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A
Brief Overview of Organization Design
Roy H. Autry, MBA, Ph.D.
Organization
Design is a formal, guided process for integrating the people, information and
technology of an organization. It is used to match the form of the
organization as closely as possible to the purpose(s) the organization seeks to
achieve. Through the design process, organizations act to improve the
probability that the collective efforts of members will be successful.
Organization
Design derives the optimum form for an organization directly from the purpose(s)
to be achieved. It is a process for improving the probability that an
organization will be successful.
Typically,
design is approached as an internal change under the guidance of an external
facilitator. Managers and members work together to define the needs of the
organization then create systems to meet those needs most effectively. The
facilitator assures that a systematic process is followed and encourages
creative thinking.
Hierarchical
Systems
Western
organizations have been heavily influenced by the command and control structure
of ancient military organizations, and by the turn of the century introduction
of Scientific Management. Most organizations today are designed as a
bureaucracy in which authority and responsibility are arranged in a hierarchy.
Within the hierarchy, rules, policies, and procedures are applied uniformly and
impersonally to exert control over member behaviors. Activity is organized
within sub-units (bureaus, or departments) in which people perform specialized
functions such as manufacturing, sales, or accounting. People who perform
similar tasks are clustered together.
This
basic organizational form is assumed to be appropriate for any organization, be
it a government, school, business, church, or fraternity. It is familiar,
predictable, and rational. It is what comes immediately to mind when we
discover that ...we really have to get organized!
As
familiar and rational as the functional hierarchy may be, there are distinct
disadvantages to blindly applying the same form of organization to all
purposeful groups. To understand the problem, begin by observing that
different groups wish to achieve different outcomes. Second, observe that
different groups have different members, and that each group possesses a
different culture. These differences in desired outcomes, and in people,
should alert us to the danger of assuming there is any single best way of
organizing. To be complete, however, also observe that different groups
will likely choose different methods through which they will achieve their
purpose. Service groups will choose different methods than manufacturing
groups, and both will choose different methods than groups whose purpose
is primarily social. One size cannot possibly fit all.
Organizing
on Purpose
The
purpose for which a group exists should be the foundation for everything its
members do — including the choice of an appropriate way to organize.
The idea is to create a way of organizing that best suits the purpose to be
accomplished, regardless of the way in which other, dissimilar groups are
organized.
Only
when there are close similarities in desired outcomes, culture, and methods
should the basic form of one organization be applied to another. And even
then, only with careful fine tuning. The danger is that the patterns of
activity that help one group to be successful may be dysfunctional for another
group, and actually inhibit group effectiveness. To optimize
effectiveness, the form of organization must be matched to the purpose it seeks
to achieve.
The
Design Process
Organization
design begins with the creation of a strategy — a set of decision guidelines
by which members will choose appropriate actions. The strategy is derived from
clear, concise statements of purpose, and vision, and from the organization’s
basic philosophy. Strategy unifies the intent of the organization and
focuses members toward actions designed to accomplish desired outcomes.
The strategy encourages actions that support the purpose and discourages those
that do not.
Creating
a strategy is planning, not organizing. To organize we must connect people
with each other in meaningful and purposeful ways. Further, we must
connect people with the information and technology necessary for them to be
successful. Organization structure defines the formal
relationships among people and specifies both their roles and their
responsibilities. Administrative systems govern the organization through
guidelines, procedures and policies. Information and technology define the
process(es) through which members achieve outcomes. Each element must
support each of the others and together they must support the organization’s
purpose.
Exercising
Choice
Organizations
are an invention of man. They are contrived social systems
through which groups seek to exert influence or achieve a stated purpose. People
choose to organize when they recognize that by acting alone they are limited in
their ability to achieve. We sense that by acting in concert we may
overcome our individual limitations.
When
we organize we seek to direct, or pattern, the activities of a group of people
toward a common outcome. How this pattern is designed and implemented greatly
influences effectiveness. Patterns of activity that are
complementary and interdependent are more likely to result in the achievement of
intended outcomes. In contrast, activity patterns that are unrelated and
independent are more likely to produce unpredictable, and often unintended
results.
The
process of organization design matches people, information, and technology to
the purpose, vision, and strategy of the organization. Structure is
designed to enhance communication and information flow among people.
Systems are designed to encourage individual responsibility and decision making.
Technology is used to enhance human capabilities to accomplish meaningful work.
The end product is an integrated system of people and resources, tailored to the
specific direction of the organization.
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