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1.
Perception of the environment
– It is worthwhile to take a deeper look into theenvironmental factors that severely affect the organization due to its closeentanglement with various issues. The political is probably the most unstable factor asthe government decides to continuously slash tax rates on various commodities andthe debate rages on the approval of FDI in the automobile sector.The economic scenario has been highly volatile with easy availability of finance,incentives from the government, policies and duties and taxes. The technologicalfactor deeply affects the organization as this is a highly technically influenced productand has a direct effect on the productivity of the firm and its workers. In the legalenvironment, the country has relatively high import duties and has a weighted taxreduction of upto 150% on in-house RnD activities.
2.
Choice of Strategy
- The strategy includes to counter increasing competition andfalling market share in the small car segment, increase yearly manufacturing capacity, build new research and development facility, increase annual production capacity totwo million mark in five years, setting a precedent for automakers countrywide andincreasing penetration in the rural segment are some of the strategies adopted by theorganization.
3.
Selection of technology
- In order to face the onslaught of increasing competitionmanagers today look for ways to use information technology as a strategic weapon togain advantage over their competitors. Today various systems have begun to mergeinto an overall information technology system that can be used as a strategic weapon.Applications such as extranets, e-commerce, and network structures redefine andsupport relationships with customers, suppliers and other organizations.
4.
Growth of size
– The size of the company has grown manifold in the last few yearsowing to the surge in demand of the product across the country and also the demandin international markets.
5.
Distribution of power and control – The power and span of control becomes a veryinteresting dimension in Maruti because most of the posts are functional in nature. If we look at the Section Manager in some department, then there might be 4-8 peopleof different levels directly reporting to him without any level-wise hierarchy amongstthemselves. The span of control is generally in the order of 3~6 at the topmanagement level, 4~8 at the middle management level, and 0-5 at lower management levels (other than production).
Structural elements:-
1.
Specialization
- The functional structure and further division of labor makes highdegree of specialization in Maruti.
2.
Centralization
- It is a moderately centralized organization where power is distributedwithin the hierarchy and each person has more or less specific roles.
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3.
Formalization
- Formalization is very high, all the operation procedures, standards,methods, instructions are written down formally. Apart from the company-wide procedures, all departments have their department procedures. These DepartmentProcedures define the scope of work for the department as well as the roles andresponsibilities and work flows.
4.
Span of control
- The span of control is generally in the order of 3-6 at the topmanagement level, 4-8 at the middle management level, and 0-5 at lower managementlevels (other than production). In production departments, the span of control at lower management level goes up to 40-50, as those many workers and technicians directlyreport to a line supervisor/ shift in-charge.
5.
Complexity
- Structural complexities arise because of goal incompatibility betweenthe various departments like Engineering, Quality, and Parts Inspection, and more so because Maruti is an organization of very large proportions.
6.
Stability and Change
- Maruti has seen a lot of changes in its task environment over the years and it has also tried to adapt to them. Its focus and strategy has also changedfrom one of a monopoly player in a sellers market to a small car production and R&Dhub for European and African markets for its parent Suzuki Motor Corporation. In thedomestic market its strategy has been mainly to defend its market share of late.However, its basic organizational structure has remained more or less the same over the years and it is this stability that has helped it grow into the biggest car manufacturer in India.
Culture at Maruti
The culture adopted by Maruti can be inferred from the following activities that are practicedwidely in the organization:-
•
Open office
•
Common canteen
•
In-house Quaterly journal
•
MD’s letter to the employees
•
Common uniform
•
Morning Exercises
•
Discipline
•
Performance orientation
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•
Daily morning meetings @ 9
•
Daily production meetings
•
Weekly management committee meetings
•
Bimonthly product committee meetings
•
Union management meetings
•
Maruti Sahyog Samiti
Flaws in Present Organization Structure
Through our interactions with our contacts at Maruti and other employees we observed thatsince it is a large organization, it faces inter-departmental friction in many areas which arelisted below1)
Parts Inspection vs. Engineering
The Parts Inspection Department sees to it that existing and new parts conform to the levelsof quality desired. On the other hand managers in the Engineering Department areencouraged to reduce costs by localizing the sourcing of parts. The process of localizationrequires the sanction of the Parts Inspection Department and this is a cause for conflict. Thisconflict is intensified if the Parts Inspection Department is headed by a Japanese manager who reports to Suzuki and would want that parts be sourced from Japan.2)
Marketing vs. Others
The marketing department which operates in a boundary spanning role is entrusted with theresponsibility of ensuring that the customers’ expectations are met. However, very often therecommendations that it suggests are not well received in other departments like engineering.For example, some time back after analyzing data from customer surveys the marketingdepartment recommended that the audio systems in Maruti Cars should be of the Blaupunkt brand. This was turned down however as Suzuki had formed a tie up with Pioneer to use itsaudio systems.3
) Quality vs. Others
The nature of the responsibility of the Quality department frequently brings it into conflictwith other departments like Engineering and Production. Whenever the Quality Departmentdeclares that a certain product or process is not clearing the quality requirements, thecorresponding department may protest against it as most of the time such tests are marginal.
