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Organizational Structure Of Virtusa Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 5351 words Published: 1st Jan 2015

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The purpose of the report is to identify the practices within organizations in Sri Lanka. The report consisted of tasks that required the need to visit both a public and hence Virtusa and Softlogic were chosen.

First the main organizational structures and cultures prevailing in an organization are mentioned with relation to the organizations chosen, and the influences of the organizational structure and culture on the business performance are investigated. Thereafter the management approaches practiced in the companies are investigated and thereafter the personality characteristics of employees which should be understood by managers are identified too. Thereafter three motivational theories were taken into consideration with regard to the two organizations.

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1.0 Introduction

1.1 Virtusa

Virtusa was established in September 1985 under the Chairmanship of Deshamanya H.K.Dharmadasa with the objective of establishing it as a center of excellence in high technology diagnostic and curative facilities. Healing of the sick being the primary objective, “Healing with Feeling ” became this Hospital of tomorrow. Located at Union Place, Colombo 02 in very close proximity to the business centre and within easy reach from the General Hospital and other many commercial establishments.

1.2 Softlogic

Established in 1902, Perera and Sons Bakers, is the biggest bakery in Sri Lanka, producing over 75,000 bakery products including nearly 150 birthday cakes per day and attracting over 15,000-20,000 customers daily. Run by the fourth generation today, the business consists of 58 outlets and three bakeries.

1.3 Organizational structure of Virtusa

The strategic level managers have used process of grouping activities which are similar in nature. Departmentalization has used here by function structure. This organization structure is more efficient. Through this employees get more experienced and well committed to their duties. As for an example under finance director there are purchasing and accounting managers. They are mastered in each sector and no need to find out about other operations. So the specific duties have been given. This is an advantage for them as they can concentrate on their own department and can offer a better efficient service. Each and every manager is responsible for their own duty. Therefore accountability has developed.

Each department concentrates on their own work and that can be a disadvantage for the customers who expect a quality service. Competition among the departments can lead into conflicts as all the departments concentrate on winning the war than attending to overall business objectives. Directors should maintain the flexibility among employees who work in different departments to make the effective use of this structure.

Advantages of the structure:

There can be seen a decentralized structure. It enables decisions to be made closer to the operational level of work.

Accountability and responsiveness is higher.

Always make higher performances.

More keeping with developments and more flexible structures.

Effective motivation and encouragement can be done.

Time is managed efficiently various duties and responsibilities have distributed.

Disagreements are less because decision making is done with other party’s involvement.

It provides opportunity for training and development in management.

Disadvantages of the structure,

Functions can be isolated due to some failures of communication and technological issues.

This is not stable for urgent situations.

There can be occur competitions among each department than concentrating the overall achievement of the organization.

1.3 Chain of command in Virtusa

Chain of command can be described as the way of authority and responsibility pass from the hierarchy. Authority is who have power to make decisions and who have authority to supervise subordinates. In Virtusa mainly strategic level managers such as general manager and board of directors have authority to make decisions and they are passed to the each level through the hierarchy.

Responsibility is the obligation to carry forward an assigned task to a successful conclusion. In this case authorized person can delegate his duties to his assistance but to delegate his responsibility is not permitted.

1.4 Span of control in Virtusa

Span of control is the number of people who report to one manager in a hierarchy. In Virtusa there can see a narrow span of control. There have four layers and five levels. Few employees can be seen under each manager. It allows them to communicate quickly with employees under them and controlling is easier.

Also close supervision can be done and feed back can be getting effectively. It will reduce grievances and conflicts among employees. Also can be reduced getting complex of work. Productivity will get increased and resources can be utilized effectively as well.

1.5 Organizational Culture of Virtusa

Culture is a collective programming of the mind which distinguished the members on human group from another. When it comes to an organizational culture it is a pattern of beliefs and expectations shared by the organizations members. These beliefs and expectations produce norms that powerfully shape the behaviors of individuals and groups.

Virtusa works according to role culture. Top level managers decide the bulk of duties should be done by employees and they are distributed among employees. Employees are assigned for a particular role. They are specialized in each job. So the commitment and dedication can be increased due to this. So to make maximum use of it managers should their skills. The management can make them work better and hard to improve the company’s performance effectively.

1.6 The Organizational Structure of Virtusa

The structure of Virtusa is created with some levels based on functional department wise. This hierarchy has four layers managed by four main chief managers. In this structure the importance of role determines the position in hierarchy. It can be seen wide span of control.

