Interview with Azim Premji
Knowledge.whaton.upenn.edu:April 20, 2006 Azim Premji, owns more than 80 per cent of Bangalore-based Wipro, India's third largest software exporter, which had annual revenues of US `$1.8` billion in 2005. Forbes magazine reckons that his net worth exceeds US `$13` billion, and it places him at No. 25 in its most recent ranking of the world's richest people.
Premji speaks with Ravi Aron, a professor of operations and information management at Wharton about Wipro's reorganisation.
Aron: After Vivek Paul [Wipro's former CEO] left the company last year, you made radical changes in your organisational structure. How did they affect your markets and your vision for where Wipro is going?
Premji : The most important thing you must appreciate is that, with the reorganisation, we tried to bring Wipro's leadership closer to the costomer. In the process, we tried to de-layer the organisation and empower our business leaders. That is why we removed an entire layer which was there previously, Our executives are seasoned enough in their jobs and they have performed long enough in their roles to be confident that they can deliver results through the new structure.
Aron: As part of your new structure, have you started redefining the organisation with P&L responsibility at the level of the vertical? [Editor's note: Wipro's vertical structure divided the company into units such as Telecom Servise Providers, Product Engineering Solutions, Finance Solutions, and Enterpricse Solutions.
These units further cater to industries such as banking, insurance, securities, and so on.
Premji : Noi. Each vertical is like a self-contained business. It is like a mid-sized company even by U.S. Standards, because each vertical generates about `$300` million in annual revenues. Though they work under a common structure, with resources such as Finance, HR, Quallity and Marketing, each vertical has people who represent these functions. So, in effect, each vertical is like a separate company.
Aron : Does that mean you intend to delegate more authority and responsibility to these self-contained companies? ltbr. Premji : Absolutely.
Aron : What is your thinking behind this?
Premji : It all goes back to leadership. It speeds things up and gets decision made faster. It empowers people more, and it allows them to further empower those who report to them, because their jobs have suddenly become much more responsible.
How is this structure different from functional structure?

Explanation

Difference between functional and divisional structure