Answers:

(Bricelia)

1) Identify the type of organisation structure being used at Synergos and explain how it works. What
are the benefits of using this type of structure? What are the pitfalls?

Ans) Synergos is a young management and strategy consulting firm based at Mumbai. Synergos fits in
with their requirements owing to its personalised service and reasonable commission structure. The
Synergos team decided to focus on the small and medium enterprises (SMEs). These were frms that
realised they had problems needing specialist advice, but were apprehensive to approach the big firms
on account of their limited outlay and inexperience of dealing with such firms. Synergos came to their
aid by tailoring their services as near as possible to their needs. Another differentiation platform
Synergos offered to its client was a fully-integrated consultancy service where it got involved right from
the stage of planning down to its implementation and monitoring.

Presently, Synergos has grown to be a medium-sized consultancy firm, serving clients in India and
abroad, working for industries ranging from auto components to financial services and for
manufacturing organisations to service providers. Some-how, nearly half of the assignments it has
worked on have been for mid-sized, upcoming, family-owned businesses, a niche it has served well.

The organisational structure at Synergos has a board at the top, consisting of seven people, including the
four founding members and three independent directors. One of the independent directors is the
chairman of the board. Urmish, as the founder CEO, also heads an executive management committee
with each of the founding members, leading three other top-level committees dealing with business
portfolio, service management and executive recruitment The benefits that the company gains is the
flexibility that such an organisational arrangement affords seems to have been the major reason for the
evolution of the organisation structure at Synergos over the years.

But there are ako some pitfalls that the company had like the management control of the company is
discreet and performance-based rather than behaviour-based. The means for control are informual,
such as direct supervision.

(Prerna)

2) Express your opinions whether the structure is line in with the requirements of strategy that
Synergos implementing

Ans) The organisational structure at Synergos has a board at the top, consisting of seven people,
including the four founding members and three independent directors. The management team is called
the professional group. The rest of the employees are referred to as the staff. The professional group
has young women and men who are graduates from some of the best institutions in India and abroad.
There is a bt of multi-tasking however, to utilise the wide range of skills and special expertise that the
professionals have. For administrative matters, the professionals are assigned to client-service
departments of industry solutions, enterprise solutions and technology solutions. The staff group of
employees consists of the support people who provide a variety of services to the professionals
Recruitment for professionals is stringent. Synergos typically looks for a good combination of education
and experience and lays much emphasis on the compatibility of the prospective employee with the
shared values. The staff positions are also open for persons wanting to work on part-time or project-
bases. Emphasis is given to the ability of the prospective staff to undertake multi-tasking and work with
documentation and word processing and presentation software packages. Therefore, the structure of
Synergosis somewhat in line with the recruitments.

But there is big pitfall that the compensation system consists of a base salary with commission and
bonus depending on performance only. The performance appraisal is informal, with at least one of the
four founding members being part of the evaluation committee for a professional.

(Sakshi)

3) Based on the information related to the information, control and reward systems available in the
case. examine whether these systems are appropriate for the type of strategy being implemented.

Ans) The performance appraisal of Synergos is informal, with at least one of the four founding members
being part of the evaluation committee for a professional There are not many training opportunities
except the on-the-job learning. New professionals are assigned to a mentor for some time till they are
ready to handle assignments autonomously. The staff members are usually recruited from fresh
graduates, with good degrees from reputed institutions, in arts, sciences and commerce.

Usually, the founding member closest to the work area of the employee is involved in determining the
rewards to be given. The time-cycle for appraisal is one year. Management control is discreet and
performance-based rather than behaviour-based. The means for control are informal, such as direct
supervision. Hence, this shows that the performance appraisal systems are not appropriate to be in
lined with the company's strategy and the company should also give appraisals and rewards according
to the behaviour of the personnel also.

(Vedant)

4) Discuss the major structures that could be used as building blocks in creating organizational
structure. Mention advantages and disadvantages of each type of structure from a strategic
implementation viewpoint.

Ans) The individual elements of an organizational structure typically include a variety of components
that one may usefully see as building blocks: 1) departments or divisions; 2) management hierarchy; 3)
rules, procedures, and goals; and 4) more temporary building blocks such as task forces or committees.

Synergos have managed these four building blocks in the following manner :

a) Departments or divisions : synergos have devided its departments into IT, management, client service
departments, and variety of small multitasking staff that is professional group.

Advantages : The head of each division looks after all the functions connected with their product that is,
purchase, sale, advertisement, production, finance, etc. It helps in the development of varied skills in a
divisional head. All the activities of each division are carried out independently. Hence, the divisional
results (profit/loss) can be assessed easily. On this basis, an unprofitable division can be closed Every
division is independent in itself. The divisional manager can take any decision regarding his division
independently without consulting other divisional managers. Hence, decisions are quick and effective.
For every product a separate division is opened. If a company wants to introduce a new product, it can
be introduced easily without disturbing the existing division. Hence, it is easy to expand the concern.

