Business Studies

Organising

Easy

Wipro Technologies, one of India's largest IT solutions providers, restructured its organization in its bid to compete globally with giants like IBM and Accenture. This restructuring aimed to improve customer orientation and operational efficiency, critical to Wipro's ambition of becoming a global technology leader.

The company transitioned from a centralized management system to a decentralized structure, dividing its operations into several self-sufficient subsidiaries focused on specific product lines, such as telecommunications, engineering, and financial services. Each subsidiary operates independently, managing its personnel, accounting, and administrative functions. This decentralization empowered business leaders to take greater responsibility for growth and eliminated an entire layer of executives to streamline operations.

Azim Premji, Wipro's then-chairman, emphasized the importance of this shift, noting that it gave leaders more autonomy and enhanced decision-making at the operational level. This organizational change helped Wipro achieve specialization and allowed better alignment of resources with customer needs.

Despite the advantages of decentralization, including flexibility, faster decision-making, and enhanced accountability, it also posed challenges, such as coordination among subsidiaries and maintaining consistency in strategic objectives. Wipro addressed these challenges by clearly defining roles and responsibilities across its new structure.

Which management system did Wipro adopted during its restructuring?

Functional structure

Centralized structure

Divisional structure

Hierarchical structure

✅ Correct Option: 3

Option 1 -> Functional structure organizes departments by specialized functions like marketing, finance, and operations, which was not the focus of Wipro's restructuring.

Option 2 -> Centralized structure concentrates decision-making authority at the top level, which would limit autonomy and flexibility that Wipro needed during expansion.

Option 3 -> Divisional structure organizes the company into semi-autonomous units based on products, services, or markets, allowing better focus and accountability.

Option 4 -> Hierarchical structure emphasizes vertical chain of command with multiple management levels, which doesn't specifically address Wipro's restructuring needs.

Hence, Option 3: Divisional structure -> Wipro adopted a divisional structure during its restructuring to manage its diverse business portfolio effectively. This allowed each division (like IT services, consulting, BPO) to operate with greater autonomy, have dedicated resources, and focus on specific market segments while maintaining accountability for their performance. This structure enabled better customer focus, faster decision-making, and scalability across different business units. -> correct

Question 41

What was the key challenge faced by the Wipro during its restructuring process?

Question 42

What was the primary objective behind Wipro's organizational restructuring?

Question 43

How did decentralization benefit Wipro?

Question 44

What significant organizational change did Wipro make during restructuring?

Which management system did Wipro adopted during its restructuring?

Solution

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