The document discusses the organizational structure, control systems, and evolution of Bharti Airtel, a leading telecommunications company. It provides details on Bharti Airtel's operations across 20 countries in Asia and Africa, and describes its business divisions and country operations. The document also summarizes Bharti Airtel's changes to a decentralized structure in 2011, separating its business units into B2C and B2B segments, and adopting international division and geographic area division structures. Finally, it outlines the company's governance structure and board members.

1. International Business
Organizational Structure, Control –
Early Experiences, Evolution of New Structure
and Performance.
IIM Students
Old and New Organization Structure and Control of AIRTEL

2. Agenda
1 Organizational Structure
2 Types of Organizational Structures
3 Control Systems
4 Evolution and Change in MNC
5 Organizational Change
6 Bharti Airtel

3. 1 Organizational Structure
2 Types of Organizational Structures
3 Control Systems
4 Evolution and Change in MNC
5 Organizational Change
6 Bharti Airtel
International Business

4. Organizational Structure
There is no permanent organization chart for the world. . . . It is of
supreme importance to be ready at all times to take advantage of
new opportunities.
-Robert C. Goizueta, (Former) Chairman and CEO, Coca-Cola Company
International Business

5. Organizational Structure
 Organization is defined by the formal structure, coordination and
control systems, and the organization culture.
 It’s the formal arrangement of roles, responsibilities and
relationships within an organization.
 It’s a powerful tool to implement strategy.
International Business

6. Vertical Differentiation
Centralization V/S Decentralization
 Vertical Integration: The issue of determining where in the
hierarchy, the authority to make decisions stand.
 Centralization is the degree to which high level
managers, usually above the country level, make strategic
decisions and pass them over to lower levels for
implementation.
 Decisions made at foreign subsidiary level are considered
decentralized, and those made at HQ are considered to be
centralized.
International Business

7. Horizontal Differentiation
The Design of the Formal Structure
Horizontal Differentiation: The way a co. designs its formal
structure to perform the following functions
 Specify the set of organizational tasks.
 Divide these tasks into jobs, departments, subsidiaries and
divisions to get the work done.
 Assign authority relationships to get the work done in a way that
supports co. strategy.
International Business

8. 1 Organizational Structure
2 Types of Organizational Structures
3 Control Systems
4 Evolution and Change in MNC
5 Organizational Change
6 Bharti Airtel
International Business

9. Types of Organizational Structures
 Functional Structure
 International Division Structure
 Product Division Structure
 Geographic (Area) Division Structure
 Matrix Division Structure
International Business

10. Functional Structure
 Specialized jobs are grouped according to
traditional business functions.
 Ideal for Co. having a narrow product CEO
line, sharing similar technology.
 Helps maximize economies of scale
Production Marketing
 Highly efficient.
India USA India USA
International Business

11. International division structure.
 Grouping each international business
activity into its own division.
 Creates a critical mass of international
expertise.
 Creates quick response to environmental CEO
changes enabling them to deal with
different markets.
 Prevents duplication of activities.
Aerospace
 Often struggles to get resources from Industrial Automotive
Electronics
International
Division Division Division
domestic divisions. Division
 This structure is suited for multi-domestic
strategies that demand little integration Diesel Electronics Brake
and standardization between domestic Company Company Company
(France) (France) (Mexico)
and foreign operations.
 Frustrates its ability to exploit economies
of scale.
International Business

12. Product Division Structure
 These are popular among international
companies with diverse products.
CEO
 Similar products are grouped under one
product head e.g. Perfumes and
Cosmetics, each focusing on a single
product segment for its global market. Power Systems Industry And
Group Defense Group
 Suited for a global strategy
Elevator Construction
 There may be duplicate functions and Electric Company Meter Company
Company Products
(Belgium) (Argentina)
activities among divisions. (Belgium) Company (Italy)
 No formal means by which one product
division can learn from another
international expertise.
International Business

13. Geographic (Area) Division Structure
 These are used when foreign operations
are large and not dominated by a single
country or region.
 Useful when managers can gain
economies of scale on a regional rather CEO
than on global basis.
 Drawback is the potential of duplication of Europe and North
work among areas as the company Latin America and
America Pacific
locates similar value activities in several Division Division
places rather than consolidating them in
the most efficient place. U.K. Venezuela Italy U.S. Japan Canada
International Business

14. Matrix Division Structure
CEO
 This tries simultaneously to deal with
competing pressures for global integration
and local responsiveness.
 Institutes overlaps among functional and
divisional forms.
 Gives functional, product, and geographic Textile Agricultural Europe-Africa
groups a common focus. Latin
Groups Products Group
 It makes each group share responsibility America
Group
for foreign operations and enables each Group
group exchange information and
resources more willingly.
 Drawbacks- Stop championing their
group’s unique needs, and thereby
eliminate the multiple knowledge-
generating and decision making
relationship that it is supposed to engage. U.K. Mexico
International Business

15. 1 Organizational Structure
2 Types of Organizational Structures
3 Control Systems
4 Evolution and Change in MNC
5 Organizational Change
6 Bharti Airtel
International Business

16. Control Systems
Control Organizational Strategy and Employees
Formal, target-setting, monitoring, evaluation and feedback
systems that provide managers with information about whether
the organization’s strategy and structure are working efficiently
and effectively.
International Business

17. Organizational Control
Managers monitor and regulate how efficiently and effectively
an organization and its members are performing the activities
necessary to achieve organizational goals
International Business

18. Control Methods
Market Control
 Use external market mechanisms to establish internal
performance benchmarks & standards
Bureaucratic Control
 Here company uses centralized authority to install rules and
procedures to power broad range of activities
Clan Control
 Shared values among employees to idealize the preferred
behavior
International Business