Disadvantages: This structure is not suitable for small organizations. Headquarters find it difficult to
control each division. Duplication of activities may happen in different divisions. Can be very expensive,
When each division is engaged in independent service cost may increase. This structure is not suitable
for small organizations. Headquarters find it difficult to control each division. Duplication of activities
may happen in different divisions. Can be very expensive, When each division is engaged in independent
service cost may increase.

b) Management hierarchy: The organisational structure at Synergos has a board at the top, consisting of
seven people, including the four founding members and three independent directors. And than the
working professional group.

Advantages: Within a hierarchical organizational structure, clear lines of communication are established
for everyone. Employees in entry-level positions would receive their daily assignments from their direct
supervisor. The direct supervisor is responsible for interpreting orders coming from their supervisors.
That process continues moving upward until it reaches the top individual in the structure. This makes it
easier to plan and implement business strategies quickly, assuming employees stick to the structure. A
hierarchical organizational structure communicates to internal and external parties about who holds
what authority within the business. As more authority is granted, more responsibilities are typically
assigned. This creates a clear structure for reporting, allowing for consistent movement of information
up and down the chain of command. For those who are looking to advance their career, this chart
creates a path that they can follow.

Disadvantages : When there is a hierarchical organizational structure in place, teams tend to stay within
their defined structures. Collaboration within a team still happens. Collaborating outside of a team silo
can be difficult to accomplish. People tend to stick together, competing for power, instead of working
together as a whole to advance the mission of the company. Within the hierarchical organizational
structure, managers often become territorial about their power within the company. They become
defensive if other managers start trying to work with their employees. Instead of looking at an
organization-level issue with a clear mind, they might approach the situation from the perspective of
their department only. This creates a competition for power which can be destructive for everyone
involved.

(Cyrus)

c) Rules, procedures, and goals : the main goal of the Synergos is to approach more And more
companies and increase revenue. So,The Synergos team decided to focus on the small and medium
enterprises (SMEs). These were firms that realised they had problems needing specialist advice, but
were apprehensive to approach the big firms on account of their limited outlay and inexperience of
dealing with such firms. Synergos gave these firm a helping hand with little bit less price.

There are many rules which are followed by the management as well as employees . Recruitment for
professionals is stringent. Only students from affiliated universities of India and abroad are recruited,
especially those which are work oriented and can perform multitasking. No training is provided, new
employees can learn on the job itself. The staff positions are also open for persons wanting to work on
part-time or project-bases. compensation system consists of a base salary with commission and bonus
depending on performance only. The performance appraisal is informal, with at least one of the four
founding members being part of the evaluation committee for a professional.

Advantages: Goals help define a company's purpose, assist its business growth and achieve its financial
objectives. Setting specific organizational goals can also help a company measure their organization's
progress and determine the tasks that must be improved to meet those business goals.

Rules define your organization and give it its personality, and they can keep your business in compliance
with the law. Those rules also help managers and employees understand where they fit into your
business. They remove the feeling of discrimination and asserts effectiveness of decisions.

Disadvantages : goals may create unnecessary stress and pressure. This is one of the most obvious and
direct effects you will get from goal setting – stress and pressure.

One of the disadvantages of organizational rules is that the rigid nature of business rules and regulations
can make it difficult for you to implement changes. By their nature, business rules tend to be inflexible
and binary, which creates a rigid framework for your employees.

d) Temporary building blocks: Synergos with its effective working strategies and openly keeping the
options of part time and project based attracting many small enterprises. There are working teams as
well as individuals.

Advantages : temporary working blocks are flexible and can be performed or moulded in any season,
any time or anyday. Its not rigid and stiff. These tasks can be done by anyone in organization such as
may b manager or any working professional.

Disadvantages isadvantages : There is a question or credit in these temporary working blocks. Since, the
salary is depended on one single task performed, varied work tasks create inequality of amount of work
being performed by the professional.

(Priya)

5) Discuss the salient features of structures for the business strategies of cost leadership,
differentiation and focus.

Ans) I) Cost Leadership

Low-Cost Business Strategy: The concept of generic strategies for gaining competitive advantage has
received considerable attention recently in the business policy field. Competitive Strategy, a modern
classic of business thinking, provides a strong conceptual foundation for developing corporate strategy.

The cost leadership strategy implies supplying products in a more cost-effective way than competitors
do.

A cost leadership strategy is an integrated set of actions designed to produce or deliver goods or
services at the lowest cost, relative to that of competitors, with features that are acceptable to
customers.

A) Achieving Cost Leadership

Demand Forecasting Economies of Scale Standardization Aiming at Average Customer Use of Cost Saving
Technologies Differentiation Achieving Cost Leadership : 1) Demand Forecasting : Accurate demand
forecasting and high capacity utilization is to be done to realize cost advantages.

1) Standardization : High level of standardization of products is needed. Uniform service packages can be
offered. Mass production techniques are to be used. All this yields lower per unit costs.

