What is organorganization design?

Organization design" can be defined narrowly, as the process of reshaping

organization structure and roles, or it can more effectively be defined as the alignment
of structure, process, rewards, metrics and talent with the strategy of the business

• The formal system of task and reporting relationships that controls,

coordinates, and motivates employees so that they cooperate and work
together to achieve an organization’s goals.
• Definition: The process of defining and coordinating organizational structure
elements. This is an architectural task.
• Purpose: To create a design that will coordinate organizational tasks &
motivate people to achieve objectives.
• Challenge: To choose appropriate levels and types of vertical and horizontal
differentiation and integration.

Trends in organizational design

 Organizations are becoming flatter with fewer levels of management.
 Organizations are increasing decentralization and reducing staff.
 Organizations are increasing delegation and empowerment.
 Organizations are becoming more horizontal and adaptive.
 Organizations are using multiple means of subsystems integration.
 Organizations are reengineering work processes for greater efficiency.
Impact of design and structure
 Physical appearance of organization
 Nature of jobs
 Efficiency of organization
 Effectiveness of organization
 Relationships with other organizations
 Nature and quality of work experience for organizational members
 Organizational culture


Managers select and manage components and dimensions of

(a) organizational structure
(b) organizational culture to achieve organizational goals.
 • The formal system of task and reporting relationships that controls,
coordinates, and motivates employees so that they cooperate and work
together to achieve an organization’s goals.
• The informal set of values and norms that controls the way people and groups
in an organization interact with each other and with people outside the
organization.

Organizational structure
Challenges
 Authority
 Control
 Sub-units
 Vertical differentiation

 Horizontal differentiation
 Integration
 Centralization
 Formalization

 Structural characteristics associated with design alternatives:

– Goal  predictability versus adaptability.
– Authority  centralized versus decentralized.
– Rules and procedures  many versus few.
– Spans of control  narrow versus wide.
– Tasks  specialized versus shared.
 – Teams and task forces  few versus many.
– Coordination  formal and impersonal versus informal and personal.

 Decentralization
 Top management allows lower levels to make many decisions
 Empowerment
 Gives people the freedom to do their jobs as they think best
 Delegation
 The process of entrusting work to others
 Decentralization
 Top management allows lower levels to make many decisions
 Empowerment
 Gives people the freedom to do their jobs as they think best
 Delegation
 The process of entrusting work to others

 Decentralization
 Top management allows lower levels to make many decisions
 Empowerment
 Gives people the freedom to do their jobs as they think best
 Delegation
 The process of entrusting work to others

 Differentiation
• The degree of difference between subsystems in an organization
 Integration
• The level of coordination between subsystems in an organization
 Process Reengineering
• Increase operating efficiency by reducing unnecessary work steps and
streamlining work processes.

Characteristics of Successful and Strong Organizational Cultures

Emphasize teamwork.
• Allow and support risk taking.
• Encourage innovation.
• Make well-being of people a top management priority.
• Strong cultures are clear, well defined, and widely shared
among
members.