Independent university, Bangladesh

Introduction

Name: Abid Faisal

ID: 1821456

Subject : Exercises regarding CH-6

Course Title : Principles Of Accounting
Course Instructor : Naseeb Sir
Course ID : ACN 201
Section : 08

Date of Report Submission: 1/04/2019

 Letter of Transmittal

Date: 13th November, 2018

Course Instructor: Iftekhar Mahfuz
Subject: Comparing the Structures between Mechanistic & Organic
Organization

Dear Sir,

With due respect and humble submission, we are submitting our report on
management issues for the organizational structures of City Bank & Pathao.
It is a great pleasure to inform you that we have completed our project under
your kind presence. We have put a lot of efforts into this Report. The
following report was prepared to overview the insights of the structure and
management issues of City Bank and Pathao We have worked on the
departmentalization, span of control, chain of command and structure that
each of the company follows.

Therefore, we are now waiting for your kind approval by placing our term
paper before you. We expect that our term paper will satisfy you.

Sincerely yours,

Team sublimation
 Table of Contents

Executive Summery 1

Overview Of Pathao 2

Pathao as an Organic Org3-4

Overview Of City Bank 4-5

City Bank as an Mechanistic Org 6-7

Effectiveness In both perspective 8

Conclusion..................................................................................9

Referencing................................................................................9
 Executive Summery

We have done our report given the subject, researched & Compared the
structure between City Bank & Pathao. We have thoroughly discussed &
based on our research we find City Bank as a Mechanistic Structure & Pathao
as an Organic Structure. Organic & Mechanistic Structure are defined by #3
Factors (Complexity, Formalization, and Centralization). Pathao, A Ride
Sharing Company, solving the traffic congestion and transportation issues of
the eighth most populated city of the world, Dhaka. They aimed to create a
platform that will change the traditional mechanism of logistics and public
transport in the City. According to each company’s characteristics, pathao
provides flexibility & Low level of complexity to their organization’s
employees. City Bank is highly complex & highly centralized which puts their
employees under strict rules & regulations. We will give the 3 Basic questions,
1. Who’s in charge?
2. Who’s responsible?
3. Who communicates whom?

Upon the Following, It will be clarified that pathao & city bank Suits Organic
& Mechanistic Structure Respectively. And how they can be more effective by
following existing or adopting a different structure.

Overview Of Pathao

Pathao, A Ride Sharing Company, solving the traffic congestion and

transportation issues of the eighth most populated city of the world, Dhaka.
Pathao broadly operates under two primary areas—delivery and logistics
service and motorcycle taxi service. It has established broad operations spread
throughout the country and was able to differentiate themselves from
competitors using an innovative idea to tackle the traffic problem in the city
and by leveraging technology to streamline its operations. They aimed to
create a platform that will change the traditional mechanism of logistics and
public transport in the city. Through dedication and hard work, they had been
able to create a proprietary technology that sets Pathao apart from other
logistics service provider in the country. Pathao’s tag line “Delivery made
easy” sums up the core principle of their business, which is to provide fast,
secure, easy delivery services to its customers, be it E-commerce, vendors, or
individual clients. Fahim Saleh, a successful entrepreneur from New York, had
a vision of creating a successful venture in Bangladesh, his home soil. Together
with Hussain M. Elius and Shifat Adnan, the chief executive officer and chief
technology officer, respectively, they created Pathao which they believed had
the opportunity and scope to “change the world as we know”.

Pathao As an Organic Organization

According to Burns and Stalker, an organic organization is one that is very

flexible and is able to adapt well to changes. Its structure is identified as
having little job specialization, few layers of management, decentralized
decision-making and not much direct supervision.

 Cross-functional teams: A cross-functional team is a group of people

with different functional expertise working toward a common goal. It
 may include people from Finance, marketing, operations and human
resources. The organic organization follows this structure.

 Cross-hierarchical teams: This types of organizational team consisting

of members at the same level of hierarchy in the organization but
serving in different areas. This types of team can take significantly
longer to develop cohesion because members come from different
experience and backgrounds.

 Free flow of information: In organic organizations there is no chain of

command. Meanwhile employees have no specific controller or
supervision. They can inform any of their senior.

 Wide spans of control: Single number of managers or supervisor

oversees a large number of subordinates. In wide spans of control
managers will have less time for planning, subordinates may make
decisions they are not trained to make.

 Decentralization: Organic organization have low centralization which

means that the members in the organization share in organizational
decision-making and power. This decentralization can be difficult to
implement in union environment, where words rules introduce a higher
level of rigidity to how a business can be operated.

 Low formalization: In low formalization organization have no specific

procedures, rules and sometimes responsibility also. So that the service
of the organization will be poor and create a lot of mess during work. In
organic organization we will see low degree of formalization so that
their service will be poor and difficult.