2) Use of Cost Saving Technologies : Investments in cost-saving technologies can help a firm to squeeze
every extra paisa out of the cost, making the product /service competitive in the market.

B) Benefits of Cost Leadership Strategy

1) Cost Advantage : A firm is protected against the ill effects of competition if it has a lower-cost
structure for its products and services.

2) Minimizes Threat : The threat of cheaper substitutes can be offset to some extent by lowering prices.

3) Effective Entry Barrier : Cost advantage acts as an effective entry barrier for potential entrants who
cannot offer the product / service at a lower price.

C) Limitation of Cost Leadership

1) Dilution of Customer Focus : Cost leadership is obviously not a market - friendly approach. Severe cost
reduction can dilute customer focus and limit experimentation with product attributes.

2) Reduction in Scope of Product / Service : Depending on the industry structure, sometimes less
efficient producers may not choose to remain in the market owing to the competitive dominance of the
cost leader.

(Bricelia)

II) Differentiation

There could be small businesses or involved in a single business or a large, complex and diversified
conglomerate with several different businesses. The Differentiation Strategy refers to adding value to
products or services.
Differentiation Strategy: With the differentiation strategy, the unique attributes and characteristics of a
firm’s product provide value to customers.

A) Achieving Differentiation

Such differentiation can be achieved by adopting following things.

1) A firm can use high-quality raw material inputs, superior process technology, speedy and reliable
distribution or better after-sales support.

2) It can incorporate features that offer utility for the customers and match their tastes and
preferences.

3) It can provide responsive customer service.

B) Benefits of Differentiation Strategy

1) Bargaining Power of Suppliers : A firm implementing the differentiation strategy charges a premium
price for its products. So the suppliers must provide it with high quality parts.

2) Entry Barriers : Customer loyalty and the need to overcome the uniqueness of a differentiated
product are substantial entry barriers faced by potential entrants.

3) Negligible Threat of Product Substitutes : Firms selling the differentiated goods or services are
positioned effectively against product substitutes.

C)Limitations to Differentiation Strategy

1) Difficulty in Sustaining Differentiation : In a growing market, products tend to become commodities.

This is the case with the markets with most industries in India. The basis for differentiation is long-term
perceived uniqueness. It is difficult to sustain. There is an imminent threat from competitors who can
imitate the differentiation strategy.

2) Limit to Price Premiums : Price premiums too have a limit. Charging too high a price for differentiated
features may cause the customers to forego the additional advantage from a product/service on the
basis of their own cost-benefit analysis.

(Cyrus)

III) Focus Strategy

The Focus strategy implies third focuses on a specific product market segment with the goal of
establishing a monopoly.

Focus Strategies: A focus strategy is an integrated set of actions that is designed to produce or deliver
products or services that serve the need of a particular competitive segment.

Types of Focus Strategies: Focused Cost Leadership Strategy AND Focused Differentiation Strategy

i) Focused Cost Leadership Strategy: Some firms seek to provide customers with affordable solutions for
better living through use of the focused cost leadership strategy.
ii) Focused Differentiation Strategy: Other firms implement the focused differentiation strategy. There
are number of ways to differentiate products or services to serve the unique needs of particular market
segments.

A) Achieving Focus

Focus is essentially concerned with identifying a narrow target in terms of markets and customers. The
firm implementing a focus strategy can adopt the following practices:

1) Identification Gaps : A firm can choose specific niches by identifying gaps not covered by cost leaders
and differentiators.

2) Superior Efficiency : A firm can create superior efficiency for serving such niche markets.

3) Achieving Lower Cost : A firm can achieve lower cost or differentiation as compared to the
competitors while serving such niche markets.

B) Benefits of Focus Strategies

1) Protection from Competition : A focused firm is protected from competition to the extent that the
other firms, which have a broader target, do not possess the competitive ability to cater to the niche
markets.

2) Substitute Barrier : The specialization that focused firms is able to achieve in serving a niche market
acts as a powerful barrier to substitute products/services that might be available in the market.

3) Effective Entry Barrier: Due to the focused specialization, the competence of the focused firms acts as
an effective entry barrier to potential entrants into the niche markets.

C) Limitations of Focus Strategies

1) Difficult to Move onto Other Segments : Being focused means commitment to a narrow market
segment. Once committed, it may be difficult for the focused firm to move onto other segments of the
market.

2) Cost Configuration : A major risk for the focused firm lies in the cost configuration. Typically, the costs
for the focused firm are higher as the markets are limited and the volume of production and sales small.

3) Transient Nature of Niches : Niches are often transient. They may disappear owing to technology or
market factors. For instance, a new technology may make the process of making the niche products
easier. In the same way, there might be a shift in the consumer’s needs and preferences causing them to
move to other products. Sometimes the rising costs of niche products may cause the customers to move
to the lower-priced products of cost leaders.

4) Rival’s Move : Rivals in the market may sometimes out-focus the focused firms by devising ways to
serve the niche markets in a better manner.