One manager controls large number of subordinates compared with Virtusa. Therefore managers communicate with employees quickly but it is not easy to guide and to control them. More effective feed back can be received from workers. Also it is essential to have management skills to control greater number of employees simultaneously. Grievances and conflicts will be either less or more. They depend on the situation. Close supervision is not easy to be done so productivity can be change. The process of this culture is according to their values which are integrity, care, passion, teamwork and service.

Probably centralized management can be seen here. Communication between employees may less in this structure as the work is specialized. This can be an advantage to the organization as the man power and time is being saved. There can see disadvantages as well as advantages. The role of each individual is well determined but the chain of command is one way, top level to lower level.

Advantages of the structure:

Costs less and company does not need to employ as many managers.

Easy to communicate and coordinate.

Decisions are taken by top level managers and they are effective and fast.

Conflicts and mistakes are less.

Greater of specialization.

New technology and new methods can be trained easily without higher costs.

Managers can meet and pass massages easily to employees.

Disadvantages of the structure,

Difficult to control without proper management techniques.

There is no opportunity to low level employees for their ideas.

Less access to new ideas.

Sometimes it can be costly.

Difficult to have close supervisions.

Hardly get opportunity to discuss complexities with managers for low level employees.

1.7 Chain of command in Softlogic

Chain of command is the way of passing decisions from strategic level to operational level as mentioned before. Similarly the long term strategic decisions are taken by top level managers such as CEO and other officers like chief managing officer, chief people officer, chief financial officer and chief operational officer. So the officers have authority to take decisions of each sector under them.

When it come to responsibilities there have around four mangers under one chief officer. So duties can be delegated easily. But each manager has different schedules and work to be done. So they are not responsible for other’s duties. This means they are specialized in each sector. So responsibility can not be delegated.

1.8 Span of control in Softlogic

In Softlogic there can see wide span of control, which means that one authorized manager have large subordinates to control. But this is larger than Virtusa. In the hierarchy layers are lesser compared to number of levels. As for an example one chief officer is responsible to control four managers. So he should have mastered in more than one section. So mistakes can be happened easily.

It is easy to pass messages though it is a flat structure. Also it costs less money to run a wider span of control because the company does not need to employ as many managers. But there are disadvantages as well from this horizontal management structure.

1.9 Organizational Culture of Softlogic

Culture is the specific collection of values and norms that are share by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization. Role culture and task culture are common in Softlogic.

Specific duties have given to each and every employee who comes from various backgrounds. All are driven towards a common goal. Softlogic is more concerned on team work rather than individual performances. They believe that satisfied employees excel in quality customer service. Softlogic also maintain commitment to stakeholders, and the environment. Softlogic’s corporate culture is to do the right thing for their employees, the community and the customers they serve.

2.0 The influence of the organizational structure and culture towards the organizations’ performance.

2.1 The relationship between the organization’s structure, culture and the effects on business performance in Virtusa.

Role culture is common in most organizations today. The decisions are taken by top level managers are implemented by tactical level and operational level employees. So each member has specific goal. It leads to success of the organization. Also this has a flexible environment. It helps the employees to understand organizational events and buildup strong relationship among employees. The staff of Virtusa benefits from specialization. Also training programs are conducted to improve the personality skills and the attitudes of employees.

The structure and the culture of this organization teach about organizational activities. They involve with specific work rather than spending time to find out the expected job to be done by them because they are well educated and with developed skills. This reduces wastage of time and man power as well. This can help to improve company performances. Here has departmentalized according to function structure. Human resources, sales and marketing and Finance are some of main departments in Virtusa. The employees in each section can get more experience and it leads to improve the company performances and they provide best customer service too.

2.2 The relationship between the organization’s structure, culture and the effects on business performance in Softlogic

Softlogic operates according to corporate culture. Decisions are taken by top level managers and other employees are never involved with it. Probably decisions in Softlogic are long term and they are stable. So subordinates never get a chance make decisions when top level managers are absent. In Softlogic the range of decisions are basically to maintain standards and to offer a best customer service

The employees have built strong relationships among them and they can work friendly and helpfully when they work together. By working friendly they get motivated and try to do their best. There should have a good customer service as well as providing quality food items. So this can be an advantage to customers as well because the customers are always looking for best service. Employees work in Softlogic have work shops to develop personality skills as well as to improve staff relationships.

