Organization Structure Of Maruti Suzuki Business Essay


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Organization Structure Of Maruti Suzuki Business Essay

It is basically a subsidiary company of Japanese automaker Suzuki Motor Corporation that includes a market share of 44. 9 of the Indian car market. Maruti offers a huge volume of cars from the entry level Maruti car to the Sports Utility vehicle Grand vitara. It really is basically an initial company in India who sells more than one million cars in India. It might be renamed such as India as Maruti Suzuki India limited. It had been formed in February 1981and the original production was started mainly in 1983 with the car Maruti 800. The business basically exports more than 50, 000 cars and has the excessive selling in the domestic market with more than 750, 000 cars per year.

The company headquarters are on Nelson Mandela Rd, New Delhi. The term Maruti is mainly used for the compact car model as large numbers of compact cars is sold by Maruti. They have manufacturing facilities located at Gurgaon and Manesar south of Delhi.

Maruti has face some issues with the work force as it was established 1983. There was a one recent incidence on 18th July 2004 at Manesar plant. Manesar plant was hit by violence among the worker as one of the auto factories attacked supervisors and started a fire that killed an organization official and injured 100 managers, including two Japanese expatriates.

The violent mob also influences nine policemen. The company's General Manager of Human Resources had both legs and arms broken by his attackers, struggling to leave the building that was set ablaze, and was charred to death.

Organization Structure Design At Maruti Suzuki

Maruti has an operating organizational structure with horizontal linkages. The activities are divided predicated on the following functions finance, marketing, engineering and sales, spares, production, material, parts inspection, quality assurance, human resource development, it, new business and administration, The centralization is suprisingly low in Maruti as the decision-making authority is quiet decentralized and disturbed across all levels. it is a very big organization and further split into smaller divisions. You will find 29 divisions in Maruti and are headed by one divisional head which is a functional post. These divisions are divided into 132 departments and which can be headed by one departmental head which is again a functional post. In Maruti the formalization is very high all the techniques, procedures, standards are on paper formally. All the departments have department procedures which describe the role of work of the department as well as their tasks and work flow. The procedures are approved by divisional head and are also available for the concerned departments. In production shops the standard operating procedures are displayed on the workstations and are known as Maruti Operations standards.

The structure of Maruti is flat. Usually the employees are divided into six functional heads namely employees and technicians, supervisors, executives, section manager, department manager and division manager.

Changes In Structure

In view of increasing competition the automotive sector Maruti has tried to employ a project based structure to handle the problems effectively. Around two year back in meeting of senior and middle level executives to form teams which would concentrate on specific goals. Around 30 teams of about 8-10 members are formed. These teams have specific mandates in conditions of cost reduction and new product development and received resources and authority to be able to implement the project.

For Example

One team worked on value analysis and value engineering for specific components for cost reduction. Another team done increasing JD power ratings that Maruti secured for IQS (initial quality service). These teams were working on a higher priority and all the departments would likely to co-operate. Also they reported to the JDM directly which helped those to straighten out any problems they encountered. The very best performing teams were rewarded handsomely.

Organization Structure At Maruti

The organization structure of Maruti is somewhat inclined towards a mechanistic structure but it cannot be called absolutely because of occurrence of high degree of decentralization. It offers a functional structure with horizontal linkages. The functional divisions finance, marketing, sales focus on their respective functions. These divisions are further split into 29 divisions. The hierarchy involves a divisional head and a departmental head.

Mechanistic structure is well suited for those organizations which do not require frequent changes in their processes and the surroundings is stable.

Features Of Organization Structure At Maruti

The division of employees at six functional levels and their further hierarchical divisions in different divisions mean that the business wants to achieve perfection at each functional level.

Their production is car and production occurs on a big scale, it offers assembly line in which parts are added to a product in a sequential manner using optimally planned logistics to make a finished product.

The environment in the auto sector is nearly stable and therefore the versatility in the structure is not required.

