Assignment 2: End Term Report

On Northern Coalfield Ltd & Reliance Industries Ltd.

A report submitted to
Prof. Kirti Mishra

In partial fulfillment of the requirements of the course

Organizational Dynamics

By
Group D3

On
17-12-2018
Table of Contents

Reasons for choosing Northern Coalfield Ltd and Reliance Industries Ltd.

Our project report was based on a virtual research in which we selected two different

companies – Northern Coalfield Ltd and Reliance Industries Ltd. Both Northern Coalfield

Ltd (NCL) and Reliance Industries Ltd are the two different largest organizations of India

which deals in different sectors. NCL, a subsidiary of Coal India Ltd. (CIL) deals in coal

mining whereas Reliance Industries Ltd deals in different sectors of technology,

petrochemicals, refineries, textiles. The first-hand information was available for both of the

companies as three of our colleagues have worked previously in these organizations. Both the

organizations adopt a similar methodology in terms of operations and works on the similar

structural dimensions like high degree of formalization and centralization, administration and

delegation of authority to the top management of the organization. The information for both

the companies was available easily and as they are the two largest firms of our country,

therefore their structural dimensions and level of complexity was looked upon and carefully

analyzed.

Northern Coalfield Ltd.

(A) Method of Information collection

The data sources are mainly classified into two different categories:

1) Primary sources

2) Secondary Sources

Primary sources are the original sources of data. In this data source, the researcher has

himself / herself collected the data which was either previously not collected or available.
The information is collected through various methods like observation, interviewing, focus

groups and so forth. Secondary sources of data are the sources in which the data has been

previously collected, for example, annual reports.

For our Northern Coalfield Ltd. (NCL) project report we have used the secondary sources of

data which include Annual reports of the NCL, information available on the website of NCL

its main industry Coalfield India Ltd (CIL) website, and other useful documents which are

available on the internet. The data has been collated from various research articles.

References from the official statements given by organizationmanagers were also used during

data collection. Information related to budgets and methodologies have been taken from the

financial reports. The organizationis publicly listed in both National Stock Exchange and

Bombay Stock Exchange, so the reference of these reports can be considered as an authentic

source of information. Our focus was on collecting the qualitative data instead of quantitative

data.

For data collection there are two methods which have been broadly classified: direct method

and indirect method. For our research indirect methods of data collection was used where we

sourced information from the sources available on the internet. We didn’t go physically to the

organisation and didn’t interview the organization employees and other stakeholders for data

collection. Our main source of information relied on one of our colleagues who have worked

earlier in NCL. We used documents and articles available on the internet to analyse and draw

inferences about the organization, its working, structure and the potential problems and

opportunities.

We have used the below-mentioned data gathering methods in some form or the other:
 1) Expert Documents and Records: We also referred to a few research articles from

the internet and various other articles from newspaper websites. We could only use

only those sources of information which are widely available to the public.

2) Focus Groups: Amongst our group itself we have one member who has worked in

NCL before, so we used him and few of his colleagues from the organization to form

the focus group, and then we asked them about the various aspects of the organisation

based on their personal experiences.

3) Content Analysis: We analyzed various articles and reports available on the internet

to draw inferences and conclusions about the organisation structure, its working,

problems faced by the company due to the structure, potential solutions and so forth.

We also tried to draw inferences from the statements given by various administrative

members and other industry experts.

(B) Optimal solutions

Rigid Structure

The Area General Manager should not always be selected from the Mining department. From

all the production units an Area General Manager should be selected based on his or her

competency. This would ensure that there is fair decision making and not biased decision

making. In turn it would increase the collaboration among the different production units and

improving the efficiency of the whole company.

The government organizations create more hierarchal levels to create more jobs for people at

that newly created level and increase the number of roles in the existing hierarchal levels. The

action of the government organizations to increase job opportunities at the managerial level

which directly deals with the work force will decrease the span of control of each manager.

