Chapter 1: Introduction

Organization design is the deliberate process of configuring structures, processes, reward

systems, and people practices to create an effective organization capable of achieving the
business strategy. The organization is not an end in itself; it is simply a vehicle for
accomplishing the strategic tasks of the business. Good organizational structure and design
helps improve communication, increase productivity, and inspire innovation. A poorly-
designed organization creates barriers and frustrations for people both inside and outside
the organization.

A well-designed organization helps everyone in the business do her or his job effectively.
It creates an environment where people can work effectively. Most productivity and
performance issues can be attributed to poor organizational design. Poor organizational
design often results in, among other things, confusion within roles, a lack of coordination
among functions, and failure to share ideas. A company can have a clear mission, talented
people, and great leaders, and still not perform well because of poor organizational design.
Organizational design and development is the process of organizing people within a
structure that will support the mission, goals and activities of an organization in order
to operate more efficiently and effectively. It is the process that helps to efficiently
and effectively aligning organizational resources in the direction of the organizations
goals, and prepares the organizations people to perform effectively within the new
structure.

To be effective, the overall organization design must be aligned with the business strategy
and the market environment in which the business operates. It must also have the
right business controls, the right flexibility, the right incentives, the right people, and the
right resources.

With ever-changing expectations of consumers across a global market, private and public
agencies, businesses, and groups are finding more and more value in strategically
approaching organizational design.

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Company Overview:

Epyllion Group started its journey as a house of Readymade Garments (RMG) engaged in
manufacturing and exporting of Knit Apparels since 1994 and has been considered today
as one of the biggest conglomerates with substantial establishment of its backward linkage
of all kinds of knit garments, textile, wet processing & garments accessories.

It has the state of art vertically integrated garments manufacturing facility which ensures
one stop service to the buyers. They have established themselves as an important garments
manufacturer for a number of renowned brand apparels of Europe, USA, Asia & Africa.

For the greater commitment & care - Epyllion Group always plays a significant role in its
every activity by protecting environment and has earned an iconic image among the green
corporate houses. These achievements prevailing due to the personnel of the Epyllion
Group are placed at their right positions according to their caliber and inspiration

Vision of Epyllion Group:

The vision of Epyllion group is-

Our vision is to become a window through which all our interacting parties can see and
feel their prospect and dream about their success. Epyllion will become a lifestyle towards
its employees, suppliers, buyers and above all shall become a role model of a green
corporate house which will be regarded as an icon brand in the country.

Mission of Epyllion Group:

The Mission of Epyllion group is-

Epyllion will be known as an entity whose main driven force is its human resources. With
such a motivated, high skilled and professional workforce, Epyllion has started marching
towards its glory of success which is not the profit but to enjoy the joy of life.

The company is renowned for its high quality products and efficient management.
Epyllion exports to more than 10 countries, including Germany, the UK, the Netherlands,
Sweden, France, the USA, Mexico and India.

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Business Units:

Epyllion divides its business into five main categories.

Garments

Food & Bevarage

Retail Business
Real State
Backward Linkage
Dekko Textile unit Nina Holdings Epyllion Food Epyllion
Knitwears Epyllion Limited [NHL] & Beverage Holdings
Limited [DKL] Knitex Limited Limited
Mirabella Limited [EKL] [EFBL] [EHL]
Dresses Testing
Limited Laboratory
[MDL] Epyllion
Epyllion Testing Lab
Knitwears Limited [ETLL]
Limited Washing Unit
[EKWL]
Epyllion
Epyllion Style Washing Unit
Limited [ESL] [EWL]
Accessory
Unit
Epyllion
Limited [EPL]
-Accessory
Hub

Major Clients:

Some of the major clients of Epyllion Group are-

C&A
G-star
Celio
Marks & Spencer
H&M
Esprit

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 Chapter 2: Professional Research

Literature Review:

Organizational design serves as the foundation on which all company operations are built,
including such vital factors as the grouping of employees within different departments and
the formal managerial hierarchies within a company. Savvy early stage organizational
design choices can create a foundation for success, allowing an organization to develop a
strong company culture, grow in response to increasing demand and adapt to changes in
the marketplace.

Organizational Design:

Organizational design is the process of aligning the structure of an organization with its
objectives, with the ultimate aim of improving efficiency and effectiveness. Work can be
triggered by the need to improve service delivery or specific business processes, or as a
result of a new mandate.
More than designing a structure, it involves:
Understanding the imperative for change and the environment
Understanding the business processes, workflows, roles and responsibilities,
volumes of work, activity analysis and resources
Designing and testing new models or structures
Planning and managing the transition from the old structure to the new
Implementing and monitoring the change

Definition & Purpose of Organizational Design:

Organizations are composed of deliberately selected and deselected people who coordinate
their efforts toward a specific goal (Etzioni, 1964). The ultimate purpose of an
organization is to achieve a specific goal or mission. The people selected (whether self-
selected or chosen) and deselected are significant in some manner that helps the
organization achieve the desired goal.