19. 1 Organizational Structure
2 Types of Organizational Structures
3 Control Systems
4 Evolution and Change in MNC
5 Organizational Change
6 Bharti Airtel
International Business

20. Evolution and Change in MNC
 Internationalization is the process by which a firm gradually changes in
response to international competition, domestic market saturation, and
the desire for expansion, new markets, and diversification.
 Structural Evolution (Stages Model) occurs when managers redesign the
organizational structure to optimize the strategy’s changes to
work, making changes in the firm’s tasks and relationships and
designating authority, responsibility, lines of communication, geographic
dispersal of units and so forth
International Business

21. Basic Organizational Structures
A number of basic structures exist that permit an MNC to compete
internationally
 Structure must meet the need of both the local market and
the home-office strategy of globalization
 Contingency approach
 Balances the need to respond quickly to local
conditions with the pressures for providing
products globally
 Most MNCs evolve through certain basic structural
arrangements in international operations
International Business

22. Organizational Structures
High
Pressure for globalization
Mixed and
Global Structural Transnational
Arrangements Structures
Initial Division
Low Structures International
Division Structures
Low High
Pressure for local responsiveness
Adapted from Figure 9–2: Organizational Consequences of Internationalization

23. 1 Organizational Structure
2 Types of Organizational Structures
3 Control Systems
4 Evolution and Change in MNC
5 Organizational Change
6 Bharti Airtel
International Business

24. Evolutionary and Revolutionary Change
Evolutionary change
 gradual, incremental, and narrowly focused
 constant attempt to improve, adapt, and adjust strategy and
structure incrementally to accommodate changes in the
environment
International Business

25. Evolutionary and Revolutionary Change
Revolutionary change
 Rapid, dramatic, and broadly focused
 Involves a bold attempt to quickly find ways to be effective
 Likely to result in a radical shift in ways of doing things, new
goals, and a new structure for the organization
International Business

26. Steps in the Organizational Change Process
International Business

27. Implementing the Change
Top Down Change
 A fast, revolutionary approach to change in which top
managers identify what needs to be changed and then
move quickly to implement the changes throughout the
organization.
International Business

28. Implementing the Change
Bottom-up change
 A gradual or evolutionary approach to change in which
managers at all levels work together to develop a detailed
plan for change.
International Business

29. 1 Organizational Structure
2 Types of Organizational Structures
3 Control Systems
4 Evolution and Change in MNC
5 Organizational Change
6 Bharti Airtel
International Business

30. Bharti Airtel
 Bharti Airtel Limited is a leading integrated telecommunications
company with operations in 20 countries across Asia and Africa.
 Headquartered in New Delhi, India, the company ranks
amongst the top 5 mobile service providers globally in terms of
subscribers.
 In India, the company's product offerings include 2G, 3G and
4G services, fixed line, high speed broadband through
DSL, IPTV, DTH, enterprise services including national &
international long distance services to carriers.
 In the rest of the geographies, it offers 2G, 3G mobile services.
Bharti Airtel had over 246 million customers across its
operations at the end of February 2012.
International Business

31. Background
International Business

32. Business Divisions
International Business

33. Bharti Airtel - Country Map
Source: Wikipedia
International Business

34. Bharti Airtel – Overseas Operations
Source: Wikipedia
International Business

35. Earlier Organization Structure
Functional Structure
International Business

36. Organization Structure After (August 1 2011)
 Through this new structure, the
company aims to decentralize
decision making and increase
accountability across all levels of
management.
 The new structure, separates the
business to business (B2B) and the
business to consumer (B2C)
segments.
 The B2C business unit (Headed by
K Srinivas) will service the retail
consumers, homes and small
offices, by combining the erstwhile
business units —
mobile, telemedia, digital TV, and
other emerging businesses.
DECENTRALIZED Structure:
 International Division Structure
International Business
 Geographic (Area) Division Structure

37. Organization Structure After Aug 1, 2011
 International Division Structure
 Geographic (Area) Division Structure
International Business

38. Organization Structure (South Asia) After August 1 2011
Market operations in India and South Asia is divided into three regions, each
headed by an operations director.
The north, east and Bangladesh operations is headed by Ajai Puri
The south and Sri Lanka operations by Vineet Taneja
Operations in the west is headed by Raghunath Mandava
(along with national distribution portfolio).
International Business

39. Governance Structure :
 The Group Chairman and M.D is responsible for providing strategic
direction, leadership and governance, leading transformational
initiatives, international strategic alliances besides effective management
of the Company with a focus on enhancing Bharti’s global image.
 The CEO(International) and joint M.D. is based in Nairobi, Kenya and
responsible for the overall business performance, management and
expansion of the international operations.
 He is also responsible for employee engagement, customer
satisfaction, outsourcing initiatives and the internal control metrics for the
international operations.
 The CEO ( India and south east Asia) heads south asia operations and is
responsible for overall business performance in this region. He is also
responsible for employee engagement, customer satisfaction, ensuring
success of outsourcing initiatives and improvements in the internal control
metrics for India and south asia operations.
International Business

40. Board Members:
 The Board of Directors of the Company has an optimum mix of
Executive and Non-Executive Directors, which consists of three
Executive and fifteen Non-Executive Directors.
 The Chairman and Managing Director, Mr. Sunil Bharti Mittal, is an
Executive Director and the number of Independent Directors on the
Board is 50% of the total Board strength.
 The independence of a Director is determined on the basis that such
director does not have any material pecuniary relationship with the
Company, its promoters or its management, which may affect the
independence of the judgment of a Director.
 The Board members possess requisite skills, experience and expertise
required to take decisions, which are in the best interest of the
Company
International Business

41. Organization Structure (South Asia) After August 1 2011 B
B.O.D BOARD OF
DIRECTORS :

42. Thank You
Thank You