This decreased span of control will increase the efficiency of the manager to coordinate the
work force under him or her. This would also help him or her to communicate more easily

with the workforce, and dissemination of information also becomes much easier task. All of

this sum up to the increase in the efficiency of the company, thus earning more revenues and

or saving upon waste cost.

The area level should be granted a certain amount of autonomy so that it can take decisions

up to certain level. This would result in saving of the time which was previously wasted due

to the passing of information or decision through each hierarchal level before reaching the

concerned department. This would also refrain the other hierarchal levels to interfere with the

information passed.

The lower level employees should also be included in the decision-making process of the

company. This would give the company a much more accurate estimate of the situation

regarding which the decision has to be made. This would also enable the company to more

accurately forecast the consequences of the decision.

The high formalized structure of the company should change a bit and become a little more

flexible as it would enable all the employees of the company, especially the lower level

employees to try something different and new. This would improve the contribution of

innovation in the company, thus enabling the company to respond to the ever-changing

environment.

Seniority based promotion policies

Promotion that is driven by seniority is based on entitlement (P.Lahiri, 2016). Therefore,

people won’t focus much on learning new skills which will help them in their self-

improvement. To ensure transparency and fairness, the employees should be rewarded by

performance rather than seniority. This will promote a balance between the employees inside
the organisation. Healthy competition will be developing inside the organisation among the

employees if they are evaluated by their work. The performance-based reward system will

provide equal opportunities to all the employees irrespective of their years of service

provided. This will also eliminate the discrepancy which exists due to the performances of

employees and the work done by them. It will also help in promoting the right set of people

to the next level which will help in further growth and development of the organisation.

The performance-based system will assist in eliminating the politics between the employees

which may exist due to the priority that is given to seniority rather than work. The

performance-based system will motivate the employees to work harder. This will also help in

retaining them for a more extended period inside the organisation. This will also ensure that

the level of productivity won’t be diminished throughout and will promote the growth of

organisation. This system will help in increasing the efficiency of the employees and will

boost their morale which will encourage them more. Quantitative and qualitative

development in production will assist in the growth of organisation for a more extended

period. If performance-based system is promoted inside the organisation, then it will help in

inculcating a sense of accountability among the employees and within the organisation. Also,

this will help the employees to plan the path of their own careers within the organisation.

The current performance-based appraisal system can be modified to inculcate the behavioural

aspect of performance, which can be achieved through 360-degree feedback within the

organisation. This feedback system ensures that every employee will receive the feedback

about their performance from their managers, colleagues and supervisors. This also gives an

opportunity to an employee to evaluate his/her performance, achievements within the

organisation and their strengths/weakness (HumanResource). The feedback system if

implemented will ensure the fairness and accountability of the employees while evaluation of

performance. The responsibilities of employees will be evaluated by the upper management

based on their actual performance. Apart from the quantitative feedback, this system will also

help in judging the employee based on communication skills, relationships with peers and the

leadership skills. The feedback provided by other colleagues will help in establishing a

ground level for the relationship and cooperation with each other.

Although 360-degree feedback system is time taking due to the complexity of its nature and

for its efficiency more training is required. But on the other hand, it has more advantages as

compared to the disadvantages. The potential benefit of implementing a 360-degree feedback

system within the organisation is that it will provide a broad view about the employees’

performance. The peer evaluation will help in the self – development of an individual. And

individuals who do not consider themselves worth as others or undervalue themselves will be

self-motivated by the feedback provided and this will help them in self-improvement. More

transparent flow of information will be processed within the organisation as more number of

workers/employees will be contributing in performance appraisal process of an individual.