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Organizational design centers on the organizations human resource needs to achieve the
organizations specific goal. Organizational design answers the question,

What is the best organizational structure? and has two objectives:

1. To facilitate the flow of information within the organization.

2. To integrate organizational behavior across different parts of the organization so the

behavior is coordinated (Duncan, 1979; see also Stanford, 2007 for a similar definition).

Organizational structure and its connection to strategy are core components of the
organizational design process.

The purpose of organization design is to create an organizational context that encourages

or shapes the optimal behaviors that will enhance company performance.

Right Organization Design and Business Success:

Strong organization design can help organizations become more nimble and better able to
deal with the complexities of todays marketplace. Organizational design ultimately
affects how a company executes strategy and goes to market, how it engages its

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employees, and how it responds to change. Organizations should be designed to answer
crucial questions such as:

How can we translate our strategic objectives into organizational requirements?

How can we align accountabilities with our organizations configuration?
To what extent can productivity be improved?
How can we sustain growth?
How should we manage organizational complexity to create value and achieve
competitive advantage without creating excessive complicatedness?

Smart organization design goes beyond structure to look at other organizational enablers
in a systematic way and make choices around important elements. Structure should help
drive employee focus on strategic imperatives. Roles and responsibilities should be used to
define mission-critical accountabilities, KPIs, and decision rights to facilitate execution.
Individual capabilities should be reviewed to ensure the right talent is in the right roles.
And other organizational enablers such as performance and talent management should be
aligned with required behaviors.

Companies must consider more than just structure to change the culture and context of an
organization. Organizations should also evaluate roles and responsibilities (such as
business and support processes), people capabilities (matching capabilities with role
requirements), and enablers (performance management and incentives).

The right organization design is a critical part of a companys performance, but most
reorganization efforts fail. Some major befits of right organizational design which will
ultimately result in business success are-

Company Leadership

Organizational design influences the leadership structure of a

company, setting forth reporting relationships and lines of authority
reaching from the executive level to the front line. It is important to
have a clear map of managerial responsibility and accountability to
keep the company running smoothly. Without clear lines of
authority, employees in different areas of the company can become

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misguided or confused, while others find themselves with an unnecessarily high level of
supervision.

Company Culture

The leadership structure put in place by organizational-design choices can have a direct
and lasting effect on company culture. The grouping of employees in various departments
and the managerial hierarchy influences the way employees interact with each other on the
job. Organizational design can influence the degree to which front-line employees are
allowed to solve complex problems on their own rather than involving a manager.

Future Growth

Organizational design choices made in the early stages of a business can either help or
hinder growth plans. Organizational designs built to easily accommodate new managers
and employees at different levels of the organization can add new positions without
making significant structural changes. A company that locates all employees in a small
office, on the other hand, must acquire new office space or expand their current office to
take on new employees.

Adaptability

Organizational design choices can develop distinct competitive advantages. Savvy

business owners continually monitor changes in their industries and markets, looking for
opportunities to adapt and develop new competitive advantages. Companies with taller
organizational structures and complicated
bureaucracies can find it difficult to adapt to
changing market conditions, such as a growing
use of lean business models or outsourcing in
the industry. Companies with less complex
organizational structures can find it easier to
shift employees around, rework managerial
hierarchies and redesign job descriptions for existing employees, all of which can increase
efficiency or productivity in response to outside pressures.

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 Chapter 3: Methodology

To prepare this report we use both primary data and secondary data.

Primary data was collected by interviewing the Deputy General Manager- HR, Admin &
CSR of Epyllion Group. He provides all necessary information which helps us to know
more about the organizations structure and design. Secondary data includes

Internet
Newspaper
Annual Report of Epyllion Group
Articles

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 Chapter 4: Data Findings, Analysis & Interpretation

HR Overview of Epyllion:

"Epyllion Group is known as an entity whose main driven force is its human spirit."
-Reaz Uddin Al-Mamoon, Managing Director of Epyllion Group

Epyllion Group within a brief time of its inception in 1994 secured a remarkable position
in the emerging industry of Ready Made Garments. Within the framework of the group,
human resource plays a vital role in its success. They start with only 2 sewing lines and
total of 200 workforces at Mirpur in Dhaka. Epyllion Group has new swelled up with
nearly 8000 skilled and semi skilled workers with 54 sewing lines in several locations of
Dhaka and Gazipur.