The structure of Softlogic is more effective for their success. Few levels can be seen and it helps to improve its company performances by doing more work under guidance of each manager. Communication is easy and not costly. So the culture and structure of the organization affect the performance of Softlogic and all the employees are likely to make it effective.

3.0 The different management approaches in Virtusa and Softlogic

3.1 How Management theories are applied in Virtusa.

Classical approach to management

Division of Labour

Division of labour is one of the key features, mainly applied in the Virtusa. They have separated the service procedure into various elements, with each part allocated to a particular employee or set of employees. It is based on the thought that employees can reach a high degree of effectiveness if they are classified to one particular service


There is one central position in the hospital that manages the control over all the divisions. Centralization had made easy consultation and communication among subdivisions, mostly those at the centre; as these days with technology, electronic and computer control, centralization has its desirability. This approach is mainly practiced in the department of IT and administration.

Chain of command

That is, the chain of superiors ranging from the top to the lowest. Unluckily, this has become a lengthy process in large organizations, such as this Virtusa and therefore problems can arise.

This chain of command approach is applied in almost all the departments of the hospital.


Payment is a significant motivator though by analyzing a number of possibilities. In this hospital all the employees are fairly paid in accordance with their contribution. This approach is applied in the human resources department basically.


Employees must obey their superiors, but this is two-sided: employees will only obey orders if management plays their part by providing good management.

3.1.1 Behavioral approach to management

Human relations approach

As in every organization human relations approach is basically applied in the human resources department in the Virtusa. This is an attempt to make managers more responsive to their employees’ requirements. There is a better understand of human behavior at work, such as motivation, expectations, and enhanced productivity.

Systems approach to management

The systems approach to administration is a thought which views a company as an interconnected purposive system that consists of numerous business sections. It is a management approach which enables the managers to serve the company as an incorporated part or a major section of the larger outside commercial environment.

Contingency approach to management

Since, the contingency approach to management is based on the thought that there is no one finest way to administer and that to be effective, planning, organizing, leading, and controlling must be customized to the particular conditions faced by an organization, Virtusa is also practicing the same thing. As organizations, people, and conditions differ and change over time. Virtusa has identified environmental change and improbability, work technology, and the size of a company as environmental factors impacting the efficiency of it.

3.2 How Management theories applied in Softlogic

3.2.1 Classical approach to management

Division of Labour

At Softlogic., Specialization allocates the person to build up experience, and to constantly improve his skills. Thereby he can be more dynamic. The maximum development in the productive powers of employment, and the greater part of the skill, handiness, and judgment with which it is anywhere aimed at, or applied, seem to have been the effects of the division of labour.


This company believes that payment for work done should be fair to both employees and employers and employees must be paid adequately as this is a key motivation of employees and consequently greatly influences output.


They also believe that workers must be treated kindly, and fairness must be enacted to make sure a just workplace. Managers should be fair and independent when dealing with employees. Encourages staff to be trustworthy and to be dedicated workers.

3.2.2 Behavioral approach to management

Human relations approach

This company uses Human Resource Management theories focus on techniques of recruitment and selection and highlight the advantages of interviews, general assessment and psychometric testing as employee selection procedure.

3.2.3 Systems approach to management

The systems approach is not practiced in this company.

3.2.4 Contingency approach to management

Company is concerned about the changes in the trends and they are producing new kinds of food items in order to stay firm in the competition. According to the contingency perspective, constant environments suggest mechanistic structures that highlight centralization, formalization, standardization, and specialization to achieve efficiency and consistency.

4.0 different motivational theories and how they could be exercised to motivate employees/individuals in an organization to achieve organizational goals.

Motivating each of the individuals requires recognition on your part that each employee’s motivation needs are different, and motivating the team requires a different approach from motivating the team members.

It is unlikely that you will ever manage a team where everyone is adequately trained. It is even more unlikely that any leader has a team that never needs coaching. You need to be able to identify the training needs of your team members and be able to get that training for them.

Motivation theories are mainly of two types:

Content (need) theory

Process theory

4.1 Content (need) Theory:

This theory mainly focuses on the internal factors that direct and enhance human behaviour.

The following are some of the major content theories:

Maslow’s hierarchy of needs

Aldermen’s ERG theory

Hertzberg’s motivator-hygiene theory (two – factor theory)

4.1.1 Maslow’s Hierarchy of human needs

Of the different types of content theories, the most famous content theory is Abraham Maslow’s hierarchy of human needs. Maslow introduced five levels of basic needs through his theory.

