Organizational Design

Many organizations conduct a regular restructuring, giving employees new titles or job descriptions, or perhaps creating, combining, or dividing departments. These structural changes often fail to achieve their desired outcomes, which frequently occur when organizations alter the organizational structure without considering larger implications. However, there are many times when organization design genuinely needs to be addressed.

The organization may be a new division or may have grown substantially. Or a change in strategy prompts the company to rethink an outdated model. Such challenges can be addressed when a design perspective (as opposed to a restructuring) is taken. The purpose of a design effort is to develop consistency between the organization’s strategy, goals, and structure. Organization design is conceived to be a decision process to bring about a coherence between the goals or purposes for which the organization exists, the patterns of division of labor and interunit coordination and the people who will do the work.

This implies that the organization must be clear about its strategy, customers, and the processes by which the organization delivers value to customers. An organization’s structure tends to refer to the ways in which boxes are drawn on organizational charts, whereas design refers not only to the structure but also other elements that support the structure. Design has several components, all of which must be in alignment and must support one another to produce a capable, effective organization.