Knowledge Management

1) Online Platform: The Company can set up an online platform for the interaction of

different employees with each other. This system can include all the databases related to the

initiatives taken in different projects, the problems faced and how they were overcome, and

there can be databases shared by other companies also. This will boost the knowledge as well

as the confidence level of the employees as they will be assured that there might be someone

who may be facing the same kind of problem, and he/she might coordinate and solve that

problem together. Also, having a centralized database system will remove a certain level of

underutilization from the process as employees will not have to start every process from

scratch and, they can simply go to that platform, access the database and even if there is not
any information available related to that problem, they can simply start a thread and start the

discussion with other employees having knowledge and experience in same domain.

2) Regular seminars and meetings: Empirically, it has been found that if employees are

engaging with each other, not necessarily formally, then they are more willing to share and

learn from each other. If the company can bring together employees from different projects

and divisions at regular intervals, then it will lead to knowledge sharing as well as increase

the level of coordination. The company can also, invite people from other organizations to

conduct workshops and give speeches. In NCL, it has been found that the task assigned to

every employee is very rigid and the employee is not able to use his/her skillsets and

knowledge to refine that task. This rigidity in the process can be overcome by providing those

employees with opportunities to share their viewpoint with other employees, and if there is

the consensus that the process can be further refined, then the company can allow him to do

so.

Power and Politics

The Parent Company of NCL i.e. Coal India Limited should adopt the recruitment policy of

other Public Sector Units such as ONGC, IOCL, HPCL etc., which abandon the policy of

giving specialized treatment to premier Technical and Managerial Institution of the country

for executive level jobs and start recruiting the people for executive position from either

through the All India Level Open Exam or through internal promotion from non-executive

cadre to executive cadre. This scheme of recruitment will ensure the representation of people

at executive posts from various colleges across the country and end the biasness towards

some colleges. This Process of recruitment will also end the power and politics related to

caste and states.

The Company should adopt decentralized system of decision making in which the executives

at lower level, which are at the bottom level of hierarchy have a say. This can be achieved

through regular coordination meeting of executives of various departments with the Unit

Head as well as with the CMD in the presence of the department’s top-level executives. For

example, Let’s say employees of Excavation Department from all the 10 Production unit of

NCL should have a coordination meeting with the Excavation Department Head from all the

10 units bimonthly under the chairmanship of Chairman cum Managing Director (CMD) and

various Director of the company, which discusses the issues (can be personnel) face by the

employees and excavation department of various units as well as provide healthy discussions

and recommendation from the employees to the top Level executive. The Top-level

management should consider and incorporate the ideas presented by the employees in the

policy making and resolve the issues of the employees on real time basis. This incorporates a

sense of responsibility and commitment in the minds of employees, which drastically reduces

the bootlicking done by the employee.

The company should adopt a performance appraisal system which incorporates the behavioral

aspect in the appraisal system, which is discussed in detail in this report, as the current system

of appraisal is done through PRIDE rating which rates the employee based on quantitative

terms rather than qualitative terms. This provides fair chances to everyone in getting

production unit as well as job roles of their choices.

Countering low level of transparency and centralization

To counter this problem, the Systems Department at NCL must be upgraded and

restructured to handle more responsibilities. The immediate requirement is to create an online

portal, where all the key policy documents are available at one place. This portal will be used

by employees to make requests to other departments and hence obtaining information will
become much simpler and transparent. Further, a new committee can be created, which will

facilitate discussion on major policy decisions. This committee will directly report to the

Managing Director and would facilitate broad level discussions. For, efficient functioning of

the committee, a separate space would be allocated to the committee on the portal, to

facilitate communication and engage employees.

Also, there is no Grievance Redressal Cell for handling the issues faced by the employees,

despite it being an institutional requirement. Absence of Redressal Cell results in poor culture

and lowers employee motivation. Thus, it is important to create a special cell, which will

handle these special needs of the employees. This will further ensure transparency in the

system.

(C) Implementation strategy of the optimal solutions identified

One of the key problems identified in National Coalfields Ltd is the existence of rigid

structure. The interest of the company and the production unit can differ. The people in top

positions in the headquarters make decisions in the interest of the company.

