 2010

totalled $65 billion, growing to $156 billion in 2012.

STRUCTURE ANALYSIS

Dimensions of structure

Division of LabourIt is highly specialised and apple employees are not exposed to functions outside the area

of their expertise.

StandardizationApples approach is hardly one-size-fits-all. Rank-and-file employees are often givenclear-cut directives and close supervision. Proven talent gets a freer hand, regardless of

job title.

Horizontal differentiationMatrix structured departmentalization exists in apple .This type of departmentalization is a

combination of process and functional departmentalization such as

finance,marketing,legal,design,hardware,operations,retail,software engineering, etc
http://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Cupertino,_Californiahttp://en.wikipedia.org/wiki/Californiahttp://en.wikipedia.org/wiki/Consumer_electronicshttp://en.wikipedia.org/wiki/Consumer_electronicshttp://en.wikipedia.org/wiki/Macintoshhttp://en.wikipedia.org/wiki/IPodhttp://en.wikipedia.org/wiki/IPhonehttp://en.wikipedia.org/wiki/IPadhttp://en.wikipedia.org/wiki/OS_Xhttp://en.wikipedia.org/wiki/IOShttp://en.wikipedia.org/wiki/Operating_systemhttp://en.wikipedia.org/wiki/ITuneshttp://en.wikipedia.org/wiki/Safarihttp://en.wikipedia.org/wiki/ILifehttp://en.wikipedia.org/wiki/IWorkhttp://en.wikipedia.org/wiki/Apple_Storehttp://en.wikipedia.org/wiki/Apple_Store_(online)http://en.wikipedia.org/wiki/ITunes_Storehttp://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalizationhttp://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalizationhttp://en.wikipedia.org/wiki/Googlehttp://en.wikipedia.org/wiki/Microsofthttp://en.wikipedia.org/wiki/Microsofthttp://en.wikipedia.org/wiki/Googlehttp://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalizationhttp://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalizationhttp://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalizationhttp://en.wikipedia.org/wiki/ITunes_Storehttp://en.wikipedia.org/wiki/Apple_Store_(online)http://en.wikipedia.org/wiki/Apple_Storehttp://en.wikipedia.org/wiki/IWorkhttp://en.wikipedia.org/wiki/ILifehttp://en.wikipedia.org/wiki/Safarihttp://en.wikipedia.org/wiki/ITuneshttp://en.wikipedia.org/wiki/Operating_systemhttp://en.wikipedia.org/wiki/IOShttp://en.wikipedia.org/wiki/OS_Xhttp://en.wikipedia.org/wiki/IPadhttp://en.wikipedia.org/wiki/IPhonehttp://en.wikipedia.org/wiki/IPodhttp://en.wikipedia.org/wiki/Macintoshhttp://en.wikipedia.org/wiki/Consumer_electronicshttp://en.wikipedia.org/wiki/Consumer_electronicshttp://en.wikipedia.org/wiki/Californiahttp://en.wikipedia.org/wiki/Cupertino,_Californiahttp://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Multinational_corporation


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Vertical differentiationApple prides itself on its unique corporate culture. On its job site for corporate employees,

it ensures potential applicants that the organization has a flat structure, lacking the layers

of bureaucracy of other corporations.

CentralizationIt is the decentralization of authority at Apple that drives staff to feel that they have the

opportunity to change the world and make a difference. A lot of people can see what is

needed in this world, but at Apple, employees know that not only can they envision that

which is needed, but they also have the resources and the talent around them to distill a

finely tooled product or service in a truly innovative fashion. Individuals working at Apple are

also provided the freedom and flexibility to make their own hours and are given a loose

structure but are also expected to provide 110% of their effort and achieve results.

FormalizationFormalization is the extent to which rules and procedures are followed in an organization.

Apple does not adhere to normal work environments in which employees are at their

stations from 9:00 a.m. to 5:00 p.m. Instead, Apple markets itself as a fast-paced,

innovative, and collaborative environment committed toward doing things the right way.

Span of controlThe span of control is broad, as the structure is flat and high level of supervision and

control is observed. This wide span of control increases organizational efficiency as it

provides autonomy to and empowers employees to enable them to give their best. On anaverage, the number of employees directly reporting to a manager is around eight to ten.

However, depending on the project and client requirements, the team size varies. As Mr.

Amit saini, marketing manager apple recalls, his first team had 10- 12 team members

reporting to the manager.

FlexibilityApple is a notable example of a company that had successfully adopted a flexible strategy.

Although, the company is a leader in the smart phone and tablet markets, its innovations

are quickly copied within months or even weeks of product introduction. The industry

structure is unstable and is rapidly evolving, it is best to adapt an emergent strategy,

addressing issues as they arise, while maintaining flexibility and operational excellence.