Epyllion follows The Bangladesh Labor Act 2013 for their Human Resource
Management practice in the entire organization. They have their own customized HRM
policies and practices but all of their HRM policies are set according to the standard taken
from Bangladesh Labor Act 2013.

Epyllion group has divided its Human Resource Management process into two categories.

Factory Based HRM for all the Manufacturing Plants

Corporate HRM for Management employees

Board and Management:

The overall management of the group is segregated into Executive Board Members &
Management Committee (MANCOM). The Executive Board Members are involved in the
policy matters & decision making. The MANCOM comprises of 15 top Executives is
responsible to construct strategic planning and to review the implementations. They also
keep their eyes on integrity of the overall management both at corporate and sub-business
units. This team ensures that all the personnel of the group are at ease in their well beings.

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Organization Structure of Epyllion:

The management of Epyllion group is vested with a team of professionals under direct
supervision of the Managing Director, Director, and Departmental Heads for each section.

Epyllion Group

Chairman

Managing
Director

Director

Management
Committee

Head of
Head of Head of Head of Head of HR,
Accounts &
Operation Marketing Commercial Admin & CSR
Finance

1. Production 1. HR
1. Accounts 2. IE 1. Marketing 1. Commercial 2. Admin
2. Finance 3. Quality 2. merchandising 2. C&F 3. CSR
4.Maintenance 4. Security

Figure: Organogram of Epyllion Group

From the Organogram of Epyllion group we can see they have Tall Organizations
Structure. A tall organizational structure has multiple layers of management between the
executives and the floor or front line employees. The long chain of command runs from

10
the top down. The larger the organization is, the taller the hierarchy grows and the more
complex the movement of information between the layers becomes.

The pros of tall structures lie in clarity and managerial control. The narrow span of control
allows for close supervision of employees. Tall structures provide clear, distinct layers
with obvious lines of responsibility and control and a clear promotion structure.
Challenges begin when a structure gets too tall. Communication begins to take too long to
travel through all the levels. These communication problems hamper decision-making and
hinder progress.

In Epyllion RMG workers are their main human capital as it is a large production oriented
organization with lots of manufacturing plant. To deal with Garment workers, Epyllion
need to follow the Tall organizations structure. But this structure is more expensive and
communication gap is a major problem in this structure.

Organization Design of Epyllion:

The Organization design of Epyllion falls under System 1 and System 3. Epyllion is
following a mixture of Bureaucratic model of organization and H-Form Organization.
Bureaucratic model is an ideal approach to structuring organizations based on a rational
set of guidelines and procedures. The main characteristics of this model are Clear division
of labor, consistent rules, hierarchy of positions, impersonality, and employment and
advancement based on technical
expertise. This model enhances
efficiency, logic, and rationality in
large organizations like Epyllion. On
the other hand this lead to inflexibility
and rigidity, which slow decision
making and create a general inability
to respond to rapid changes or crises.

The H-form organization (H stands

for hybrid), sometimes called a
conglomerate, relies loosely on

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product departmentalization with the various products constituting different businesses.
The H-form design is used to implement a strategy of unrelated diversification. The main
advantages are H-form design allows the organization to protect itself from cyclical
fluctuations in a single industry, and the organization can buy and sell its individual
businesses with little or no disruption to those that remain. On the negative side the typical
H-form organization is likely to achieve only average-to-weak financial performance.

Epyllion has different unrelated business like Garments, Real Estate, Food & Beverage,
and Retail Business etc. Their organization design falls under H-Form organization as
well.

Most organizations use designs that are hybrids of the organization designs or we can say
mixture of designs. The key point to remember is that there is no one best designs for all
organizations.

Each organization has to review its own strategy, strengths and weaknesses, history,
technology, environment, life cycle, and size: choose a design to accommodate those
elements; and tailor the design to fit its own particular needs. According to the mission,
vision, goals, values and strategy Epyllion set its organization design.

Decentralized Management System:

A group of experienced senior professionals are running the group. The overall operation
is segregated into corporate office and factory office, where the corporate office has
eleven departments and the factory office is broadly divided into four business
processions. The specific policy & procedure regarding different operational issues and
reporting system followed by the management eventually help to ensure proper
coordination among decentralized management system. The Group also has separately
formed Internal Audit Department to ensure proper implementation of policies &
procedures and to keep the irregularities at minimum.