As the Area General Manager is always selected from the Mining department, he or she can

be biased towards the Mining department. This can be detrimental for the functioning of the

company as this biasness can result in the arriving at decisions which are skewed towards the

benefit of his or her department. This can also lead to making of decisions which may affect

the efficiency and functioning of the other departments, which may also lead to inter-

departmental conflict. Due to such structure there is hesitation in sharing of crucial

information thus hindering free flow of information thus affecting the efficiency the company

can achieve.
Therefore, the policy/ criteria for selection of area manager in a unit of structure can be

created in much more transparent manner. The performance should be taken into

consideration while selecting an area manager. Also, the post should not be confined only to

the mining department but should be open for all the departments.

The performance-based appraisal system has more benefits as compared to the seniority-

based system. The problem within the organisation is that the ratings of an individual are

decided quantitatively only. For example: According to the current existing system in the

organisation, an employee working in the organisation must set target among the listed target

in various domain such as reducing the diesel consumption by 1000 litres. The target has

been set by the parent company i.e. Coal India Limited in the PRIDE Rating system. If the

employee achieves the target of 95%, then the Performance Related Pay (PRP) will be

adjusted in the salary according to the amount of target achieved. The factors like behaviour

with the other employees, quality of work done are not taken into consideration while

deciding the PRP. Therefore, both qualitative and quantitative parameters should be used

while deciding the performance of an employee. The 360-degree feedback system can be

implemented by giving an opportunity to all the employees to review and rate their peers

based on both qualitative and quantitative aspects. Initially, the system can be implemented at

a unit level and once successful can be gradually expanded to include other six divisions.

The knowledge management at Northern Coalfields Limited is not in a good form. The

employees at every level of this organization are unable to share their learning with other

people in the organization. Therefore, for a better knowledge management the standard

operating procedures that are being used for different process can be brought at a same place.

The technology used in the plants can be incorporated into a single document altogether.
Absence of Data Analytics Centre at NCL has long been a problem for the organization. To

implement it, the Director of the Data Analytics Centre can be instituted at the same level as

that of Directors from other departments. Boundary spanners from each department can be

identified which will be responsible for collecting the information and data from their

respective departments. These managers will be directly collaborating with the employees in

data analytics centre to ensure dissemination of initial information delivery and collation. The

centre will be responsible for data collection across departments and would be required to

generate insights from the collected data. The proposed data analytics centre would work in

close coordination with all the departments and would be directly under the supervision of

Managing Director.

(D) Feasibility Analysis

In an organization like NCL, the flow of information is very limited and is mostly from top to

bottom. Change agents at NCL are those in power and are usually the employees at the top

management level (Chairman-cum-Managing Director and Director of Individual

Department/Operations). Installing an information management system at firm level will

invite certain costs but will also bring more transparency in the system which in the long run

will benefit the firm. A detailed cost-benefit analysis could only reveal the actual importance

of implementing such a system.

Given the complexity of business due to extensive involvement of equipment, technology and

science, process improvement is the key to organizational effectiveness. Following are some

of the benefits that could be leveraged from use of data analytics:

1. Retention of employees: Proper allocation of projects to employees based on their

performance.
 2. Improved efficiency: Coal extraction process is highly complex and improvement in

efficiency at various stages of production can be achieved using data analytics.

3. Improved Logistics: Transportation is again one of the major costs in the business,

and data analytics can identify the areas of inefficiency.

4. Collaboration: Data analytics can be used to arrive at the root cause of the problem

and hence responsibilities can be assigned to different departments accordingly.

5. Business intelligence: Helps in identification of cost-drivers and hence improved

decision making

6. Safety and security: Data analytics can provide actionable insights into the safety of

employees and equipment.

Creating a separate Data Analytics Centre would be a challenge since it not only requires

procurement of software and tools to analyse data but, skilled personnel will be required to

manage and operate them. Thus, it would be a challenge for the HR department to recruit

skilled data scientists and analysts who can manage the centre effectively. However, this will

improve the operational and process efficiency of the firm in the long-term and hence will

improve profitability.