Reward and appraisalsThe appraisal system is annual on the bases of the KRAs of the individual. Reward system

is target achievement based and is mostly monetary; focus is also on the job

characteristics which keeps the employees highly motivated.


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SAMSUNG

History

Samsung Electronics Co., Ltd. is a South Korean multinational electronics company

headquartered in Suwon, South Korea. It is the flagship subsidiary of the Samsung

Group and has been the world's largest technology company by revenues since

2009.Samsung Electronics has assembly plants and sales networks in 61 countries and

employs around 221,000 people.

Samsung India Electronics Private Limited (SIEL) is the Indian subsidiary of the US $55.2

billion Samsung Electronics Corporation (SEC) headquartered in Seoul, Korea. It is the hub

of Samsungs South West Asia Regional Operations, and looks after its business in Nepal,

Bangladesh, Maldives & Bhutan besides India. SIEL commenced operations in India inDecember, 1995. Initially, a player only in the Colour Televisions segment, it later diversified

into colour monitors (1999) and refrigerators (2003). Today, it is recognized as one of the

fastest growing brands in the sphere of digital technology, and enjoys a sales turnover of

over $ US 1 billion in a just a decade of operations in India.

Samsung in India has a presence in the following areas of business:

Consumer Electronics (CE)/Audio Visual (AV) Business Home Appliances (HA) Business

Information Technology (IT) Business

Its operations are broadly divided into the following key sub-functions:

Sales & Marketing Manufacturing Software Centre Operations

STRUCTURE ANALYSIS

Dimensions of structure

Division of LabourThe entire work force is divided into 3 broad departments based on their functions namely,

Sales & marketing, manufacturing and research. These departments are water tight

within themselves as such; however inter-mingling can take place among the employees

within these departments, coming from different sections.
http://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Electronicshttp://en.wikipedia.org/wiki/Suwonhttp://en.wikipedia.org/wiki/Subsidiaryhttp://en.wikipedia.org/wiki/Samsung_Grouphttp://en.wikipedia.org/wiki/Samsung_Grouphttp://en.wikipedia.org/wiki/Assembly_linehttp://en.wikipedia.org/wiki/Assembly_linehttp://en.wikipedia.org/wiki/Samsung_Grouphttp://en.wikipedia.org/wiki/Samsung_Grouphttp://en.wikipedia.org/wiki/Samsung_Grouphttp://en.wikipedia.org/wiki/Subsidiaryhttp://en.wikipedia.org/wiki/Suwonhttp://en.wikipedia.org/wiki/Electronicshttp://en.wikipedia.org/wiki/Multinational_corporation


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StandardizationVarious company policies are decided based on needs of various divisions. There is astrong emphasis on strict timings, late attendance, and strict adherence to formalprocedures. However, application of similar policies in other divisions, where more flexibility

is needed creates a problem for the organisation. Horizontal differentiation

Functional departmentalization exists in apple with the grouping of all similar and

specialized activities and functions which include sales and marketing, manufacturing and

software centre operations wherein all the employees belonging to a function work

together, supplement each others skills and sharpen their specialized skills which leads to

effective communication and cooperation.

Vertical differentiationSamsung has a very tall structure having hierarchical levels as long as 16 which leads to aproblem of information distortion, delay in decision making and increased time lag between

the decision and its implementation. It starts from 4 levels of operators, 3 levels of

engineers, 2 Assistant managerial levels, 2 managerial levels followed by AGM,DGM,GM

and further on to the various executives.

CentralizationSamsung enjoys the benefits of a decentralized organisation as the decision making occurs

at the lowest levels of the organisation i.e the operators and engineers, also the different

divisions enjoy a great deal of autonomy in decision making. A fairly decentralized model

hands the organization the advantage of enabling various parts of the organization to

respond to the changes in the environment. . The Goals are decided by the top

management in consultation with the lower levels of management. The Goals which the

Managers set for their team are very well set after a discussion with them and hence the

employees owe complete compliance towards those Goals.

FormalizationDue to a narrow span of control leading to strict supervision and control, company norms

and policies are adhered to leading to a formalized system.

Span of controlSamsung enjoys a narrow span of control ranging 5-6 employees under a superior which

leads to a tall organizational structure and helps in exercising close supervision, tight

control and proper coordination for ensuring adhering to work standards and norms.

Reward and appraisalAppraisals are done annually wherein points are given and one gets a promotion by getting

3 points, which occurs over a span of 2 years or more. An equal mix of monetary and non

monetary incentives is provided such as employee of the month, giving out cell phones,movie tickets based on individual performances etc.