Apart from structured management policy & procedure the IT infrastructure along with
easy and quick flow of information assists the management to monitor all its activities
effectively and efficiently. The IT department is separated into programming

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implementation and support service unit. All the associated companies of the Group are
facilitated with both procured and in-house developed software for smooth function of
business planning & monitoring, finance & accounts, supply chain, inventory
management, human resources, administration, CSR along with all manufacturing
activities. The Group has installed UK based planning software Fast React, which helps to
certain integrated business planning for well-timed production of each step of supply chain
without any delay.

Epyllion Group also has separately formed Internal Audit Department to ensure proper
implementation of policies & procedures and to keep the irregularities at low.

Departmentalization:

Departmentalization refers to the formal structure of the organization, composed of

various departments and managerial positions and their relationships to each other.
As an organization grows, its departments grow and more sub-units are created, which in
turn add more levels of management.

In Epyllion the all operation divided into department and they decentralized their work so
that more specific outcomes come from each department. Whenever necessary additional
managers are employed and assigned for the work. Though they follow the
departmentalization process they have some failure and that is its makes the work more
slow and bureaucratic. Employee only thinks about their own department which conflicted
with their organizational goal. And another and most important problem is its quite
difficult to monitor individuals work. This often creates less flexibility, adaptability, and
units of action within the firm.

Organizational Culture of Epyllion:

Organizational culture is a system of shared assumptions, values, and beliefs, which

governs how people behave in organizations.

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These shared values have a strong influence on the people in the organization and dictate
how they dress, act, and perform their jobs.

Some major organizational culture of Epyllion are-

Sharing Attitude: By the shared inner spirit of Epyllion Board Members &
Executives the impossibilities of plans are over empowered and turns into
possibilities. The seniors keep a sharing attitude across the units to ensure that each
of the employees are highly motivated and engaged to see him or herself into the
big picture and contributes accordingly.

Strong Client Bonding: The group believes that it is not only to produce and
deliver high quality, reliable safe goods and services to the clients, but also to give
them the sense of trust which builds a strong bondage among us.

Developing Leadership skills: Every individual who wants to be a corporate high

level executive must be a leader. The key to truly effective leadership lies in
mastering a wide range of skills from implementing and administrating processes
to inspiring others to achieve excellence. In Epyllion everyone who works for it,
gets ample opportunities to become a leader & a high level corporate executive by
the very nature of its day to day working procedures.

Teamwork: By the teamwork of highly inspired and skilled personnel, Epyllion

group is sustaining and will prolong the vision & mission to remain for all those
who are connected to it; as the source through which dreams come true. With such
a motivated, highly skilled and professional workforce Epyllion has started
marching towards its glory of success which is not the profit but to enjoy the joy o f
life.

Outsourcing in Epyllion:

Epyllion is now only outsourcing their insurance policy of the employee as they consider
its not a routine job of HR department. They have future plan to outsource the recruiting
process.

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Change Management in Epyllion:

Change is the single most important element of successful business management today. To
remain competitive in increasingly aggressive market, one has to have the positive attitude
to change. In the Epyllion Group they always clearly explain the techniques for planning
and implementing changes, which maximize their potential gain. Epyllion achieve the best
from its personnel by using their strengths and involving them at all stages. Managing
changes keeps Epyllion to be one step ahead of its competitors.

From the beginning of Epyllions journey, the Management is continuously bringing

change in their business. In last 17 years they add different business in regularly. They
diversified their business in each year. From a small garments manufacturer to a business
conglomerates now, the journey was not easy. But to be competitive in the market, to
become sustainable, Epyllion believes in continuous changing process. In early 2000s
they introduces their backward linkage of Textile and Accessory. In the year 2015,
Epyllion introduce its Retail Fashion Brand named Sailor. Some major spotlights from
Eoyllions last 5 years operations are-

Integrated Business Planning & Monitoring

Introduction of major HR policies in terms of equal employment opportunity
Talent Management Development Squad
Evaluate through KPI
Formation of central planning, and introduce FastReact software as planning tool
Making quality independent to assure AQL
IT sophisticated employee base
Steps towards the vertical integration
Building up the whole operation under one supply chain through effective ERP.

