Qualitative Analysis of Various Determinants in Organizational Design With Special Reference to ITC Limited, India

Author Name(s): Shivani M. Mehrotra, *Dr. Pingying Zhang
Author Email: shivanimehrotra1996@gmail.com

Abstract

The research examines the organizational design feature of erstwhile Imperial Tobacco Company of India Limited, (ITC Limited) India, to shed light on the growth potential of ITC. We apply a systematic process to address two fundamental design dimensions of an organization: efficiency and effectiveness to assess the design element in (a) goal, (b) strategy, (c) structure, (d) people, and (e) coordination. The company was incorporated on August 24, 1910, and over the past decades, it has become one of the most well-known and profitable organizations in India, as well as a formidable international player due to its robust product portfolio covering both the traditional and greenfield business. This study aims to examine how ITC’s organizational structure facilitates the company’s growth trajectory in the increasingly competitive domestic and global market.

Keywords: Organizational Design, ITC Limited, Step-by-Step Approach

Introduction

Organizational design is a step-by-step methodology which identifies dysfunctional aspects of work flow, procedures, structures and systems, realigns them to fit current business realities/goals and then develops plans to implement the new changes. For writing the current paper, the researcher have relied on the book written by Burton Richard M; DeSanctics; Gerardine; Obel, Borge, Titled “Organizational Design: A step by step approach” [1]. It involves two complementary problems, as how to partition a big task of the whole organization into smaller tasks of subunits and how to coordinate these subunit tasks so that they fit together to efficiently realize the bigger task or organizational goals[1]. The models in this book provides for each component, allows to visualize and plot the current location of the organization and then identify the desired point to which one would like the organization to move. In this way, one can see where they are, and where they want their organization to be in the organizational design space [1]

 

Conclusion

What is the appropriate organizational design of goal, strategy, structure, and people management for ITC? One suggestion by Burton and his colleagues [1] is the idea of design fit between design elements. That is, a good design is such that the design elements occupy the same quadrant in the two by two metrics. From the goal analysis, ITC being high on efficiency and effectiveness is in the ideal state. The strategy space is also in the D quadrant. From this perspective the goal and the strategy of ITC fit with each other. The D quadrant design is most complex organizational design to develop and maintain and not all firms are able to take this approach. Nevertheless, when analyzing the structure and people management, misfit occurs. ITC being the rationale player for the divisional configuration aims to be effective with its external focus on the product, customers or region. The structural design in the C quadrant does not fit the goal nor the strategy in the D quadrant. Similarly, the people management in the B quadrant does not fit with the goal nor the strategy. What should ITC do? Moving toward the same quadrant would be the recommendation. Given the goal and strategy already in the D quadrant, and given the industries and the business nature of ITC, it would be a good idea to move the structural design toward the D quadrant as well. That is, a matrix structure at the firm level would deliver the strategic focus on both efficiency and effectiveness of ITC. People management could also be potentially pushed toward the D quadrant as well. One practical solution could be that the Human Resource of ITC could help build the middle management team with specialized business degrees in ITC.

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