OB Report _ Section A_Organicv vs Mechanistic

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Comparative

study ofOrganic and

Mechanistic

structures-A

Report

Organizational Behaviour II

– Presentation Report

Submitted by:

Rohit Krishnan-14PGP041

Rajesh Jangam-14PGP034

Sravana Kumar-14PGP045

Somal Kant-14PGP043

Sounak Saha-14PGP044



Organic vs. Mechanistic model of

Organizational Structure

Mechanistic model focuses on individual specialization where employees work separately (silo based

approach) and specialize in one particular task and are required to limit their work to their own task and

not to get into other people's work in the same organisation. Here the hierarchy of authority is very well

defined which makes the integrating mechanisms very simple and the scope of questioning someone

senior to oneself is not encouraged and virtually non- existent. The decision making is kept top down

and thus is very high, making communication vertical in nature. It is the seniors who lay down the

policies and the juniors have to abide by them rather strictly which makes deviation from rules virtually

impossible. Hence the structure is more centralized in nature. There is extensive use of Standard

operating procedures and rules and regulations are to be strictly adhered to which makes the

organisation highly standardized akin to a bureaucratic way of working. Most of the communication is

done using written mode and thus verbal communication has very less significance in such model. The

status of a person in such an organisation is determined by the position or rank he holds in the

organisation which is a manifestation of the hierarchical nature of such model. The organisation is seen

as a network of various departments working separately to achieve their objectives. Innovation is very

difficult in such model. IBM is one such example of an organisation.

In an organic model, employees are known to work as a team and there is immense coordination among

the team members to achieve their objectives which can be defined as joint specialization. In this

model, various team interact with various other teams to complete a task which makes it a complex

integrating mechanism. It has a decentralized way of working in which tasks are delegated to team

members and the freedom to take decisions is very much there with the team and the communication

in such model is lateral in nature which makes it easier for different teams to communicate with each

other. Here the work process is unpredictable and thus there is lot of room for innovation as team

members are allowed to think freely without any hindrance. There is lot of mutual adjustment among

team members and they are more accommodating in nature. Most of the communication occurs in

verbal form, thus saving a lot of time and decision making is very quick in nature. In this model, an

employee's performance and brilliance determines his status in the organization. This model is anetwork of various teams working together to achieve a common goal and thus the silo based approach

is avoided. Google is an example of an organic model.



Google - A few wordsGoogle – a company worth billions which made its way into the oxford dictionary is one of the most

innovative companies on earth. Founded in 1998 by Larry Page and Sergey Brin, Google has been

disrupting the world of technology. According to Fortune business magazine, it’s the fourth-most

admired company in the US. It is also listed as the top company to work for in both 2007 and 2008.

Innovation & creativity are the key elements of Google’s success. The company’s organizational culture

plays a vital role in driving innovation. For a company to be continuously innovative the workforce needs

to be motivated and Google’s culture exactly does the same. It helps the company retain its employees

&attracts the best talent available in the industry. It’s known for its unconventional organizational

culture, which is designed to encourage both loyalty and creativity.

This emphasis on innovation has resulted in the development of numerous path breaking products such

as the Google search engine, Google Maps and the Google Chrome Web browser.

The Leadership Structure

Google’s corporate structure cannot be particularly categorized as an organic structure or a mechanistic

structure. It is a mix of few standard models customized to suit the company. Primarily Google follows a

flat organization structure and employees are more autonomous.



Unique leadership positions: A few unique leadership positions are a part of Google’s structure, such as

CCO(Chief Culture Officer) and CIE(Chief Internet Evangelist).

Wide spans of control: Multiple departments (Engineering, Product, Sales, Legal& Finance) report to the

same unit with few layers of hierarchy in between.

Minimal Bureaucracy: Bureaucracy is at it its minimum in google.

Promotes corporate transparency - Employees are able to witness and contribute to the leadership

function

The 70/20 /10 Rule

Google advocates the “70-20-10 rule” encourages the employees to take risks and be creative.

70% of time in office to official projects assigned by management

20 % of time in office to new projects or ideas related to their coreprojects

10 % of time in office to any new ideas they want to pursue regardless

of what they might be.



Criticism:

Critics such as Gene Munster from the Piper Jaffray Investment Bank charge that most of the products

that were built from the ideas generated from employees have not produced any substantial new

revenue.

If the projects are successful the employees leave the company to start their own business

No Formalized control structures

Google follows quite informal approach and encourage employees to communicate openly without any

restriction. The top management is quite

approachable and no formal channels or

restrictions apply.

Open communication policy - Encourages

employees and managers to work directly with

each other, instead of through more formal

channels.

Cross-functional approach: Google supports cross

functional management. There are no restricted

departments, every employee has the freedom to

work, discuss with any other department of team.This promotes open work culture and free flow of information. No rigid departmentalization is in place.

Ratings & KRA: On contrary to many organizations goal setting is done by employees themselves and

not the supervisors.

Accountability: Employees are more accountable to themselves than to the management.

Flexibility: Employees have flexible work timings and are free to avail benefits when they work during

odd hours.

Functions

Employees are allowed to change the parameters

of their jobs when needed.

No specific job roles are assigned to the

employees. They are encouraged to develop



multifunctional skills and are free to work on any new technology.

Instead of departmental silos, employees are advised to choose the projects of their interest.

This promotes interest in the employees and this assures them career growth and work satisfaction.

