Question

Malini and Shalini recently completed their web designing course from a reputed University in Mumbai. Malini opened her own website development company, ‘Rapid Software Private Limited.’ In order to ensure a smooth flow of communication and better control over the operations of her business, she divided the entire work of a company into four departments i.e web designing, accounting, research and development, and customer service. All departments are required to report to a coordinating head. The company became successful in the market as all operations were carried out with a high degree of specialisation. Shalini joined a big group named Babylon.com, Inc., which offered a variety of services like Babylon Web Services, Babylon Prime, and Babylon Retail. She was appointed as the head of the Babylon Web Services division and was made responsible for the profit or loss of her service division. She was happy to take the responsibility, as the division would function as an autonomous unit, thus enabling her to make faster decisions.

1. Identify the types of the framework within which managerial and operating tasks are performed in the organisations, of which Malini and Shalini were a part of.
2. Give any four differences between the frameworks identified above.

Answer 1

1. The types of framework highlighted are functional structure and divisional structure.

2. Basis	Functional Structure	Divisional Structure
   Formation	It is formed on the basis of functions.	It is formed on the basis of product lines supported by functions.
   Specialisation	It provides functional specialisation.	It provides product specialisation.
   Responsibility	It is difficult to fix responsibility in this structure.	It is easy to fix responsibility for performance.
   Managerial Development	Difficult, as each functional manager has to report to the top management.	Easier autonomy, as well as the chance to perform multiple functions, helps in managerial development.
   Cost	Functions are not duplicated, hence economical.	Duplication of resources in various departments is costly.
   Coordination	Difficult for a multiproduct company.	Easy, because all functions related to a particular product are integrated in one department.