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MBA Case Let It Be Me

The document discusses the organisational structure of TSAR Nicholas Trading and Financing. It notes that the company uses an informal structure where employees interact socially and form groups. While this informal structure has allowed the company to grow rapidly, it could also cause problems if not managed properly. Rumors could spread quickly through the informal network. Additionally, informal groups may oppose management policies, making changes difficult to implement. Both formal and informal structures are necessary, but the informal structure needs positive management to complement the formal relationships.

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Michelle Alvarez
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134 views1 page

MBA Case Let It Be Me

The document discusses the organisational structure of TSAR Nicholas Trading and Financing. It notes that the company uses an informal structure where employees interact socially and form groups. While this informal structure has allowed the company to grow rapidly, it could also cause problems if not managed properly. Rumors could spread quickly through the informal network. Additionally, informal groups may oppose management policies, making changes difficult to implement. Both formal and informal structures are necessary, but the informal structure needs positive management to complement the formal relationships.

Uploaded by

Michelle Alvarez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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CASE: TSAR NICHOLAS TRADING and FINANCING: Let It Be Me.

1. What do you think of the organisational structure of the firm?


In this case, Mr. Eduardo Nicolas’ approach to management is informal. This
includes the business activities and even the manner of recruiting and hiring employees.
In the informal organisational structure, individuals are assigned various job positions.
While employees are working on their job positions, they interact with each other and
develop some social and friendly groups in the organisation. This network forms
another structure in the organisation which is called informal organisational structure.

The informal organisational structure in this case can be easily created


automatically for the main purpose of getting psychological satisfaction. The existence
of this informal structure depends upon the management style of the company. Hence,
it also depends upon the perceived formal structure because people working at different
job positions interact with each other to form informal structure.

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Looking into this case, I can say that the informal type of management being
used by Mr. Nicolas really works to his advantage, as the company is producing good

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results. It has also made the company grow from one branch to its present expansions.
Therefore, the company has been making so much profit. In this case, informal type of

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management does not follow scalar chain so there is a faster spread of communication.
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It also gives due importance to psychological and social need of employees which
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eventually motivate them. Lastly, this type of management can really draw real
feedback of employees on various policies and plans.
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2. What difficulties may be anticipated if the current structure is maintained?


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Informal type of management and informal organisational structure can also be


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very detrimental to the operations of the company if it is not strategically used. It can
potentially spread rumors so fast. According to survey, 70% of information spread
through informal organisation are rumors which may mislead the employees. This kind
of structure has no strong work system and may bring negative results because if
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informal organisation opposes the policies and changes of management, then it


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becomes potentially very difficult to implement them in the organisation.

A major threat to this set up is the fact that it gives more importance to
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satisfaction of individual interest as compared to organisational interest. In this type of


organisation, people are under pressure to observe group norms. Sometimes the
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people assembled in informal group lose sight of their objective and all decide to
oppose their superiors unanimously. Such a situation adversely affects productivity.

Therefore, informal relations among the employees are complementary to formal


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relationship. In this context, both formal and informal organisations are necessary for
any group action just as two blades are essential to make a pair of scissors workable. It
is also appropriate to say that the attitude of the management towards informal
organisation should always be positive.

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