The Hierarchy of Needs is as follows:

1. Physiological Needs: basic issues of survival such as salary and stable employment

2. Security Needs: stable physical and emotional environment issues such as benefits, pension, safe work environment, and fair work practices

3. “Belongingness” Needs: social acceptance issues such as friendship or cooperation on the job

4. Esteem Needs: positive self-image and respect and recognition issues such as job titles, nice work spaces, and prestigious job assignments.

5. Self-Actualization Needs: achievement issues such as workplace autonomy, challenging work, and subject matter expert status on the job

Just like Maslow’s hierarchy of needs, through dual factors theory, Hertzberg describes certain factors in the workplace which result in job satisfaction.

4.1.2 Hertzberg’s two factor theory:

According to Hertzberg, he basically identified two separate groups of factors that had a strong impact on motivation. His first groups of factors were the hygiene factors which consisted of factors such as working conditions, quality of supervision, salary, status, company policies and administration. Having said that, the  second group of factors  identified were known as the motivating factors which consisted of factors such recognition, achievement, responsibility, interesting job and advancement to higher level tasks as and growth etc.

4.1.3 Process Theory:

Process theory of motivation is a cognitive rational process and concentrates on psychological and behavioral processes. This basically motivates individuals and focuses on how workers needs influence their own behavior.

Main process theories include

Vroom Expectancy theory

Adam’s Equity theory

Needs Goal Setting theory

Vroom Expectancy theory efforts linked not just to the desire for a particular outcome, but moderated by an evaluation of the likelihood of success. Here motivation strength is determined by the supposed value of the result of performing a behavior and the supposed probability that the behavior performed will lead the result to materialize.

The conclusions that can be strained from this theory are,

Individuals will only act when they have a reasonable expectation that their behavior will lead to the desired outcome.

Effort alone is not sufficient. It has to be accompanied by ability and skill.

Job satisfaction results from effective job performance rather than the other way round.

Job design is therefore of crucial importance. 

4.2 The effective implementation of the above theories and to motivate employees in order to achieve the organizational goal in both Virtusa and Softlogic:

In order to achieve this objective and to keep the employees motivated the first two levels of Maslow’s hierarchy can be used as follows

Physiological needs:

The basic pay of the employees can be increased or in addition to the basic pay an over time rate can be paid. The facilities such as a balanced meal can be provided during the time they are on over time as to encourage them. This shows the organization is concerned about the employees and will lead to motivation.

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Safety needs:

While they are at work, they can be provided with necessary instruments and equipment to keep them safe such as face masks, gloves and etc. en the number of accidents during working hours will be reduced. Rather than providing safety only to workers, their families can also be looked after by providing medical schemes, life insurance as well as health and safety insurance.

Along with Maslow’s hierarchy of needs, Herzberg’s two factor theory can also be applied to motivate the employees.

Hygiene factors:

Increment in salary would be a factor which motivates the employees. As discussed above, over time payments, salary increments and pension schemes can be provided to the employees of this company.

Motivating factors:

The employees can be paid much more attention and can be given more recognition. In order to give them more recognition and to make them feel as part of the organization, the company can can allocate a certain part of the profit to its employees. Once they have achieved a given target they can be appreciated.

The workers should be given targets which they are capable of achieving and leaders can be appointed among the employee groups to make them responsible for related jobs

As mentioned above process theory can be applied in order to motivate the employees in this company. Mainly goal setting theory and expectancy theory can be used to overcome these crises.

The employees in the organization should be able to achieve the given goal within the given time period. Therefore it is essential for task to of easy achievability and also to the team members should be with positive attitudes and focused on the organizational goals rather than individual interests.

As for an example the workers should be given goals which they can achieve. According to the scenario demand for grains has been increasing and fertilizes and grains are complements. Therefore the supply of fertilizes also need to be increased. In order to increase the supply of fertilizes, the workers should be motivated and their productivity should be increased.

It is discussed in the expectancy theory that employees should have the ability and skills to do the specific tasks. Therefore effort alone is not enough. They should be satisfied in order to gain maximum contribution from them. This is one of a crucial event which can be seen in any organization.