Since the current infrastructure is in place is only to facilitate the transfer of information from

one place to another only in the printed form and all the available storage is used to store the

files and folders. For setting up the infrastructure for Data Analysis or any other information

storage, we need huge amount of spaces to set up the servers, high speed connectivity to the

internet as well as investment in training the employees to use the online database for its

maximum utilization. But looking at the long- term effects of the present investment and

comparing the advantages with the other firms, we can say that it will be highly advantageous

in the long term and once the people are trained and infrastructure is in place, then company
can quickly transform from its current slow and tedious system to fast paced and highly

accessible system.

Reliance Industries Ltd.

(A) Method of Information collection

The sources of data can be classified into two categories:

1) Primary sources

2) Secondary Sources.

Primary sources are the original sources of data which means that the researcher has himself

/herself collected the data which was either previously not collected or not available. That is

the first-hand information collected through various methods like observation, interviewing,

and so forth. Secondary sources are the sources of data which have the previously collected

data, for example, annual reports.

For our Reliance Industries project report, we have used the secondary sources of data which

include Annual reports of the Reliance industries, various newspaper articles from The

Economic Times, The Times of India, Financial Express, The Business Standard, and others,

information available on the website of Reliance Industries and its subsidiaries’ websites,

other useful documents available on the internet. Additionally, we have collated the data from

the different research articles. We have also taken references from the various meetings and

official statements given by organization administrators. Budgetary information and

methodologies have been taken from the financial reports of Reliance Industries and different

contenders. As the organizationis publicly listed in both National Stock Exchange and

Bombay Stock Exchange, so these reports can be considered as an authentic source. We have

mostly focussed on collecting the qualitative data instead of quantitative data.

Broadly, there are two methods of data collection and assessment: direct method and indirect

method. We did our research using the indirect methods of data collection where we sourced

information from the sources available on the internet instead of physically going to the

organisation and interviewing their employees and other stakeholders. Our research did not

rely on any direct participation of the employees, but we did get some insights from two of

our colleagues who have earlier worked in Reliance Industries. We used documents and

articles available on the internet to analyse and draw inferences about the organization, its

working, structure and the potential problems and opportunities.

We have used the below-mentioned data gathering methods in some form or the other:

1) Expert Documents and Records: We referred to a number of documents available

on the website of Reliance Industries and its subsidiaries. We also referred to a few

research articles from the internet and various other articles from newspaper websites.

As most of the documents are company confidential, we could only use only those

sources which are available to the public.

2) Focus Groups: Amongst our group itself we have two members who have worked in

Reliance Industries before, so we used them and few of their former colleagues to

form the focus group, and then we asked them about the various aspects of the

organisation based on their personal experiences.

3) Telephonic Interviews: We also conducted telephonic interviews of the few

colleagues of our team members who are either currently working in Reliance

Industries or who worked there earlier.

4) Content Analysis: We analyzed various articles and reports available on the internet to

draw inferences and conclusions about the organisation structure, its working,

problems faced by the company due to the structure, potential solutions and so forth.
 We also tried to draw inferences from the statements given by various administrative

members and other industry experts.

(B) Solutions

1. Differentiation: High formalisation and standardisation in Reliance Industries Limited is

crucial because the company is in a safety intensive and hazardous industry, but these

stringent rules don’t have to be applied in each department. One solution can be to

differentiate each department and their subsequent divisions based on the level of

standardisation required. For example, office supply procurement division need not be that

standardised as compared to the petrochemical handling division.

