5.
Present the structure of your organization and explain the name of it at various levels
Structure at Organization level: Multi-divisional
Reason: Chart is self-explanatory
1. Presence of centralized support departments
2. When Functional specialists from centralized support departments are allocated to specific project, they report to the
Project director
3. Each Project is self-sufficient for executing the project from the start to the end
4. Cluster Project Director role is created only to reduce the span of control of CEO. He does not play any major
integrating role.
Structure at Project site level: Product Division Structure
1. Each execution manager has to coordinate extensively with the support functions. Hence the structure is organic
2. Functional differentiation is high
3. Hierarchy is not strictly followed
Q6. Explain the reason for above mentioned structure based on 5 contingency
factors
1. Environment: at site level
a. Customer: L&Ts highest value is customer satisfaction and continuous
improvement. So while executing any activity, quality and safety are
given prime importance. So execution managers have to coordinate
with safety and quality functions at every point of time.
b. Suppliers: For paying the suppliers execution managers have to
coordinate with finance function
c. Sub-Contractors: For Sub-contractor billing planning has to coordinate
with all execution managers
d. Each execution manager need not be given full self-sufficiency as
coordination between execution team and support functions can be
managed efficiently
e. Depending on the size of the project, the decision making could be
centralized or de-centralized. But in all projects there will be good
amount decentralization.
Environment: at organization level
a. Along with specific environment, CEO along with corporate managers
have to deal with the general environment like economic, political,
technological, environmental and international forces
b. For the corporate managers to concentrate on long term goals of the
company, they are relieved of the coordination activities with project
directors. So the project directors are given functional managers, report
to the directors.
2. Goals and strategy
a. At site level, there is high level of interaction with the customer and the
focus of the employees is customer satisfaction and faster execution.
So there is high level of decentralization. The organic structure paves
the way for better provision of services
b. At the organizational level the goal is to get more projects and devising
ways to improve the efficiency of execution. Since they are not
involved in day to day execution of projects, they get a lot of time to
concentrate on their long term goals.
3. Culture
a. Culture is the same at both the organization and site level.
b. Same terminal and instrumental values namely high quality,
excellence, continuous improvement and lean execution
c. Change in CEO may affect the culture of whole company including the
facilities available for site based employees.
4. Technology at site level
a. At site level, power plant operations employ continuous process
technology due to its high technical complexity. Ratio of engineers to
field operators is 1 to 3 and there are 5 hierarchical levels. The
processes are mostly automated and require human intervention only
during start-up or shut down. The processes are monitored through
computers and distributed control systems.
b. Erection and commissioning activities cannot be automated and the
work depends entirely on skills, knowledge and procedures and hence
employ small batch and unit technology. The ratio of engineers to
supervisors is 1 to 10 and there are 2 or 3 hierarchical levels.
c. All the departments performing the activities mentioned above follow
organic structure.
Technology at organization level
a. At organization level, the company always tries to increase the level of
technical complexity and to increase the efficiency of functioning. To
increase the monitoring and control over the work process and make it
predictable, they implement tailor made software for each process. But
still the work done at corporate level cannot be automated. Knowledge
and skills are the most desired qualities and work depends a lot on them.
So the work employs small batch technology with a little bit of technical
complexity.
b. Ratio of managers to non-managers is 1 to 5 and there are 3 or 4
hierarchical levels.
5.
Size
a.
Each site has an average strength of 50 employees. Ideal for organic
structure. Integration is
possible and increases efficiency of
employees.
b.
Corporate office houses more than 2000 employees. Best suited
structure is mechanistic structure where integration is low and centralized
decision making increases efficiency.
