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Difference between revisions of "Organization Design"

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'''Organization Design''' refers to the process of coordinating the [[Organizational Architecture|structural elements of an organization]] in the most appropriate manner. It is developments in or changes to the [[Organizational Structure|structure of an organization]].<ref>Definition: What is Organization Design [https://www.slideshare.net/JayashreePrabhu/organization-theory-design Jayashree Prabhu]</ref>
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Organization Design is deliberate effort to line up your structure, systems, measures, people and policies with the vision and goals that you have as an organization. The Star model by Dr. Jay Galbraith holds that organization design is more than just “structure,” but rather a holistic approach that seeks to create alignment among five major components: The first is strategy, which determines direction. The second is structure, which determines the location of decision-making power. The third is processes, which have to do with the flow of information; they are the means of responding to information technologies. The fourth is rewards and reward
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systems, which influence the motivation of people to perform and address organizational goals. The fifth category of the model is made up of policies relating to people (human resource policies), which influence and frequently define the employees’ mind-sets and skills.
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[[File:Organization_Design.png|300px|The Star Model for Organization Design]]<br />
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source: [http://www.jaygalbraith.com/images/pdfs/StarModel.pdf Jay Galbraith]
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== Implementing Organization Design ==
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'''Critical Factors in Implementing Organization Design'''<ref>What are the Critical Factors in Implementing Organization Design? [https://www.bcg.com/en-us/capabilities/people-organization/organization-design.aspx BCG]</ref><br />
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When it comes to reorganizing, companies have little room for error. The following six factors are critical to flipping the odds of success in a reorganization:
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*Synchronize design with strategy. Regardless of the precipitating factor, the reorganization must align with the organization’s strategy and business priorities in the simplest way possible.
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*Clarify roles and responsibilities. Of all the organizational capabilities most required for a successful reorganization, this set—clarifying roles and responsibilities, assigning accountabilities, and determining decision rights—is one of the most difficult to get right.
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*Deploy the right leaders and the right capabilities. In reorganizations, a common pitfall is tailoring the redesign around the individual capabilities of a few important executives. Another pitfall is overlooking the capabilities required for the new design to succeed.
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*Design layer-by-layer, not just top-down. A cascading approach to design puts companies in a better position for success. Address the needs of each layer, according to consistent design principles, rather than using a top down-only design approach.
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*Lower execution risk. Execution is by far the most important capability for achieving a successful reorganization—applying a step-by-step, disciplined approach to implementation is crucial to avoid missteps.
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*Don’t wait for a crisis to reorganize. Reorganizations that take place prior to a crisis have a much better chance of success. During a crisis, the odds of a successful reorganization are only 50/50.
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== References ==
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<references/>

Revision as of 16:41, 14 February 2019

Organization Design refers to the process of coordinating the structural elements of an organization in the most appropriate manner. It is developments in or changes to the structure of an organization.[1]

Organization Design is deliberate effort to line up your structure, systems, measures, people and policies with the vision and goals that you have as an organization. The Star model by Dr. Jay Galbraith holds that organization design is more than just “structure,” but rather a holistic approach that seeks to create alignment among five major components: The first is strategy, which determines direction. The second is structure, which determines the location of decision-making power. The third is processes, which have to do with the flow of information; they are the means of responding to information technologies. The fourth is rewards and reward systems, which influence the motivation of people to perform and address organizational goals. The fifth category of the model is made up of policies relating to people (human resource policies), which influence and frequently define the employees’ mind-sets and skills.


The Star Model for Organization Design
source: Jay Galbraith


Implementing Organization Design

Critical Factors in Implementing Organization Design[2]
When it comes to reorganizing, companies have little room for error. The following six factors are critical to flipping the odds of success in a reorganization:

  • Synchronize design with strategy. Regardless of the precipitating factor, the reorganization must align with the organization’s strategy and business priorities in the simplest way possible.
  • Clarify roles and responsibilities. Of all the organizational capabilities most required for a successful reorganization, this set—clarifying roles and responsibilities, assigning accountabilities, and determining decision rights—is one of the most difficult to get right.
  • Deploy the right leaders and the right capabilities. In reorganizations, a common pitfall is tailoring the redesign around the individual capabilities of a few important executives. Another pitfall is overlooking the capabilities required for the new design to succeed.
  • Design layer-by-layer, not just top-down. A cascading approach to design puts companies in a better position for success. Address the needs of each layer, according to consistent design principles, rather than using a top down-only design approach.
  • Lower execution risk. Execution is by far the most important capability for achieving a successful reorganization—applying a step-by-step, disciplined approach to implementation is crucial to avoid missteps.
  • Don’t wait for a crisis to reorganize. Reorganizations that take place prior to a crisis have a much better chance of success. During a crisis, the odds of a successful reorganization are only 50/50.


References

  1. Definition: What is Organization Design Jayashree Prabhu
  2. What are the Critical Factors in Implementing Organization Design? BCG