Proposed Structure
According to the star model , we propose the following
Maruti Suzuki India LimitedPage 21

Rewards
Rewards and compensation of the company should be evaluated more frequently and shouldhave greater linkage to employee performance, added incentives like all paid expense tripsand more ESOPs should be incorporated
People
Frequent interaction among different divisions through outbound learning programmes.Frequent stand-up meetings and activities should be a part of their culture.
Processes
Although they follow very stringent JIT, TQM and Kaizen principles there should beincreased and reinforced focus more on quality assurance, less defects specially keeping inmind the escalating competition in the small car segment in India
Strategy
Their strategy should be more focused on the changing customer demands and trends in theindustry and modify their product lines in accordance with the consumer preferences.
Structure
Analyzing the current structure we have observed that it is more of functional structure withvertical communication and integrating force is the top management. In the current structurethere are conflicts between different departments. Maruti has some examples of inter-department friction which are outlined here:
Recommendations
We think that there is need for more of horizontal integration between departments atdepartmental level is required. Another factor is that the levels of employees are quitediversified which creates a complicated hierarchy and thus complicated structure. Thehierarchic levels should be reduced. Currently they have direct contact with a person from a particular department playing the role of a liaison but this system is still resulting in conflicts.The structure they are following is multigrouping structure where employees share acommon supervisor and common resources and are jointly responsible for performance. Thisstructure is often a type of matrix or hybrid
. But to improve the structure the need of thehour is to increase horizontal integration, to do that we can appoint a full time integrator.Full time integrator has a title such as product manager, project manager, or brand manager.Unlike liaison as appointed earlier this person will not report to functional department. This person is located outside the department and has responsibility for coordination several
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departments. He can also suggest changes in the project. They don’t have authority over teammembers with respect to giving pay, hiring or firing.Integrator need excellent people skills and has to use expertise and persuasion to achievecoordination, should be able to get people together and resolve conflicts. Thus conflicts between various departments can be handled by full time integrator and the decisions taken by integrator would not be biased towards any department and hence it would be easilyaccepted by the departments in conflict and in turn it will take less time to resolve the existedconflicts.
Conclusion
The success or failure of an organization primarily depends on its ability to sustain its comparative advantage
. We believe that MSIL has been able to achieve its goal of “providing the consumers with cars at the least possible prices than its competitors, whileassuring the quality and service that is best in the industry” purely on the basis of a highlyefficient structure, design and adherence to its core values.As a group we felt a certain sense of the “ satisfaction vibes
” emanating from theemployees .The way they emphasized upon the morning exercise regime or the fact that eventhe “Chairman, Mr. Bhargava has lunch with them on the same tables and wears the sameuniform as them” creates a sense of equality and respect in the eyes of all the employees.Maruti truly has been a pioneer in providing the common Indian man with four wheels todrive around and the employees feel a great sense of pride in this fact. The flat,decentralized structure and the importance given to all the employees go a long way increating a harmonious working environment where everyone focuses towards achieving themacro objectives.
Maruti Suzuki India LimitedPage 23

Maruti as an Organization-project Report
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The aim of this report is to study the structure, process, competency, values, culture andmission of an organization and analyze these different aspects taking a holistic view of thecompany. In this regard, we chose Maruti Suzuki Limited as it is the leader in IndianAutomobile industry and moreover it has a majority share by the Japanese car-maker Suzuki,so the intermingling of both Japanese and Indian culture is an interesting aspect from a behavioral point of view.Our approach initially was to firstly get ourselves acquainted with the company and itsfunctioning through secondary sources before approaching Mr.G.S. Bhargava (Sr. Manager ,Quality Assurance) ,Ms Sheetal Dhiman(Deputy Manager,EN1T Dept)and Mr. Manoj Kumar Singla(Assistant Manager -Inspection) for further information. We also managed to have asmall talk with the other employees at the end of the day. We received valuable insight intothe functioning of the organization and how it “ cares for its people and the customers
”“The organization not only works on paper but has also implemented its policies effectivelyundertaking timely evaluation and control of its functioning”. For example, the flat structureand the equality have been maintained throughout organization at every single level whichhas been reviewed in the subsequent pages.