In Vega Ltd., the finance, production and marketing departments each have their own objectives, policies and style of working. Each department works in isolation from the others, and the barriers between the departments are becoming more rigid.
What is the likely result, and which point of importance of coordination does it bring out?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Conflicts arise between the departments; this shows the importance of coordination due to functional differentiation.
Option (1) Individual goals clash with organisational goals; this shows the importance of coordination due to growth in size. — Incorrect. Growth in size is about matching the personal goals of many employees with organisational goals. The case shows clashes between departments.
Option (2) Conflicts arise between the departments; this shows the importance of coordination due to specialisation. — Incorrect. Specialisation is about experts who refuse advice from others in their own field. Here the clash comes from departments with their own objectives, policies and style of working.
Option (3) Individual goals clash with organisational goals; this shows the importance of coordination due to functional differentiation. — Incorrect. The clash is between departments, not between personal and organisational goals.
Option (4) Conflicts arise between the departments; this shows the importance of coordination due to functional differentiation. — Correct. Departments with their own objectives, policies and style show functional differentiation. Working in isolation behind rigid barriers, they come into conflict.
NCERT (2026-27 Edition): “(ii) Functional differentiation: Functions of an organisation are divided into departments, divisions and sections. In an organisation there may be separate departments of finance, production, marketing or human resources. All these departments may have their own objectives, policies and their own style of working. For example, the marketing department’s objective may be to increase sales by 10 per cent by offering discounts. But, the finance department may not approve of such discounts as it means loss of revenue. These kinds of conflict arise in organisations because each unit/ department is performing activities in isolation from others and barriers between departments are becoming more rigid. However, all departments and individuals are interdependent and they have to depend on each other for information to perform their activities. The activity of each department needs to be focused on attainment of common organisational goals. The process of linking the activities of various departments is accomplished by coordination.” |