2. Delegation and Coordination: High centralisation leads to the crisis of autonomy wherein

lower level management employees find themselves restricted and torn between following

the regulations stated and taking their own initiatives. To resolve this issue, successful

application of a decentralised organisational structure is required. To implement this, lower

level management, the employees that are responsible for the operations in the factory should

be given more authority and accordingly incentives such as bonuses should be

accommodated. Thus, this heightened level of motivation of managers at the lower level

improves the production efficiency of the factory. Thus, this phase brings a new period of

growth, but this independence can lead to breeding of parochial attitude. To avoid the crisis

of control that is when the higher-level management feels that the operations are been carried

by the lower level management without consulting with them, evolutionary phase of

coordination is implemented. In the coordination stage a middle level management is

employed to bridge the gap between the higher level and lower level management. In this

phase, technical functional units are kept centralised whereas the daily operational decisions

are decentralised to provide a perfect balance.

3. Collaboration: Due to high differentiation within the organisation, red tape crisis occurs

where there is lack of confidence between all the three management levels and everyone

criticises the bureaucratic system existing in the organisation. To reduce this crisis, the

collaboration of various departments and units is essential with room for skilful confrontation

of interpersonal differences. One of the ways to do so is by forming a matrix structure where

in divisional as well as functional structures are combined to capitalise upon the strengths of

both the structures. Formal structures can be broken down to from single multipurpose

systems to reduce the differentiation which will lead to quick problem solving through team

work.

4. Power and Politics: In a company as big as RIL, both power and politics play a significant

role in deciding the composition of the workforce. We have observed that people in top

management often use their coercive power to influence hiring and transfer decisions of low

level employees. They also decide on the compensation as well as the appraisal system of the

employees. This results in dissatisfaction among the employees as more often than not, an

employee who has good relations with his seniors, happens to reap the benefits despite whis

credentials and capability. This is also one of the major causes of high attrition rate in the

company. To resolve this issue, the administration should ensure that not too much power is

vested on a single individual or a group of individuals. They do have an online platform in

place where individual ratings are awarded to each employee by his/her immediate senior

(which is supposed to aid in determining the appraisal of that individual), but these comments

are overlooked almost every time and an individual’s performance rating comes down to his

relation with top management. Same thing happens as far as promotion or transfer of an

individual is concerned. So, steps should be taken to reduce the influence of top management

in deciding the appraisal/transfer/promotion of an employee, as these should be entirely based

on the performance and credibility of that individual and not on his ability
(C) Alternatives

An alternative solution to all the above-mentioned problems can be the implementation of

dual organisational structure, a habit structure and a reflective structure. A habit structure is

the one responsible for carrying out the daily operations, where in, it is properly defined who

is given what work, who comes under whose jurisdiction and who is responsible for which

project. The other structure is the reflective structure wherein the main aim is personal

enrichment of the employees and stimulating motivation and new perspective within them.

Employees are encouraged to switch between these structures at their own convenience to

increase their productivity and thus contribute more to the organisation. For example, if a

group of people can be assigned under the reflective structure to study and analyse the main

one or two operations of the company. They are then required to report their analysis within a

specified period to the top-level management, who in turn will then take decisions to work

upon the difference between what is aspired and what is the reality. This reflective structure

will thus improve the efficiency of the main habit structure while at the same time increase

employee satisfaction and job involvement.

(D) Implementation Strategy for optimal solutions identified

As we can see that in large organisations, by virtue of their large and rigid structure, decision

making in such organisations is often a very tedious task which takes a long time to complete.

For such highly formalized firms, the main reason is the standardization of the process for all

the items. This can be easily removed by reducing the amount of formalization. For example,

the number of products that are used in a firm can be divided into clusters based upon their

consumption patterns and then very loosely procedures can be defined for their procurement

so that various items can be differentiated, and daily work is not hampered.
One of the other significant problems in big firms is that of excessive centralization. The

concentration of decision-making power in one place often leads to the development of risk

centres in a firm. The risk is usually assigned to such centres due to which many the

implementing department or person gets away with mistakes due to which whole blame is put

on the decision-making group. The downside of such a strategy is that the abovementioned

