Fresh Foods Pvt. Ltd. manufactures and distributes organic packaged food products. It’s operations are divided into five main departments – Production, Marketing, Finance, Human Resources and Research and Development. Each department has its own head and a team that focuses only on the work related to their department. This promotes efficiency in utilization of manpower as employees perform similar tasks within a department and are able to improve performance. This also helps in increasing managerial and operational efficiency and results in increased profit.
Since each department handles a narrow range of tasks and focus is on a limited range of skills, it is easier to train new employees.

(i) Identify the organization structure followed by Fresh Foods Pvt. Ltd.

Question

Rewton Ltd. was a reputed computer software company providing unique software all over India. The turnover of the company was very high resulting in good profits. The Chief Executive Officer, Vihaan, was very strict and disciplined. He specified the boundaries of authority and responsibility for achieving organizational goals. There was systematic coordination among the various activities and specific relationships among various job positions. The company provided facilities like a canteen, a gym, a library, a music room, and a rest area for its employees, which they could use during rest intervals. Using these facilities, the employees developed friendships and discussed not only their personal, social, and emotional issues, but also the official ones.
The General Manager was of a different view. He told the Chief Executive Officer that there was no use providing these facilities to the employees as it is an extra financial burden on the organization on one hand and on the other hand, it encourages groupism and whenever any change is required in the organization, they all resist. He suggested that they should do away with these facilities. But the Chief Executive Officer, Vihaan, explained to the General Manager that this type of social interaction is necessary, and is in the best interest of the organization. These interactions among people at work give rise to a network of social relationships among employees and have many benefits (i) Identify and explain the type of organization whose existence the Chief Executive Officer felt was necessary.
(ii) State any two advantages and two disadvantages of the type of organization identified in (i) above.

Answer 1

Step 1: Identify the concept being tested.
The case is about identifying the type of organisation structure used by Fresh Foods Pvt. Ltd.
Step 2: Explain the concept.
A Functional Structure is one where activities are grouped into separate departments based on the function they perform, such as production, marketing, finance, human resources and research, with each department headed by a specialist.
Step 3: Apply the concept to the facts of the case.
Fresh Foods Pvt. Ltd. has organised its operations into five departments, Production, Marketing, Finance, Human Resources and Research and Development, with each department having its own head and a team dedicated only to that department's work, which matches exactly how a functional structure is set up.
Step 4: Final answer.
Fresh Foods Pvt. Ltd. follows a Functional Structure, since its departments are formed on the basis of the specialised function each one performs.

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