Organization Design: Aligning Organizational Structure With Business Goals

Human Resource Management homework help

Forum Assignment for the Week: 250 Words minimum For this week’s Forum, respond to the following:  

Using this week’s lesson and resources (or previous weeks) as a start, locate three reputable sources that inform you about the process of organizational design (you can include non-journal sources for this assignment). Discuss an example where optimal (or improved) organization design resulted in greater functional effectiveness and productivity of an organization.

***Your post must also end with a “Question to the Class” – something related to the topic that you found thought-provoking and about which you’d like to know more and have further dialog. ***

No sources or citations required

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To receive 100% as a grade (the exemplary level) for the weekly forums, you should ensure that your responses meet the following criterion:

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UNDERSTANDING ORGANIZATION DESIGN

 

INTRODUCTION

I hope you are enjoying the course so far. We are now over halfway complete. Last week we explored metaphors and different perspectives on organizations. This week we will look at your current or past organization and see how well it was designed. By the end of the module, you should be able to ascertain if your organization model is well designed or poorly designed.

 

Organization Design: Aligning Organizational Structure With Business Goals

Does your organization’s design actually work?

Is your organization well-designed?

And how do you know?

What does a well-designed organization look like, and how does it feel to work there? And how is it different from a poorly-designed one?

These are the types of questions we will explore in looking at organization design.

 

Organization’s Structure

Many people equate organization design with an organization’s structure: The words “lean” and “flat” are used to describe organization design as well as its structure. In fact, organizational design encompasses much more than simply the structure: Organization design is the process of aligning an organization’s structure with its mission. This means looking at the complex relationship between tasks, workflow, responsibility, and authority, and making sure these all support the objectives of the business.

Good organizational design helps communications, productivity, and innovation. It creates an environment where people can work effectively. Many productivity and performance issues can be traced back to poor organization design. A company can have a great mission, great people, great leadership, etc. and still not perform well because of poor organizational design.

Take the example of a company whose sales department and production department both work well as separate units. Yet they need to communicate about customer needs and have not been organized to do so: Company performance suffers as a result. Then take the example of a company that wants to grow by acquiring new customers. Yet its sales team is rewarded for customer retention instead: Again, company performance is compromised as a result.

How work is done, business processes, information sharing and how people are incentivized; all of these directly affects how well the organization performs. All of these factors are facets of the organization’s design and each facet is important to organization’s success.

Types of Organization Structure

Most organizations are designed or evolve, to have elements of both hierarchy and more flexible, organic structures within. (Organic structures are more informal, less complex and more “ad-hoc” than hierarchical structures. They rely on people within the organization using their initiative to change the way they work as circumstances change.)

Before looking at some of the common types of organization structure, it’s worth looking at what characterizes a hierarchical structure and how it contrasts with an organic structure. It’s worth saying that one type of structure is not intrinsically better than another. Rather, it’s important to make sure that the organization design is fit for organization’s purpose and for the people within it.

 

MAKING ORGANIZATION DESIGN DECISIONS

Characteristic Hierarchical Structure Organic structure
Complexity High – with lots of horizontal separation into functions, departments, and divisions Usually lower – less differentiation or functional separation
Formality High – lots of well-defined lines of control and responsibility Lower – no real hierarchy and less formal division of responsibilities
Participation Low – employees lower down the organization have little involvement with decision making Higher participation – lower level employees have more influence on decision makers
Communication Downward – information starts at the top and trickles down to employees Lateral, upward, and downward communication – information flows through the organization with fewer barriers

 

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Organic Structures

More organic structures include simple, flat structures, matrix organizations and network structures:

· SIMPLE STRUCTURE

· MATRIX STRUCTURE

· NETWORK STRUCTURE

Often found in small businesses, the simple organization is structure is flat. It may have only two or three levels; employees tend to work as a large team with everyone reporting to one person. The advantages are efficiency and flexibility, and responsibilities are usually clear. The main disadvantage is that this structure can hold back growth when the company gets to a size where the founder or CEO cannot continue to make all the decisions.

Making Organization Design Decisions

Given the many choices of structure, how do you go about making organization design decision for your business? Different organization structures have different benefits in different situations. What matters is the overall organization design is aligned with the business strategy and the market environment in which the business operates. It must then have the right business controls, the right flexibility, the right incentives, the right people and the right resources.

Here are just some of the many things that you can consider when thinking about the structure of your organization.

There is much more to organization design than deciding on its structure. This list shows just some of the facets organization design that can be taken into accounting thinking about this. With each stage of growth or each change, the organization design needs to be reassessed and realigned as necessary. The list can also help you identify issues that might be causing team problems or holding back your business.

 

STRATEGY

SIZE

ENVIRONMENT

CONTROLS

INCENTIVES

Conclusion

 This week should have shed some light on your organization design. We looked into how well or how poorly the design is where your work or have worked in the past. We also examined the different types of structures such as functional, divisional, simple, matrix, and some others. Ideally, the pieces are all starting to come together. Next week we are going to examine personalities in the workplace and why they matter.

References

Organization Design: Aligning Organization Structure with Your Business Goals. (n.d.). Retrieved October 25, 2017, from https://www.mindtools.com/pages/article/newPPM_95.htm#sthash.ThmRWtuM.dpuf

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