Read the passage and answer the following questions.

Since its inception, ONGC has been instrumental in transforming the country’s limited upstream sector into a large viable playing field, with its activities spread throughout India and significantly in overseas territories. The 1990s had begun on a grim note for ONGC. It took almost a decade for the Corporation to sort things out in most uncertain of times. Among many problems, the Corporation was also suffering from the organizational atrophy. In order to survive ONGC sought help from Mc Kinsey. Mc Kinsey’s mandate was to evolve an organizational structure that was far more responsive to its business needs than that based on business groups. The ONGC system run by functional heads often meant delays exceeding a year in matters requiring urgent decisions on fields. Also, since responsibilities were shared at production platforms between different business groups, the system degenerated into wrangling over responsibilities. Similarly, group loyalties often took precedence over the requirements of tasks. But, most importantly, it was found that the performance evaluation criteria based on business group yardstick were completely at loggerheads with requirements on fields. Mc Kinsey recommended an asset-based approach with clearly defined responsibilities in its presentation titled ‘Organization Transformation Project’ Though Mc Kinsey recommendations were broadly accepted, coordination issues concerning commonly shared services needed to be sorted out. Finally, the first control over all service personnel working with asset teams was vested in asset managers, on grounds that being responsible for the performance of their strategic business units they must rightfully exercise control over all personnel working with them. Even procurement powers were devolved. Finally, a new structure made up of 14 assets and 11 centralized services was rolled out. 

Which of the following statement is true?

A proper organization structure is essential to ensure a smooth flow of communication in an enterprise

The correct answer is option 3- A proper organization structure is essential to ensure a smooth flow of communication in an enterprise.

• Organisation structure is the outcome of the organising process. An effective structure will result in increased profitability of the enterprise.
• A proper organisation structure is essential to ensure a smooth flow of communication and better control over the operations of a business enterprise.
• The type of structure adopted by an organization will vary with the nature and types of activities performed by an organization. The organizational structure can be classified under two categories which are functional and divisional structure.