Each functional department tends to get perfection at its level. At horizontal level it involves cross functional teams and sometimes direct contact in the form of a coordinator from each department that can communicate the progress in their respective department.

Each function is separate at functional level and communication and co-operation among functions are responsibility of someone at the very top hierarchy.

Communication is mainly vertical from department to division and then directors.

Main decisions are taken by directors in respective functional divisions.

All these feature are good mechanistic structures that are economies to scale, and are designed to induce people to behave in accountable ways.

Maruti Has A Set And Decentralized Structure Structural Elements Specialization

As the Maruti have functional structure and division of labour so there is high degree of specialization.


Power is distributed within the hierarchy because there are various persons who play a very crucial role in the organization.


The instructions, procedures are on paper formally in the organization and on the other hand departments have their own formal procedures to do work within an organization in order to achieve their objectives promptly.


Complexity arises because of structural complexity as there is goal incompatibility between different departments.

Span Of Control

The span of control is generally at the very top level is 3-6, 4-8 at the center level management and 0-8 at the low level management. In production level at lower level the span of control is at40-50.

Problems Faced By Maruti In The Business Structure

Lower level managers take decisions understanding the big picture. As the top level managers have low information about the local businesses as compare to lessen level managers.

In decentralization organization there is insufficient co-ordination one of the managers. This can be reduced by defining the company policy and communicating throughout the organization.

Lower level managers have objective that are different from the objectives of the complete organization. For example some mangers are considering increasing how big is departments as compare to profits. This issue can be overcome by defining the performance appraisal which helps the managers in defining their problems.

It may be difficult to tell about progressive ideas in a decentralized organization. Someone in the business have the fantastic idea which provide benefit to the organization but without a strong central direction the idea cannot be shared with and adopted by others in the business.

Flaws In The Business Structure

The main flaw is usually that the employees are facing inter departmental friction in many areas-

Parts Inspection Vs. Engineering

The Parts inspection department would consider the grade of existing and services. On the other hand managers in the Engineering department want to lessen cost by localizing the resources or parts. The process of localization requires the sanction of parts inspection department and this causes a conflict between both departments.

Marketing Vs. Others

The Marketing department mainly focuses on that the client expectations with the business are met or not. However the recommendations it suggests aren't communicated to the other departments that is engineering. For Example- After analyzing the info from the customers surveys the marketing department suggests that the audio systems in Maruti would be of the Blaupukt barnd. This is rejected however Suzuki had formed a tie up with Pioneer to make use of its music systems.

Quality Vs. Others

The role of the product quality department mainly brings this department into conflict with other departments mainly production and engineering departments. When the quality department declares that the certain product or process is not matching with the product quality requirements, the concerned department who has not maintains quality will usually protest against it as almost all of the days such tests are marginal.

Changes In Structure Rewards

Rewards and compensation should be evaluated on a regular basis so that and which contributes to greater linkage to the employee performance and which also brings about boost the goodwill of the company.


Frequent interactions with the different departments really helps to resolve the problems if any in the organization.


There should become more give attention to quality assurance as they only concentrate on very stringent other techniques.


There strategy should be focused on more on changing needs of the clients and also the changing scenario of the industry.


As the Maruti is following presently functional structure which includes various conflicts in it so Maruti has to change its structure according to their requirements so that there is no conflicts in future therefore that they will able to achieve organizational objectives successfully and effectively.

One major point is that there is a need of horizontal integration between your various departments at departmental level is necessary. The hierarchical level is is usually to be reduced because the level of employees are quiet diversified which created a complicated hierarchy.


Maruti has been successful if the company can find the comparative advantage. the flat decentralized structure and the importance given to the employees go quite a distance in creating harmonious and good working environment where everyone focuses on obtaining the objectives of the business successfully and effectively so the company can in a position to achieve profits in future.

Originally published Nov 18, 2018, updated Feb 25, 2021

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