Overview Of City Bank

City Bank is one of the oldest private Commercial Banks operating in
Bangladesh. It is a top bank among the oldest five Commercial Banks in the
country which started their operations in 1983. The Bank started its journey
on 27th March 1983 through opening its first branch at B. B. Avenue Branch
in the capital, Dhaka city. It was the visionary entrepreneurship of around 13
local businessmen who braved the immense uncertainties and risks with
courage and zeal that made the establishment & forward march of the bank
possible. Those sponsor directors commenced the journey with only Taka 3.4
crore worth of Capital, which now is a respectable Taka 330.77 crore as
capital & reserve.

City Bank is among the very few local banks which do not follow the
traditional, decentralized, geographically managed, branch based

business or profit model. Instead the bank manages its business and operation
vertically from the head office through 4 distinct business divisions namely

1. Corporate & Investment Banking;

2. Retail Banking (including Cards);
3. SME Banking; &
4. Treasury & Market Risks.

Under a real-time online banking platform, these 4 business divisions are

supported at the back by a robust service delivery or operations setup and
also a smart IT Backbone. Such centralized business segment based business
& operating model ensure specialized treatment and services to the bank’s
different customer segments.

The bank currently has 88 online branches and 10 SME service centers and 1
SME Agro center spread across the length & breadth of the country that
include a full pledged Islamic Banking branch. Besides these traditional
delivery points, the bank is also very active in the alternative delivery area. It
currently has 77 ATMs of its own; and ATM sharing arrangement with a
partner bank that has more than 550 ATMs in place; SMS Banking; Interest
Banking and so on. It already started its Customer Call Center operation. The
bank has a plan to end the current year with 100 own ATMs.

City Bank As a mechanistic Organization

A mechanistic organization concept developed by British theorists Tom burns

and G.M. Stalker in 1961. According to them characteristics of mechanistic
organization was the natural result of combining the six elements of structure.

 High Specialization: The mechanistic organization have high

specialization that means the organization is very much focus on specific
aspect. It may help to gain a greater degree of efficiency. In high degree
of specialization creates job that were simple, routine and standard.

 Departmentalization: The mechanistic organization must have rigid

departmentalization. Specialization through the use of
departmentalization increase impersonality and the need for multiple
layers of management to coordinate the specialize departments.

 Clear chain to command: According to the chain of command principal

ensured the existence of a formal hierarchy of authority, with each
person control and supervise by one superior.
  Narrow spans of control: Span of control means a single manager or
supervisor oversees few subordinates.
Keeping the span control small at increasingly higher levels in the
organization creates tall, impersonal structures.

 Centralization: The mechanistic organization has a high degree of

centralization which means a hierarchy of authority with tight chain of
command. In centralized organization top managers will increasingly
impose rules and regulation. Because top managers couldn’t control
lower level activities through direct observation and ensure the use of
standard practice, they substituted rules and regulation.

 High Formalization: A mechanistic organization demonstrates a high

degree of formalization where organizational activities and decision
making are governed by a system of organizational rules and
regulations. In high formalization organizations has specify (in writing),
procedures, rules and responsibilities for the individual employees,
organizational units, groups, terms and organization as a whole, which
leads to the development of processes, relationships and operating
procedure.
Effectiveness In Both Perspective
In a Organic organization such as Pathao, There are few layers of
management and In addition to flexible & adaptive business environment,
There is no sort of communication error. Decentralized decision making
encourages empowerment which leads to grow business without high
complexity and able to catch up fast growth.
Pathao is a start-up that is constantly evolving and the team believes in
embracing dynamism which is etched into their business philosophy. The
company’s founders hope to expand their network to include the whole of
Bangladesh and ensure that everyone gets the opportunity to reap the benefits
they provide.
In a Mechanistic Organization such as City bank, There are Long line of
chain of command or Hierarchy In which includes to follow each rules &
regulations provided by Top Level of management.
Centralized authority discourages empowerment which leads to
communication error between Top & Low level of management. Employees
get in a situation where they might feel no matter what they do their work will
not be appreciated. On the contrary, Companies with Mechanistic structure
leads a stable and certain environment. It gets less confusing and less chances
of occurring conflict.

Conclusion:
The structure of an organisation varies depending on a number of influencing
factors. Structure is influenced by the external environment in which the
business operates as well as its culture and the nature of the work and
activities it undertakes. The structure can have both a positive and negative
impact on a business. Having the right structure allows a business to respond
and adapt to changes in the market quickly. Innovation and creativity are
usually found in flatter organisational structures and in organisations with an
entrepreneurial and employee focused culture, such as Pathao’s culture means
its employees feel empowered and motivated.

Referencing
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