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Comparative Analysis

Samsung's business pattern is to enter existing markets and catch up with their leadersquickly. They used this strategy to enter into cell phone market, semiconductor business,

market of digital TV and LCD, and laser printer market.

On the other hand, Apple is a market creator. They created the innovative product, iPod.

They changed and dominated the existing mp3 market in five years. The iPhone is also an

creative product even though Samsung and Nokia are making its similar kinds of products.

Another noteworthy difference between the structures of the two organizations is that

apple is highly centralized structure with decision making restricted to top levels whereas,

Samsung has a decentralized structure with authority controls existing at lower levels also.

Over the years Apple has evolved into a relatively flat organization. With this flat structure,

upper management can move people and ideas around the company, in a manner

indicative of a matrix structured organization. The companys matrix structure is made

even more dynamic because Apple does not hire consultants, use external focus groups,

or rely on outside contractors for anything important. They create products they think are

cool and as such they become their own focus group adding to the dynamic and

empowering nature of their human resource philosophy.

The culture of Apple is based on an ideal that self-motivated individuals will work harder if

they do not have a boss micromanaging every action. The unique structure of Apple hasallowed it to grow and react more quickly to changes than its competitors. On its job site

for corporate employees, it ensures potential applicants that the organization has a flat

structure, lacking the layers of bureaucracy of other corporations. Apple also emphasizes

that it does not adhere to normal work environments in which employees are at their

stations from 9:00 a.m. to 5:00 p.m. Instead, Apple markets itself as a fast-paced,

innovative, and collaborative environment committed toward doing the right thing.

Samsung Electronics strives to build a creative organizational culture, and acknowledges

that the investment it makes in strengthening the core competencies of its employees will

have a direct impact on its competitiveness. It actively promote a flexible organizational

culture that allows employees to pursue a healthy work-life balance, in a dynamic, creative

and challenging work environment that is not risk-averse.


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DRIVERS OF EFFECTIVENESS

Apple:

Apples motto of Think Different, is what separates it from its competition as they come

up with forefront products. Apple generates ideas, manage innovation and then effectively

diffuse the innovation. They generate ideas or search for opportunities by carrying out

effective research and development, Apple has an innovation factory which carries out all

experiments using the talented pool of people they have. It follows competition and tries to

stay one step ahead of them. The 4Ps of innovation are Process, Product, Paradigm and

Position. Apple has been effective in the implementation of these 4Ps.

Consumers position Apple in their minds as an Innovative and Creative company, and theirproducts are not only bought for the ingenuity and use but also as a fashion accessory.

Effective linkages and networking is very important as valid information can be gained from

them, so relations should be maintained with suppliers, dealers and other partners. Apple

is also very effective in finding new market opportunities and reorganizing areas which

were inefficient. It fills the gaps existing in the markets for example the gap of a product

which was needed to fill the gap between a computer and a phone, so Apple came up with

IPAD.

Samsung:

The critical factors in building its brand were the strength and quality of the organization'srelationships and the ability to provide measurable benefits to customers. Samsung's

vision encompasses a world where interconnectivity, new levels of interactivity andaccessibility, and a globalized society drive a demand economy.

1. Samsung didn't just focus on the next quarter. A brand management plan mustlook out five and ten years into the future at a minimum.2. Samsung realized and had the courage to make substantial organizational shiftsand changes in conjunction with its brand strategy.3. A detailed plan was laid out to achieve the objective. And, very importantly, the plan

was not advertising centered -- rather, it placed a focus on product development, selectionof distribution channels, channel marketing as well as external and internalcommunications.


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RECOMMENDATIONS

Apple:

As apple expands its activities across geographical boundaries, product lines andcustomer bases, it needs to bring about decentralization in its structure to better respond

to changes in the environment and increased control and coordination of different parts ofthe organization.

Samsung:

Samsung should strive to reduce its vertical departmentalization as the number ofhierarchical levels is a lot which leads to delay in decision making etc.

This also leads to problem in the promotion system as it takes a long time to get promotedwithin the organization.

Samsung should provide flexi working hours and less overtime for the employees whichwould reduce the attrition rate, which is highest at lower levels i.e engineers.


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References

1. Apple.com2. Samsung.co.in3. Wikipedia.org4. http://robeberhard.com/?page_id=1675. Organization design and development by Bhupen Srivastava6. Analysis done on the basis of personal interview and an online survey on

organizational diagnosis

https://docs.google.com/a/imi.edu/spreadsheet/viewform?fromEmail=tr

ue&formkey=dDRZZ1lMSHRMWnNQSmNxTS01Nl9PZHc6MQ
http://robeberhard.com/?page_id=167http://robeberhard.com/?page_id=167http://robeberhard.com/?page_id=167

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