ORGANIZATIONAL STRUCTURE

TATA Consultancy Services

m
er as
co
eH w
o.
rs e
ou urc
o
aC s
vi y re
ed d
ar stu
sh is
Th

CP 401 Organizational Structure, Dynamics & Change

Ahmad Masood (05) | Hamid Husain (15) | Hena Shafiq (16)

https://www.coursehero.com/file/62918799/CA1-Organizational-Structure-of-TCSpdf/
 CP-401 Organizational Structure, Dynamics & Change

Understanding Organizational Structure of TCS

About
▪ Tata Consultancy Services Limited (TCS) is a global IT services, business solutions and
outsourcing company headquartered in Mumbai, India. It is the largest provider of information
technology in Asia and second largest business process outsourcing services provider in India.
Tata Son Limited began its leadership in 1968 to address management issues through the
effective use of Tata Consultancy Services (TCS), a holding company, a holding company.
▪ In the eighties and nineties, Tata Consulting Services invested heavily in research and

m
development of software engineering practices and standards, software quality assurance,

er as
software project management, software processes and related statistics, software engineering,

co
eH w
and software technology.

o.
▪ TCS has offices in over 47 countries with more than 142 branches across the globe, with over
rs e
ou urc
65 offices outside India. TCS employs more than 18,000 consultants and serves hundreds of
clients, providing information technology and business consulting services to organizations in
government, business and industry around the world. TCS accounts for India’s 20 per cent IT
o
aC s

exports. It is a subsidiary of textiles and manufacturing conglomerate Tata Group.

vi y re

Organizational Structure
ed d

The organization structure adapted by TCS is mechanistic in nature. A mechanistic organization

ar stu

is characterized by the following structural factors:

▪ Degree of work specialization is high ▪ Decision making is centralized

sh is

▪ Departmentalization is rigid ▪ Chain of command is long

Th

▪ Managerial hierarchy has many layers ▪ Organizational structure is very tall

▪ Span of control is narrow

https://www.coursehero.com/file/62918799/CA1-Organizational-Structure-of-TCSpdf/
 CP-401 Organizational Structure, Dynamics & Change

COO & EXECUTIVE

OFFICER

HEAD HEAD
GOVERNMENT
ISU ISUs

EXECUTIVE
ASSISTANT Manufacturing Hi-Tech BFS NGM-India Retail

HEAD-GLOBAL

m
CHEIF TECHNICAL

er as
PRESALES HEAD-PMO ARCHITECT/HEAD
SUPPORT

co
eH w
RESOURCE
HEAD BUSINESS
HEAD PROCESS HEAD HR MANAGEMNT
FINANCE

o.
LEAD

rs e
ou urc
TCS Organizational Structure
o
aC s

Departments in TCS:
vi y re

Departments in TCS can be broadly classified into:

▪ Functional departments: Technical, Sales, Marketing, Development and Operations.

ed d
ar stu

▪ Support department: Administration, IDM (Integrated Data Management) and HR.

TCS as an organization is decentralized as there are many functional groups and the main
sh is

head/corporate office does not have the entire ownership of various processes. When it
Th

comes to different functions the process is centralized.

For example Recruitment, L&D and MATC are centralized. For process standardization,
TCS used industry standards to define the fundamental governance processes for
centralized services to be implemented across locations.

https://www.coursehero.com/file/62918799/CA1-Organizational-Structure-of-TCSpdf/
 CP-401 Organizational Structure, Dynamics & Change

Advantages of Mechanistic Structure:

The main advantage of a mechanistic structure is its ability to achieve efficiency. Therefore, in
organizations that are trying to maximize efficiency and minimize costs, mechanistic structures
provide advantages. The source of competitive advantage for TCS lies on achieving operational
efficiency. TCS follows a cost leader strategy.
1. The formal structure and control imposed on employees allows TCS to conform to clients'
requirements and various compliances.
2. There is immense time and margin pressure from clients. Rules, procedures and a hierarchy
of authority help in getting work done in time.
3. Communication tends to follow formal channels and employees are given specific job

m
er as
descriptions delineating their roles and responsibilities. This helps in establishing

co
eH w
accountability for every employee.

o.
4. The mechanistic structure helps in avoiding role ambiguity, and uncertainty among
employees. rs e
ou urc
5. Due to the mechanistic structure, coordination is maintained through the chain of
command.
o
aC s

The quality of product is ensured , as work is assigned to individuals according to their

vi y re

specialization.
TCS is a cost leader in the IT business which helps it to bag projects and thwart competition from
ed d

players like Accenture, HP, Cognizant etc. The projects undertaken by TCS don’t feature product
ar stu

development. The projects are lower down the value chain and involve building IT systems for the
clients.
sh is

Clients outsource low risk-low cost projects to Indian IT companies where as the foreign IT firms
Th

tend to get projects which are high value-high cost ones. The focus for TCS to attain competitive
advantage is to reduce the per employee cost and attain economies of scale.
These are the reasons that TCS follows a mechanistic structure. The fact that TCS continues to do
the same kinds of work that it currently does justifies the mechanistic structure.

https://www.coursehero.com/file/62918799/CA1-Organizational-Structure-of-TCSpdf/
 CP-401 Organizational Structure, Dynamics & Change

Disadvantages of Mechanistic Structure:

1. Mechanistic organizations are often rigid and resist change, making them unsuitable for
innovativeness and taking quick action.
2. Mechanistic structure inhibits entrepreneurial action and discouraging the use of individual
initiative on the part of employees.
3. The structure limits individual autonomy and self-determination, which will likely lead to
lower levels of intrinsic motivation on the job. This had led to lower satisfaction levels of
employees at TCS which in turn has been leading to higher attrition levels.
4. Highly mechanized organizations operating in rapidly changing environments run the risk of
becoming obsolete as competitors sacrifice maximum efficiency in exchange for flexibility to

m
er as
tackle new environmental conditions. IT business is saturated with players who work on same

co
eH w
kind of business model as TCS has.

o.
rs e
Justification of TCS’s Organizational Structure
ou urc
▪ As TCS scales up to over 100,000 employees, it needs a structure that allows it to build a more
o

horizontal organization to capture new growth opportunities.

aC s

▪ Besides, this would also help the company in providing customers a clear and better
vi y re

understanding of TCS’s project delivery.

▪ As part of the reorganisation plan the company had constituted a new unit for its BPO segment,
ed d

in addition to TCS Financial Solutions and the Small & Medium Business Solutions.
ar stu

▪ These three businesses would operate as independent units and help in leveraging sales and
customer relationships, the company said adding that, the new structure would lead to non-
sh is

linear revenue growth.

Th

https://www.coursehero.com/file/62918799/CA1-Organizational-Structure-of-TCSpdf/

Powered by TCPDF (www.tcpdf.org)