Organizational Design
Key Concepts of Organizational Design
Today’s businesses face many challenges which affect survival as an outcome of continuous shifts in the business world. Companies realize the previously strong centralized bureaucracies affiliated with hierarchies that controlled the enterprise are out-of-date and take the place of learning environments which allows staff to express new and creative ideas to the business. Organizational design is a method enhancing an organization towards success. The notion of organizational design is a major part of building patterns in today’s businesses.
�Organizational design involves two complementary problems: (1) how to partition a big task of the whole organization into smaller tasks of the subunits; and (2) how to coordinate these smaller subunit tasks so that they fit together to efficiently realize the bigger task or organizational goals. By complementary, we mean that the smaller tasks must be defined and arranged in a way that allows effective coordination. We consider these issues for �older,” classic organizational forms as well as �newer,” modern organizational forms (Burton, Desanctis & Obel, 2006).”
Importance of Organizational Design Choices
The importance of organizational design choices provide the company with obtainable results. Satisfactory organizational design increases communications, productivity, and innovation. It establishes an arena for personnel to perform work relates task effectually. Numerous works related problems such as productivity or performance issues are traceable to improper organization design. A company can have an impressive business, impressive personnel and management team and still perform poorly because of improper organizational design.
The significance of organizational design topics should not be second guessed. An overly achieving company realistically is more substantial considering the lack of expertise and the substantially combative arena. Corporate advances are necessary for radically superior ranking of target client, concentrate on cause and aptitude subjects through selection, teaching and incentives, but also through seamless customer experiences. Communication methods, interdepartmental connections, visions, and team makeup are among the items that affect client, workers, and others in the organization.
Organizational Structures
Many type of organization exist in today’s business world. The structures differ by number of employees, organizational scope, and company mission. Organizational structure defines who is responsible for a task, how and when the task is performed as it relates to the company’s business goals.
Different businesses have different types of structures. Each structure has advantages and disadvantages. �Differentiation is the grouping of people and tasks into functions and divisions to produce goods and services (Mohrman, 2007).” The role of differentiation is two or more persons performing the same task or performs the same job function. As a company grows and subdivides into various divisions, the company usually differentiates into further divisions. As the company develops into an organizational structure, management has to decide how to group the company’s processes into like areas and still meet the company goals.
The functional structure is groups of employees who have similar jobs in the company, perform similar job functions, or have the same types of job skills. The functional structure allows for the separation of work and specialization in the company to become efficacious. The advantages of functional structure are: ease of communication within the organization, make quick and effective decisions and learn from each other. The disadvantages of functional structure are: serve the needs of all products and services, coordination and serving the needs of all the regions the business serves.
The matrix structure is a composite form that organizations use to lead business functions at the same time the company groups people in two methods. The methods include function performed and the product the personnel are working on. Persons working in this type of atmosphere have two managers to report to – the product manager and the functional manager. Advantages of the matrix structure: increases product development, increases communication between teams and members, increases innovation and creativity, increases low level problem resolutions, allows for team membership changes on a regular basis and the matrix allows for employee freedom to be responsible for his or her work tasks. The disadvantages of matrix structure are: increase in role conflicts, high stress levels, and limited job promotions.
Integration structures allow for flat and tall hierarchies. Tall companies have multiple levels of hierarch relative to their size, flat companies have few levels. As a company becomes too tall communication and decision making problems start to become prevalent. Communications become distorted and slow as it transcends the levels of management. To combat the communications distortion and slow problem resolutions, companies may introduce a decentralizing authority.
The decentralizing authority allows managers at all levels to make decisions. A centralized organization allows only the top level managers to make decisions. The advantages of decentralized management is communication and decision making not having to go up the corporate ladder for a final approval of the decision and allows for greater job responsibility and increase in job motivation.
Mutual adjustment involves ongoing communications among the different levels of employees to achieve the company’s goals. Mutual adjustment enables a company to run smoothly, and managers must be on board to allow for information to flow freely among the various departments. A company must integrate mechanisms that allow mutual adjustment and make adjustments easy for management and personnel to meet and coordinate their tasks across the different departments.
The third structure and organization may use to coordinate their work flow through the various departments is standardization -�the development of routine responses to recurring problems or opportunities that specify how individual and functions are to coordinate their actions to accomplish organizational goals (Mohrman, 2007).” Standardization allows for standard input and output processes. Standardization requires formalization which is the rules and standard operating procedures to coordinate a company’s work flow. The disadvantages of standardization are: excessive formalization which hinders personnel from being creative and flexible to new ideas, employees obey rules without thinking out the consequences, and too much emphasis on existing rules and performance guidelines which makes it hard to create new rules
Strategy, Structure, and Process in Organizations
To determine future needs, the existing organization needs to be assessed in terms of effectiveness and efficiency. This must be done objectively or change simply for the sake of change will occur. At the same time looking at current priorities and the needs for the future must be taken into account. Normally, this requires a complete organizational audit or review of the structure, people and manner in which the business is done. This need not be lengthy, bureaucratic or excessive. But the facts need to be placed out in the open followed by an objective pros and cons analysis.
Many organizational change processes do not consider the following two major aspects:
Identification of existing organizational synergies across company boundaries, and Cultural implications of any changes Done with these in mind the redesign exercise should take into account any major obstacles which could affect transition. With all this prep, an effective process should allow for a number of organizational options to emerge and be considered. Each option should include the following: Ability to implement the strategy, Clear function definitions, Role alignment within each function and across each functional group, Clear role definition in terms of a job profile.
Organizational Design and Decision-Making Processes
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Conclusion
Managing talent for growth is a critical but not sufficient contribution. The ability to optimize the talent strategy of the firm, as all the other elements required to effectively implement a business strategy, are in a profound interdependence with how the organization is designed to function. To contribute to the growth agenda, HR must quickly expand it’s domain of influence by becoming proficient and able to contribute to the shaping of the design of the organization for ongoing growth.
References
Burton, Richard M., DeSanctis, Gerardine., & Obel, Borge. (2006). Organizational Design. Available fromhttp://www.cambridge.org/catalogue/catalogue.asp?isbn=0521851769&ss=exc&utm_source=DOI&utm_medium=MultiLink&utm_content=0521851769&utm_campaign=CDI.
Castellacci, F., Grodal, S., Mendonca, S., & Wibe, M. (2005). Advances and Challenges in Innovation Studies. Journal of Economic Issues, 39(1), 91-121. http://search.ebscohost.com
Center for Effective Organizations.(2007). ORGANIZATION DESIGN FOR GROWTH: THE HUMAN RESOURCE CONTRIBUTION. Retrieved October9, 2009, from http://www.marshall.usc.edu/assets/048/9960.pdf