Question

A company manufacturing sewing machines set up in 1945 by the British promoters follows formal organisation culture in totality. It is facing lot of problems in delays in decision-making. As the result it is not able to adapt to changing business environment. The work force is also not motivated since they cannot vent their grievances except through formal channels, which involve red tape. Employee turnover is high. Its market share is also declining due to changed circumstances and business environment.

Questions
You are to advise the company with regard to change it should bring about in its organisation structure to overcome the problems faced by it. Give reasons in terms of benefits it will derive from the changes suggested by you. In which sectors can the company diversify keeping in mind the declining market for the product the company is manufacturing?

Answer 1

The major change that is required to correct the situation is to move away from a complete formal organisation structure and allow for some informal structure. An informal structure is a network of social relationships that arise out of personal interactions among employees of an organisation beyond their officially defined roles.

An informal structure would benefit the organisation in the following manner.

1. As no definite path or channel of communication is followed, information spreads faster.
2. An informal organisation allows for personal communication beyond the officially defined roles. This unofficial interaction provides a sense of belongingness among the employees towards the organisation and towards each other. This helps in lowering the employee turnover.
3. An informal organisation supports the working of formal organisation, thereby helps in fulfilment of organisational objectives in a better manner.

The company can diversify in other sewing related products as better and technologically advanced sewing machines, machines with advance features such as embroidery.