Most of the employees in other organization complain about working in some uninteresting domain

which in turn leads to low productivity and less loyal employee.

Culture

Employee retention is an important for a company like Google. So it spends a good amount of revenue

of wellness of the employee.

Google provides a lot of perks to the employees aimed at creating a fun and creative

atmosphere.

They receive free food cooked by the company chefs and .

They are provided with bus rides to work and are allowed to travel through the building on

scooters and bicycles.

They also have access to company daycare facilities, exercise gyms and other amenities.

Google also offers stock plans and higher wages compared to other companies

Google’s Motto

Don't Be Evil: Unofficially Google’s motto is not to be evil and all of its corporate policies and decisions

are based on this and Google always tries to live up to this motto.

In a highly competitive business environment it may seem eccentric to pursue such an approach but this

approach has been the reason for Google’s enormous success and excellent employee retention. The

employees report feeling very differently about working at Google as opposed to other companies.

According to a New York Times article from 2005, Google employees interviewed said that they felt a

sense of being personally invested in the company's sense of mission and future success. There is no

wonder Google is consistently ranked among the top 5 best companies to work in US.



IBM Introduction:

The International Business Machines Corporation (IBM) is an American multinational

innovation and counseling company, with home office in Armonk, New York, United States.

IBM makes designs and markets all sorts of computer hardware and software programming, and

also offers foundation, facilitating and counseling administrations in zones going from

centralized server machines to nanotechnology.

The organization was established in 1911 as the CTR Company (Computing Tabulating

Recording) through a merger of three organizations: the International Time Recording Company,

the Tabulating Machine Company, and the Computing Scale Company. CTR renamed to the

name International Business Machines in 1924, utilizing a name formerly assigned to CTR's

auxiliary in Canada and later South America. Securities investigators nicknamed IBM Big Blue

in identification of IBM's basic utilization of blue in items, bundling, and logo.

In 2012, Fortune positioned IBM the No. 2 biggest U.S. firm in number of representatives

(435,000 around the world), the No. 4 biggest as far as business promotion, the No. 9 most

productive, and the No. 19 biggest firm as far as income. All around, the organization was

positioned the No. 31 biggest as far as income by Forbes for 2011. Different rankings for

2011/2012 incorporate No. 1 organization for pioneers (Fortune), No. 1 green organization

around the world (Newsweek), No. 2 best worldwide brand (Interbrand), No. 2 most regarded

organization (Barron's), No. 5 most appreciated organization (Fortune), and No. 18 most

imaginative organization (Fast Company).

IBM has 12 exploration research facilities overall and, starting 2013, has held the record for most

licenses produced by an organization for 20 back to back years. Its workers have accumulated

five Nobel Prizes, ten National Medals of Technology, six Turing Awards and five National

Medals of Science. Outstanding creations by IBM incorporate the robotized teller machine

(ATM), the floppy circle, the hard plate drive, the attractive stripe card, the social database, the

Universal Product Code (UPC), the monetary swap, the RDBMS and SQL, SABER carrier

reservation framework, DRAM, and Watson computerized reasoning.

The organization has experienced a few authoritative changes following its initiation, obtaining

organizations, for example, Kenexa (2012) and SPSS (2009) and associations, for example,

Pwc's counseling business (2002), turning off organizations like Lexmark (1991), and auctioning

off product offerings like its PC and server organizations to Lenovo (2005, 2014).



The Early IBM Organizational Structure

During the late 1980s and early 1990s, IBM began to slip as a global powerhouse. Their complex

organizational structure resulted in lot of red tape. In early days IBM followed extremely

hierarchal structure. Though this provided good returns in early days, they did not change with

the changing globalization. That resulted in a huge dip in their revenues.



Formalization

With this rigid structure at IBM employees followed instructions that were passed down from the

top management. Company also maintained a corporate constitution and all employees were

expected to follow rules and regulations to the letter. A dark (or gray) suit, white shirt, and a

"sincere" tie was the public uniform for IBM employees for most of the 20th century.

Excessive formalization and lack of flexibility eventually led to the fall of IBM

Specialization:

At IBM Departments work as Silos. Employees specialized in particular jobs were placed into

those particular departments. And lack of innovation and flexibility- led to emergence of

Microsoft as a player which uprooted IBM from its perch at the top. At IBM departments used to



work independent of each other and poor coordination between departments- rivalry within the

organization cost them really lot.

IBM in Recent Days

Today IBM is more of a learning organization where obtaining information and changing

conduct as an after effect of the recently obtained learning, is a piece of an organization’s

outline. It is one where gaining learning and changing conduct as a consequence of the recently

picked up information are a piece of an association's outline. In these structures, testing, adapting

new things, and thinking about new learning are the standards. Meanwhile, there are numerous

strategies and frameworks set up that encourage learning at the authoritative levels. In learning

associations, experimentation and testing possibly better operational techniques are energized.

This is genuine because of the method for recognizing future open doors. At IBM Corporation,

this is attained by taking very fruitful business directors and placing them responsible for

developing Emerging Business Opportunities (EBOs). IBM is an organization that has no trouble

concocting new thoughts, as confirm by the quantity of licenses it holds. Yet commercializing

these thoughts has been an issue previously, owing to an accentuation on fleeting results. To

change this circumstance, the organization started exploring different avenues regarding the

thought of EBOs.

Documents

OB Report _ Section A_Organicv vs Mechanistic