Flat Organizational Structure – Term Paper

As past research shows, decentralization of organizational operations has multiple advantages such as empowering employees, ease of expansion, adequate preparation for emergencies, relieving the burden and more efficient decision making (Csaszar et al., 2012). The MTBSA is an exemplary example of how these advantages translate to increased efficiency.

As described in the literature review section of this paper, the Dabbawala employ a flat organizational structure that reduces operational costs while also empowering all the employees to perform at their best. The individual dabbawala’s monthly salary is based on the team’s performance in that month as the team earnings are shared equally among members (Roncaglia et al., 2013). Rather than having a hierarchical or mechanical organizational structure as is common in other supply chain and logistics companies, the dabbawalas manage themselves in respect to their customer acquisition, logistics, hiring, and conflict resolution. This helps the individual teams to keep costs low relative to their delivery line while also keeping the quality of service high. Since the Mukadams are usually well experienced in delivering dabbas in one or multiple lines, they are able to conduct performance evaluations and give constructive feedback to the other partners at regular intervals. These regular feedbacks facilitate the alignment of employee activities with the overarching organizational goals. Since each team leader is in charge of 20-35 dabbawalas, it reduces the load on their work as it is easier to maintain process visibility. All of the dabbawalas involved in the delivery process from source to destination are aware of what is happening at every step of the process. They understand that if a dabbawala misses a handoff or deadline, some people will miss their lunches. Since they are intimately aware of their consumer expectations, (every day food delivery on time), they work harder to make sure that they meet these expectations.

The decentralized organizational structure also allows for greater flexibility in hiring practices. When a person wants to join a dabbawala group, the group first assesses whether the current demand can sustain another person. New recruits, often from the villages of existing dabbawalas, are trained on the job where they learn to help in all activities in the organization (Thomke et al., 2012). They undergo a probationary period of six months after which they have the option to buy into the MTBSA for a sum that is ten times their expected monthly salary. Dabbawalas with more than 10 years’ experience serve as supervisors who are responsible for resolving supply issues, supervising collections, and resolving disputes between members.

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iii. Employee ownership

Another important factor in the dabbawala’s continued efficiency is the concept of the employees as partners rather than simply workers. In the beginning, the MTBSA employed a typical mechanical organizational structure that viewed employees as expendable much like modern corporations. However, it later changed to the current system of employee ownership and management as it enables them to innovate accordingly or respond fast to arising situations (Thomke et al., 2012). The various teams are all cooperative memberships assisting in achieving the overall organizational goals. Since each team serves one or multiple lines they can only deliver the dabbas if they all work together to form an efficient supply chain from source to destination. The aim of all dabbawalas is successful delivery of tiffins from the homes to the offices and back. This can only happen if all members involved in the whole process work together and understand the consequences that failure can have. Through promoting the sharing of responsibilities, each group is organized internally in such a way that if one of the dabbawalas is absent or has a problem, a colleague automatically replaces him. The replacement can even be a muqaddam, which also aids in fostering the sense of community. Therefore, the individual dabbawala teams manage their operations as efficiently as possible without interfering with the business of other teams since the success of each individual is dependent on the success of the organization as a whole and vice versa.

The organizational structure also nurtures cooperative competition where the groups compete amongst themselves to get additional customers in their delivery lines and cooperate with workers in other groups to increase profit. Each dabbawala is a full entrepreneur who has to negotiate prices with his own customers. However, the organization has governing committees who give guidelines on prices, which consider factors such as the distance between the client’s home and office and the office’s distance from the nearest railway station. Because the dabbawalas develop their own relationships with their clients and tend to work on the same line for years, these relationships develop into long-term trust relationships. The dabbawala teams do not have monopolies over particular areas with each dabbawala encouraged to search for new customers even in buildings already serviced by other colleagues. For example, since the competition is for tiffins, if a new customer would like to request tiffin delivery, they phone for a dabbawala and whoever gets there first gets to pick up tiffins from that particular client. However, the organization rules are such that once a dabbawala establishes a relationship with a client, the other dabbawalas are prohibited from soliciting business from the same customer. In the form of consumer relations, the dabbawalas spend their more flexible afternoons to interact with their clients, collect fees, and to share information about any upcoming changes. All of these factors tend to reinforce the role of the dabbawala as an entrepreneur who has control over the direction of the organization as having employees make decisions in their operations gives them a sense of importance and allows them to implement their own ideas for increased profit.

iv. Coding System

In order to convey information about a dabba’s source and destination, the dabbawalas utilize a simple coding system, which is outlined in detail in figure 3. The lid of the dabba has three markings showing the source, destination, and expected route. Each of these markings is unique to each line hence are impossible to forge as only the dabbawalas operating a particular line know and understand the markings currently under use. Based on common Indian religious alphabets, the markings are easy for the dabbawalas to understand and require little training.

4. 2 Dabbawala Strategy Analysis and Factors Constraining their Growth

4.2.1. Mumbai Urban Logistics

Mumbai, formerly Bombay, is the capital of the Indian state of Maharashtra. The city metropolis lies to the west coast of India that has a deep natural harbor. Mumbai is considered the financial hub of the capital of the country with an estimated population of over 16 million and generating 6% of the total country’s GDP. As of 2009, the city’s GDP per capita was Rs. 128,000 which is triple the national average (Thomke et al., 2010). Since colonial times, the city’s spatial development has mainly followed a mono-centric and linear pattern of growth where commercial activity is concentrated in the southern edge of the city with the residential and industrial developments spreading along the suburban rail corridors. 

Transport in Mumbai is handled through the road, train, and water transport modes. Over 85% of all Mumbai commuters and a smaller percentage of goods move transported through public transport (buses and suburban trains) since it is convenient, cheap, and efficient for most of the population who cannot afford a car (Baindur et al., 2013). Among India’s major cities, Mumbai has the most extensive rail network. The city has two zonal railways with the first one beginning from Churchgate station to Virar while the central railway runs from Chatrapati terminus and extends eastwards 100km to Karjat and 120km North-eastwards to Kasara (Baindur et al., 2013). This rail system provides a reliable and low-cost way of traversing the city from one end to the other. The city’s streets have diverse users employing slow, medium, and fast, motorized and non-motorized vehicles. As with many other cities that have experienced rapid population growth in recent decades, urban transport of people and goods becomes more and more of a challenge as the demand increases on the existing infrastructure. Due to the high road traffic density during peak hours in some areas of Mumbai such as Bandra, Sion, and Dadar, the average speeds slow down to about 6 km/h (Tyagi, et al., 2015, p.247). This is mainly due to the inadequate capacity of the existing connecting roads from the central business district to the rest of the city’s metropolitan areas. This problem is compounded by the frequent and unplanned digging of roads by utility companies as they lay their utility lines. This leaves the roads in a poor condition rendering them unreliable in implementing an efficient supply chain system. This leaves only the rail option for the Dabbawalas.