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 Chapter 5: Conclusion and Recommendations

Conclusion:

A well-designed organization helps everyone in the business do her or his job effectively.
It creates an environment where people can work effectively. Epyllion is one of the
business conglomerates of Bangladesh. The performance, productivity and overall
business success of Epyllion is highly depended on its organizational design. We know
most productivity and performance issues can be attributed to poor organizational design.
Poor organizational design often results in, among other things, confusion within roles, a
lack of coordination among functions, and failure to share ideas. A company can have a
clear mission, talented people, and great leaders, and still not perform well because of
poor organizational design. To be effective, the overall organization design of Epyllion
must be aligned with its business strategy and the market environment in which
they operates. Epyllion must also have the right business controls, the right flexibility, the
right incentives, the right people, and the right resources. The success and growths of
Epyllion group indicates that they have a good organization design but with ever-changing
business nature and high competition, Epyllion need to establish modern Organization
Design.

16
Recommendation:
Although Epyllion has good business growth with some major milestone but there are
some area where they need to give attention to have sustainability and competitive
advantage. Epyllion may consider redesigning some major part of their organization as
business environment changes rapidly and organization design in an ongoing process. Our
recommendations are-

1. Introduce Flat Structure: Epyllion is now following Tall organization structure

which will be a weak point in near future as the nature of business is rapidly
changing. Epyllion should introduce Flat organization structure as this lead to
higher levels of employee morale and productivity. A tall structure is more formal,
bureaucratic organization or mechanistic system, numerous levels become
involved in daily operations, and decision-making tends to be more impersonal. It
also expensive because of the number of managers involvement. On the other
hand, Flat Organization structure will give Epyllion more administrative
responsibility for relatively few managers and communication chain will be shorter
and will be free from hierarchical control. The flat structure also reduces cost as a
lesser number of executives are required.

2. Distributing Authority: Everyone in the organization, from top to bottom must

need to have some level of authority. Distributing Authority is an important
building block in structuring organizations. Authority in organization is the right in
a position and, through it, the right of the person occupying the position to exercise
discretion in making decisions affecting others. Authority is power that has been
legitimized by the organization. Distributing authority in organization means;
giving decision power to employees. Epyllion needs to give decision making
authority to employees from top to bottom. Especially to front line employees as
they are the one who deal with customer, clients, supplier etc. This will bring more
sense of responsibility among employees for the organization.

3. Outsourcing: Successful businesses do what they do best in-house and outsource

the rest to third parties who specializes in those operations. Outsourcing is being
used by businesses all over the world to reduce their cost of doing business.

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 However, cost-cutting is not the only benefit of outsourcing or the only reason why
businesses seek strategic outsourcing partner(s). When done right, outsourcing
helps businesses improve the efficiency and quality of their all business operations,
allow them to generate better customer solutions, improve their ability to plan and
implement new strategies and initiatives, and generate more profits.

HR outsourcing is the process of sub-contracting human resource functions to an

external supplier. Epyllion need to focus on outsourcing some of its HR functions
like recruitment and selection; employee assistance and counseling services;
temporary staffing etc. there are numerous benefits in HR outsourcing. Some of the
benefits are cost saving, efficiency, employee development, chance to work with
experts, allow the organization to focus more on its core business and strategy.

4. Emphasis on IT: Information technology drives innovation and innovation is the

path to business success. By using advance IT system the nature of business is
changing rapidly. Epyllion should give more emphasis on its IT division to cope up
with the rapid business changes. IT is a blessing as it helps to share information,
connect with the worlds, customer, vendor, and supplier easily. Establishment of
various software, for example, modern HR software for Payroll, Performance
Appraisal; will bring more business success for Epyllion.

5. Motivation & Reward: Epyllion need to emphasis on its reward system to

motivate employees to perform better. They should motivate continuously to retain
the good employee in the organization and reduce turnover. Epyllion also need to
give more importance in Training and development program.

6. Build a Learning Organization Culture: In todays competitive, rapidly

evolving global marketplace, the only way to develop and sustain a competitive
advantage is to create a learning organization. To stay relevant, companies can
no longer rely on traditional competitive advantages like location, capital or
product. Instead, they must transform themselves into learning organizations.
Learning organization means, organizations where people continually expand their
capacity to create the results they truly desire, where new and expansive patterns of
thinking are nurtured, where collective aspiration is set free, and where people are

18
continually learning how to learn together. Its a never ending process. Every day,
everybody must learn something. As the world is changing day by day, each
generation has to adapt and make changes in a very limited time. Thus continuous
learning is essential for survival and success in today's world. Technological
change is having a tremendous impact on all our lives. Today, society is far more
sophisticated than the world in the earlier days.

Epyllion should build a learning organization culture because a learning

organization is entirely different from a traditional organization as it has the
capacity to make changes continuously. Epyllion need to give importance of team
learning as team learning helps employees improve collaboration, communication
and co-operation, as well as view other organizational members as learning
resources. Also self initiated learning culture needs to be established.

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