Passage : The Software Giant -Wipro Technology

On the basis of the following passage, answer the Q. No. 46 to Q. No. 50.

It's not quite there yet, but the goal is certainly within reach. One of India's largest IT solutions providers, Wipro Technologies, is taking on the likes of IBM and Accenture in its effort to be included among the largest and most successful technology services companies in the world. Restructuring Wipro was considered the most important step in becoming a global giant, driven by the goal towards improved customer orientation. During the past few months, Wipro separated itself into several subsidiaries by product line: telecommunications, engineering, financial services, etc. Each subsidiary brings in about $300 million in annual earnings and is self-sufficient with their own accounting books, personnel and administrative functions. This policy of company reduces the workload as well as enhances productivity because of the specific workers performing a specific job on a regular basis. Such a practice at Wipro further resulted in avoidance of duplication of work helps in preventing confusion and minimising the wastage of efforts.Wipro shifted from a centralised to decentralised management system. All responsibilities for growth lay with the management of each entity. "We tried to de-layer the organisation and empower our business leaders with a much higher degree of growth responsibility," said Premji. This practice gives the employee requisite time to explore areas for growth and the opportunity to innovate thereby strengthening the company's competitive position. The authority dispersal develops in the subordinate the ability to deal effectively with challenges and helps them to realise their full potential.

"Wipro separated itself into several subsidiaries by product line: telecommunications, engineering, financial services, etc".

On the basis of the aforesaid statement, identify the organizational structure which is best suited for the company?

Divisional Structure

The correct answer is option 1- Divisional Structure.

Divisional Structure is best suited for the company.

The passage mentions that 'Wipro separated itself into several subsidiaries by product line such as telecommunications, engineering, and financial services.' This is a clear example of a Divisional Structure, where the organization is divided based on products, services, or markets. Each division operates semi-independently and has its own resources like accounting, personnel, and administration.

In a divisional structure, the organisation structure comprises of separate business units or divisions. Each unit has a divisional manager responsible for performance and who has authority over the unit. Divisional structure is suitable for those business enterprises where a large variety of products are manufactured using different productive resources. When an organization grows and needs to add more employees, create more departments and introduce new levels of management, it will decide to adopt a divisional structure.