6.

Do the nine tests of organizations design and check the improvements required for
organizational design in your department. Explain them from STAR model perspective
(Based on article Do you have a well-defined structure).

9 Test for Organizational Design – TATA Steel

Getting the Fit Right

1. The Market Advantage Test. Does your design direct sufficient management attention
to your sources of competitive advantage in each market?
Based on the end use of final product, TATA Steel has categorized its products in 4 segments.
i.e.
i- Automotive and Special Product
ii- Branded Product, Retail & Solution
iii- Industrial Products, Projects & Exports
iv- Transfers
TSL has the largest network of hubs, spokes, distributers and dealers in the country. So, it has a
competitive advantage in the market.

2. The Parenting Advantage Test. Does your design help the corporate parent add value to
the organization?
Just as parents play varying roles in families, corporate headquarters play varying roles in
different companies. The focus of this test is to make sure the organizational design is
tailored to support these roles.
TATA Steel has separate department for these support roles such as R&D, Shared Services,
Total Quality Management, Corporate Communication, Legal, Information Technology etc.
Each of these support functions
3. The People Test. Does your design reflect the strengths, weaknesses, and motivations of
your people?
If an organization is not suited to the skills and attitudes of its members, the problem lies
with the design, not the people.
In tata steel, each department is headed by a chief and all the chief’s reports to their
respective vice president. All the vice presidents report to the CEO. All the chiefs and vice
presidents are experts in their respective field. So, there is a better coordination and
learning opportunity among the top managements and the employees. \
4. The Feasibility Test. Have you taken account of all the constraints that may impede the
implementation of your design?
Government regulations are rarely a dominant influence on TATA Steel’s organizational
structure and the interests of a company’s stakeholders are taken care carefully by the
company. So, there is no constraints from govt. as well as from the stakeholders in
implementation of any new design.
Refining the Design

5. The Specialist Cultures Test. Does your design protect units that need distinct cultures?
TATA Steel is well known in this world for its vision, mission, culture and values. Each
department and each employee of this organization follow these core values. In this diverse
organization, the organization gives equal priority to every team, whether it’s a specialist
culture or diverse culture, as long as it is aligned with the core value of the organization.
6. The Difficult-Links Test. Does your design provide coordination solutions for the unit-to-
unit links that are likely to be problematic?
Proper co-ordination and collaboration exist among different units of the organization.
E.g. Collaboration between operation units and maintenance units to minimize delay and to
improve productivity.
7. The Redundant-Hierarchy Test. Does your design have too many parent levels and
units?
Indian and South-east Asian operation of TATA Steel is managed by CEO&MD of TATA Steel. For
each plant unit, there is a plant head (Either VP or MD) who looks after the plant at different
location. So, there is no redundant hierarchy in the organization.
8. The Accountability Test. Does your design support effective controls?
The department chief of each department is accountable for all the activities of that
department. When there are shared responsibilities, each team share equal responsibility of
the activity.
9. The Flexibility Test. Does your design facilitate the development of new strategies and
provide the flexibility required to adapt to change?
A well-designed organization is flexible for the future as well as fit for the present. It provides
ways for a company to pursue innovation and allows for adaptability to changing
circumstances. Of course, it takes more than a good organization design to ensure innovation
and flexibility—it also requires flexible minds, deep talent, and robust resources.
Currently TATA steel moving towards a more modern and automated industry. The organization
is implementing advance technologies in its operational unit with changing time. And for that
the organization is adapting new organizational design.