Introduction to Management (MB111) : Section C (Answers)

8. Various forms of organizational structures include:
1. Functional structure
2. Product structure
3. Territorial structure
4. Process structure
5. Customer structure
Functional structure: In this structure, the units are organized around functions such as operations, finance,
marketing, HR, etc.
Advantages:
􀂃 Specialization
􀂃 Ensuring performance of activities necessary for the achievement of organizational objectives
􀂃 Elimination of unnecessary activities
􀂃 Easier control over functions
Disadvantages
􀂃 Lack of responsibility for the end results
􀂃 Overspecialization and consequently lack of general management point of view,
􀂃 Problems of conflicts and coordination among functional departments.
Product structure: In this structure, all activities necessary to produce a product or product line are grouped into
one department.
Advantages:
􀂃 More attention to product lines
􀂃 Better coordination between different product teams
􀂃 Opportunities for further diversification and expansion of the organization
􀂃 Product specialization
Disadvantages:
􀂃 Problems of coordination at top level
􀂃 Multiplicity of efforts due to duplication of functional activities in different product units
􀂃 Problem in maintaining economical central staff services.
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9. Every group of people that attains its goal or that performs efficiently has some person as its head who is skilled in
the art of leadership. This skill comprises four major elements: (1) the ability to use power effectively and in a
responsible manner, (2) the ability to comprehend that people are motivated by different forces at different times
and different situations, (3) the ability to inspire, and (4) the ability to act in a manner that will develop a climate
conducive to responding to and arousing motivations.
In order to be successful in his new role as the Branch Manager, Subodh needs to understand the significance of
these four elements as detailed below.
The first element of leadership is power. It is the control a person possesses and can exercise on others. In other
words, power is the capacity to affect the behavior of others. Leaders in organizations typically rely on some or all
of the six major types of power viz. coercive, reward, legitimate, expert, referent, and information power.
The second element of leadership is a fundamental understanding of people. Having an understanding of
motivation theory, kinds of motivation forces, and the nature of a system of motivation is not sufficient; one must
also be able to apply this knowledge to people and situations. A leader who understands the elements of
motivation is more aware of the nature and strengths of human needs and is better able to define and design ways
of satisfying them and to administer so as to get the desired responses.
The third element of leadership is the ability to inspire followers to apply their full capabilities to a task. While
the use of motivators is centered on subordinates and their needs, inspiration also comes from group heads. They
may have qualities of charm and appeal that give rise to loyalty, devotion, and a strong desire on the part of the
followers to promote what leaders want. This is not matter of need satisfaction, but essentially a matter of people
giving unselfish support to a chosen champion.
The fourth element of leadership has to do with the style of the leader and the climate he or she develops. The
strength of motivation greatly depends on expectancies, perceived rewards, the task to be done, and other factors
that are part of an environment, or organizational climate. Almost every ole in an organized enterprise is made
more productive for the enterprise and more satisfying for the participants by those who can help others fulfill their
desire for such things as status, power, money, and pride of accomplishment.