Essay on Ob

Organizational Behaviour II

Essay

Sandhosh Kumar – E8

Background

My firm is an investment bank with over 20,000 employees. The firm’s hierarchy is quite flat i.e. 5 levels starting from Analysts AVP VP Director Managing Director and the hierarchy is aligned according to the departments (functionally aligned). The functional departments at a high level can be split into infrastructure and core front office businesses. In the firm, infrastructure departments serve each other or the front office core businesses. In this particular case, I would like to talk about an example of a relationship between the IT department and the Finance department where I worked. I was a VP in the finance department however the problem was prevalent across all departments.

Problem

The key issue is around how the organization is structured (grouped) against how the department’s work is linked. The current incentive alignment is more towards the group and less towards the actual activity of the firm leading to wastage of resources and inefficiencies. The diagram below provides a rough idea of the organizational structure of the two departments under discussion:

Green line represents department reporting – 5% to 10% interaction

Red line represents cross-functional work – 90% to 95% interaction

In my firm although most interactions for the infrastructure department are cross functional and usually have a client-supplier relationship, unfortunately all performance evaluations, objective settings and budget management happens top down within each of the departments. Also, performance evaluations are quite subjective based on how well the objectives were met and in reality there is little interaction with the client base, in this case the finance clients.

Firstly, this caused a huge mismatch between the real objectives of the clients (finance) and the drive of the suppliers (IT). Thus, this affected how the IT budget was spent on Finance projects and was controlled...