Question

A company manufacturing sewing machines set up in 1946 follows formal organisation structure. It is facing lot of problems such as delays in decision-making. As a result it is not able to adapt to the changing business environment. The work force is also not motivated. There is a problem of red-tapism and employees' turnover is very high.
You 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 sector can the company diversify keeping in mind the declining market for the product the company is manufacturing.

Answer 1

The advice to the company is - to give due importance to informal organisational structure along with formal. They should allow informal structure also to develop. This will help company to overcome the problems of delay in decisions, lack of motivation, etc. As information travel very fast in informal organisational structure. The company may get following benefits with informal organisational structure. Explain the advantages of informal structure
1. Fast communication : Informal structure does not follow scalar chain so there can be faster spread of communication.
2. Fulfills social needs : Informal communication gives due importance to psychological and social need of employees which motivate the employees.
Company can diversify its activities by introducing embroidery machines, it can also design special machines keeping in mind the requirement of ready-made garment manufacturers, etc. By diversifying in the same field it can get maximum utilization of existing resources only.