5.0 The relationship between leadership and motivation, and how the management practices are influenced by these two factors:

5.1 Different Leadership styles in management

Many people consider that leadership is just being the first, largest or most powerful. Leadership in organizations has a special and more meaningful explanation. Very basically put, a leader is interpreted as somebody who sets direction in an attempt and influences people to pursue that direction the people can be oneself, another individual, a group, an organization or a society. How they set that direction and influence people depends on a variety of factors that we’ll consider later on below.

There are also plentiful theories about leadership, or about carrying out the responsibility of leader of an organization. Such leadership styles used by this company and their advantages are as listed below.

5.2 Leadership styles practiced in the organizations

Autocratic Leadership

The autocratic leadership style is considered as an aged fashioned method with the following distinctiveness:

Manager tries having the most power and control in decision making.

Manager tries making as many decisions as possible.

Managers are less worried with spending their own leadership improvement, and desire to basically work on the mission at hand.

 Manager tries retaining accountability rather than utilize complete allocation.

The autocratic leadership is still used by many leaders across the world in many companies. The cause autocratic leadership carries on, even if it is old-fashioned, is for the reason that it is spontaneous, carries instant advantages, and comes natural to many leaders. Many leaders who begin pursuing leadership improvement are often trying to develop upon their organizations autocratic leadership style.

The benefits of the Autocratic Leadership Style and their impact on employee and company performance

In spite of having many opponents, the autocratic leadership styles recommend many advantages to managers who use them. These comprise:

Decreased pressure due to increased control. Where the manager finally has important legal and personal accountability for a project, it will relieve them and reduce their pressure levels to know that they have control over their providence.

A more productive & dynamic group ‘whilst the leader is watching’. The delay that an autocratic manager maintains over a team improves their working velocity and makes them less likely to relax. This is perfect for inadequately motivated workers who have little concern or attention in the excellence or speed of work performed.

Improved logistics of operations. Having one leader with serious participation in many areas makes it more likely that tribulations are spotted in advance and deadlines met. This makes autocratic leadership perfect for one-off projects with fixed deadlines, or complex work environments where well-organized cooperation is the key to accomplishment.

When is the Autocratic Leadership Style effectual?

Following on from the qualities listed above, the autocratic leadership style is useful in the following work circumstances:

Work environments where spans of control are broad and complex so therefore the manager has little time to allot to each employee.

 Business where workers need to perform low-skilled, droning and recurring tasks and normally have low levels of motivation.

Projects where the work executes wishes to be accomplished to exact specifications and with a tight deadline.

Democratic Leadership

Democratic Leadership is the leadership style that encourages the distribution of accountability, the exercise of allocation and frequent discussion. The style has the following distinctiveness:

Manager makes discussion on all major issues and conclusions.

Manager efficiently hands over tasks to employees and give them full control and accountability for those tasks. 

Manager welcomes comment on the outcome of initiatives and the work environment. 

Manager supports others to become leaders and be occupied in leadership improvement.

The benefits of the Democratic Leadership Style and their impact on employee and company performance.

Positive work environment. An ethnicity where subordinate workers are given fair amount of accountability and are permitted to challenge themselves is one where workers are more encouraged to work and enjoy what they do.

Creative thinking. The free flow of ideas and optimistic work atmosphere is the ideal catalyst for creative thinking. The advantages of this aren’t just appropriate for creative industries, because creative thinking is necessary to solve tribulations in every single organization, whatever its nature. 

Reduction of friction and office politics. By allowing subordinates to use their ideas and even more outstandingly increase credit for them, you are carefully reducing the amount of nervousness workers generate with their manager. When autocratic leaders reject to listen to their employees, or deliberately pay no attention to their ideas, they are efficiently asking for people to talk behind their back and effort to undermine or succeed them.

Reduced employee turnover.  When workers feel authorized through leadership improvement, a company will observe lower rates of employee turnover which has many benefits. A company that spends in leadership improvement for its workers is investing in their future, and this is valued by a large majority of the workforce.

When is the Autocratic Leadership Style effectual?

 Democratic leadership is practical to a level in the industrialized industry, to allocate workers to give their ideas on how processes can become leaner and more inventive. While ‘Fordism’ is still functional in some factories across the country, truth is that production managers are now actually starting to tie together the motivational bonuses associated with not treating workers like robots anymore.

Democratic leadership is successful in professional organizations where the importance is obviously on training, professional & leadership improvement and quality of work performed. Democratic events are basically just one cog in the successful leadership mechanisms firms.

Nonprofit organizations also terrifically


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