group can become risk-averse in future and will not take any risk. The lack of risk-taking

ability in a firm is often detrimental for the firm as it closes the avenues of growth. To solve

the issue, the power should be decentralised in a firm so that there can better assignment of

accountability and responsibility amongst the employees. Due to this, the employees would

be sincerer and more attentive while doing their jobs and hence the loss due to such incidents

can be reduced. Assignment of accountability also ensures that the employees are giving their

best towards their jobs. It can also help reduce the amount of political behaviour that can be

detrimental for the firm. If the roles are assigned on the basis of merit and performance, then

efficient work quality can be expected from the employees. Also, if the employee feels that

his career is progressing due to such job assignment, the deviant workplace can be avoided in

the firm.

Sometimes the complexity of the structure in a large firm often creates confusion among the

employees. If this is left unchecked, then it can lead to a situation of total chaos which will

adversely affect the performance of the employees which in turn will bring the performance

output of the firm. One of the easy methods to make sure such a situation does not arise is to

segregate the firm into small segments, and full autonomy should be provided so that the

segments can be held accountable for the decisions they take, and risk can be properly

matched. Also, interference from the central team in the day to day matters of the segment

can be reduced using this method which in turn increases the independence of the individual

segments.
Power and politics also become a detrimental factor while judging the performance of a

company. Due to various types of political behaviour in different domains such as structural

change, Management succession and resource allocation, there is an unequitable allocation of

roles and responsibilities which might promote a negative behaviour towards other

employees and the firm as a whole. Such transgressions of power can be easily identified in

the early stages itself and can be solved without causing much damage to the system. Such

kind of situation can be easily seen where there are worker unions who are at odds with the

management of the firm at each and every decision. Such unions often create tough situation

for day to day working in the company. This situation is highly amplified when supervisory

employees are at a cross with non-supervisory employees who come under the tutelage of the

union. There are often different set of rules to judge the performance which creates tension

amongst the two groups. To avoid such situations, the yardsticks for judging the performance

of any employee be it supervisory or non-supervisory should be same coupled with a high

degree of transparency in the system which would ensure the trust of the employees in the

management of the firm.

(E) Embedding the solutions in Reliance Industries Limited

A certain degree of formalization is required for the smooth functioning of the organization

but a highly formalized structure could have negative consequences like the employees fail to

strive for autonomy, decline in competitiveness, hampers the productivity of the worker,

increases the operating cost and prices and leads to higher attrition rate. As the organizational

structure has high level of complexity due to large size of the organization, it increases the

degree of formalization in the practices that are being followed by the organization. To

reduce the amount of formalization, the organization needs to have a hybrid form of structure

i.e. matrix structure where it can implement the divisional structures as well as the functional
structures simultaneously. Based upon the consumption pattern of the different products used

in the firm, it can define a divisional structure.

Once the organization has defined a divisional structure, it can formulate a functional

structure across the multiple divisions to define the procedures and practices for each division

i.e. how various items are going to be procured in each division and the formal practices

which are going to be followed in a day to day working of the organization. The divisions

with high degree of repetitive work needs to have higher level of standardization as compared

to the divisions with less monotonous work. This implies that the divisions with high degree

of routine work would have high level of formalization as compared to other divisions where

they have non routine work. Hence implementing the matrix form of organizational structure

would help in reducing the formalization in the organizational up to a certain extent.

The firm faces the challenge of overlapping of jobs due to high complexity in the

organizational structure. Once the complexity of the structure is reduced, it would further

help in well defining the roles and responsibilities of the employees working in several

domains within a division. This would also help in minimising the confusion among the

employees related to the functionality of the job.

With the formulation of divisions and defining the functional structures for each division, it

would help in reducing the power centralization. The power of decision making would be

evenly distributed among each division. A decentralized structure would help in evenly

distributing the risk and responsibilities among several domains and the employees have a

say in the decision making process which makes them feel valuable. This would provide

autonomy for each division to work without the interference of the upper management and

they would be held accountable for the decisions they take and the process they follow. This
would further help in reducing the political behaviour among employees that could be

inimical for the organization.

