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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?

Solution

✅ Correct Option: 1

Option 1 -> Divisional Structure organizes the company into semi-autonomous units based on products, services, markets, or geography. Each division operates independently with its own resources.

Option 2 -> Functional Structure groups employees based on specialized functions like marketing, finance, HR, and operations, not by product lines.

Option 3 -> Informal Structure refers to unofficial communication networks and relationships that exist outside the formal organizational hierarchy.

Option 4 -> Matrix Structure creates dual reporting relationships where employees report to both functional and product/project managers simultaneously, forming a grid-like structure.


Hence, Option 1: Divisional Structure -> Since Wipro separated itself into distinct subsidiaries based on different product lines (telecommunications, engineering, financial services), this clearly represents a divisional structure where each product line operates as a separate division with its own resources and management -> correct

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