Question

Aradhana and Gandharv are heads of two different departments in 'Yumco Ltd.' They are efficient managers and are able to motivate the employees of their respective departments to improve performance. However, their drive to excel in their own sphere of activity instead of giving emphasis on objectives of the enterprise has hindered the interaction between the departments that Aradhana and Gandharv are heading. Often there are inter-departmental conflicts and they have become incompatible. This has proved to be harmful in the fulfilment of the organisational objectives. The situation has deteriorated to such an extent that the CEO of 'Yumco Ltd.' has hired a consultant, Rashmi, to resolve the problem. After studying the situation closely Rashmi found that the problem has arisen due to inflexibility and a narrow perspective on the part of both Aradhana and Gandharv. She is of the view that this situation is a result of the type of organisational structure 'Yumco Ltd.' has adopted.

From the above information, identify the organisational structure adopted by Tumco Ltd.' and state any three advantages of the structure so identified.

Answer 1

Organisational structure adopted by Yumco Ltd. Is 'Functional Organisational' Structure.

Three advantages of this structure are as follows:

Advantages:

(i) Specialization: A functional structure that leads to occupational specialisation since emphasis is placed on specific functions.

(ii) Efficiency: It helps in increasing managerial and operational efficiency and this results in increased profit.

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