To handle the situation arising due to the disagreement between management and worker

union, management should identify the nature of the employees who are part of the union and

could indirectly promote one of the employees for the union elections who seems to be a

good organization fit. The situation is highly amplified when it comes to the annual appraisal

or bonus policies as the non-supervisory employees feel that they are properly compensated

for the work they do. The supervisory and non-supervisory employees can’t be equally

compensated because of the different nature of the job but the firm can have a uniform

appraisal policy for all the employees e.g. a fixed increase in the employees’ compensation

based on their basic pay component of the salary.

(F) Feasibility Analysis

Strategy which is being currently followed by the company is not bringing out the best in the

employees. In an organization like Reliance, where innovation and time is the key for

success, high level of formalization can prove to be a hurdle and reduce the level of

efficiency of the employees. Centralization is in no way fruitful for lower level employees

who do not get their voices heard. So, RIL needs to reduce the level of formalization and

decentralize few of the power, which will increase the company’s effectiveness. It will help

in motivating the employees to work with ownership mindset. Misuse of power can also lead

to higher discontentment among the employees. Therefore, by limiting the concentration of

power, one can ensure well-being of the employees. All these steps can be implemented by

creating an internal team of qualified individuals who can formulate rules and procedures that

limit the involvement of higher management in day to day affairs. It will significantly

increase the cost for the organization initially, but the long term benefits it will reap in future
will more than outweigh these costs. An organization of the stature of RIL can definitely

incur such a small cost to ensure longevity. They can also choose to hire external

agencies/consultants who can do this job for them, but that would delay the implementation

as the externally hired professionals will take a lot of time to get abreast with the problems

currently plaguing the organization. In any case, RIL is bound to reap long term benefits as

there will be a significant increase in the level of employee satisfaction and considerable drop

in attrition rate.

Comparative Analysis

By comparing the structure and strategy employed by the two organizations, we can safely

conclude that the structure of an organization does not depend on the industry specifically.

Two companies, in different sector/industry, can have similar structure as long as they

employ similar strategies to achieve their goals. We can also observe that the problems faced

by the two companies are in many ways, similar in nature. Both the companies face problems

of high formalization and centralization. An argument can be put forth that industries which

are hazardous should have high degree of formalization and centralization, to ensure safety of

the employees/personnel. But these factors should not be too intense so as to impede the

growth of respective organizations. Hence, in both the cases, similar solutions on the lines of

delegation of authority may bear favourable consequences. Also, formalization of processes

should be restricted to the operational aspects of respective organizations and should not

extend to trivial processes like procurement of stationery items etc. Another aspect where

both the organizations appear similar is the excessive use of power and political tools by top

management to influence the promotion and appraisal decisions which often leads to

discontentment among employees, reducing their efficiency.

Having talked about the similarities regarding the nature of problems faced by these two

organizations and the prospective solutions, we would also like to highlight one major

difference between these organizations. Information sharing is very tedious as far as NCL is

considered. NCL does not have a knowledge sharing platform for its employees. Also, they

do not use much of IT infrastructure to aid in decision making. On the other hand, RIL has an

efficient knowledge sharing platform which also allows interacting with people from

different domains and locations. One can easily get hold of study materials, articles internal

to the organization and different SOPs/SMPs online and thus, does not have to rely on

external sources or individuals.

Bibliography

HumanResource. (n.d.). Retrieved from whatishumanresource.com:

http://www.whatishumanresource.com/360-degrees-performance-appraisal

P.Lahiri. (2016, September 30). Concept Research Foundation. Retrieved from

https://conceptresearchfoundation.com/2016/09/30/merit-or-seniority-better-criterion-

for-promotion/