Ever organization is structured in its own unique way, depending on its needs and goals. A wide range of structures are utilized today. One of the traditional and oldest structures is a functional structure. Under this structure, individuals with similar jobs and skill-set are grouped into productive units that employ a hierarchical reporting system. Functional organizational structure therefore organizes the activities of an organization or a business around areas of specialization. The functional organization is a dominant mode of organization in major companies; since they deal with large production and sales volumes that o other type of organization structure would be nearly as efficient.
Suzlon Group is one of the companies that deploy a functional organization structure. It is ranked among the world's top five largest wind turbine suppliers - that is in terms of its cumulative installed capacity at the end of 2011. It extends its market to Australia, Europe, Africa and Asia. The company's headquarters is at Suzlon One Earth in Pune, India.
suzlon's organization structure
Suzlon is one of the leadind services and wind power products company with a global outfit. The major principle shaping the organization's structure across all the global operations is to increase the pace and flexibility in decision-making and execution, while at the same time empowering managers.
Suzlon is organized into four broad function areas. These are:
Corporate Services
Manufacturing
Business Units
Research & Development.
corporate services
The corporate office is based in Pune, India. It seeks to enhance Suzlon's pre-eminent niche in the wind energy industry in line with their core values of accountability, equity and environmental responsibility. Their core corporate services include: managing issues of control and governance, monitoring performance of various regions, formulate the best practices to be adhered to across all offices and the provision of shared services - finance, infrastructure, human resources, legal among others.
manufacturing
There are 13 major manufacturing facilities spread across five countries: India, USA, Portugal, Germany and China. These facilities make a variety of rotor blades, control panels, generators, hubs, and tubular towers. All these cover the key components of wind turbines.
business units
Suzlon is divided into five regions: Brazil, China, North America, India, Europe and rest of Africa. Each of these regions is headed by a CEO. The unit handles all the business needs for that region. All the CEOs report to the Corporate Headquarters.
research and development
Suzlon has sophisticated research and development capabilities in the wind energy space. This has led to actualization of a comprehensive product portfolio that ranges from 600 kW to 2.1 MW wind turbines. The company focuses on doublingthe energy yield of its wind turbines at a certain rate by improving aerodynamics and applying larger rotors. Suzlon believes that technology is a crucial enabler of its market lead.
comparison with other organizational structures
Functional Vs Product Divisional Structure
CONTRAST
Poor Accountability in Functional Organization - This is brought about by the weak link between product and the functional units. It is extremely difficult to relate profits of specific products to the budget and expenditure of individual units. Units such as IT and Human resources support other functional units but do not contribute in a direct fashion to the revenue yet they are key units that help the organization function.
Clear Accountability in Product Division Structure - The structuring along the product lines provides a clear relation between the profit of the individual divisions and the expenses.
COMPARISON
Skills Development - Product division structure enables broader skills development. Collaboration between various specializations provides employees with vast skills beyond their area of specialization.
Functional organization cultivates specialists. It promotes career development of individuals who want to be technical specialists of their area in larger organizations. It makes it easier for one to climb the hierarchical ladder.
Functional Vs matrix Structure
The matrix structure extends the functional structure by grouping employees by both function and product offering. The matrix therefore superimposes the product structure over the functional structure. This results into a dual line of authority that is moderated by the top managers. Its advantage is that it enables better communication between functional groups. Its disadvantages are that it is hard to manage and the roles and authority in this structure tend to ambiguous.
how organizational functions influence the structure
ORGANIZATIONAL STRUCTURE AND HUMAN RESOURCE MANAGEMENT
One of the major challenges facing companies is determining how their staff will be organized. In Suzlon's case the tasks is even more complex since the company does business across national borders. As the company expanded across national borders, it was useful to explicitly look at how tasks are allocated across employees in a systematicfashion. As Suzlongrew larger, it was necessary to organize it into departments based on their functions. This led to the functional organization deployment. In Suzlon's case the human resources function is under the Company's corporate services as a shared service
As Suzlon extended its operations overseas, an additional complexity arisedasdecisions made had to address global and local product design, responsiveness to the local markets, cross-border financing etc. This is the reason why Suzlon had to introduce business units across all the five region, with each headed by its own CEO.
With these business units in place, the company can better handle current international business demands and improve the company's position so as to take full advantage of international business opportunities as they arise.
In many organizations, the main source of expertise is functionally based. The economies of scale can therefore be realized by assembling these resources by function. For instance the central human resource function (under corporate services) acts as a consultant to all other units of the organization on issues such as performance appraisal and pay
how the functional organization structure suits organization needs
Maximizes Functional Performance-All the human expertise, knowledge, skills and infrastructure required for a certain functional activity are assembled into a single sub-organization. This enables the sharing of valuable expertise by seniors and their juniors. These functional units are managed and headed by leaders who have vast in-depth knowledge and experience. They are in a position to control the organization effectively. This is important to Suzlon as it requires experts manage huge manufacturing projects and complete them successfully Chances are that if an experienced, skilled manager takes control of a project it will be a success as compared to an individual with no experience.
Cultivates Experts and Specialists - This structure promotes the career development of employees- it enables them become technical experts in their fields within the organization. This is important to the company as it will improve the quality of the products it manufactures. The employees can also rise up the corporate ladder easily.
Stable Environment - Since Suzlon operates in rather stable environments, the functional organization best suits it. The company has certain routine technologies and there exists less probability of competitive technologies that are radically different, thus functional units are effective in this case.
refrences
Suriyan Group Power Industries ::. (n.d.). Retrieved from http://suriyangrouppowerindustries.com/
Suriyan Group Power Industries ::. (n.d.). Retrieved from http://suriyangrouppowerindustries.com/
International business for entrepreneurs: Organizational ... (n.d.). Retrieved from http://cnx.org/content/m35610/latest/
