Organizational Design

a) Introduction to Organizational Design

According to academics Goold and Campbell, a good way to understand organizational design is to think of the human body. The basic skeleton represents the formal structure that allocates responsibilities to groupings and establishes reporting relationships; the connective tissue represents key linkages through which the units relate to one another; and the circulatory system represents the people and culture that bring the skeleton and tissue to life. All these elements comprise a healthy and effective organization. Working on the body of an organization, therefore, is not an ad hoc process but one that involves collaboration and a whole-systems perspective.

In this opening module, learn about: 

• Gareth Morgan’s six models of organizational structure
• Differences between mechanistic and organic structures, and the design challenges that each presents
• The relationship between environmental uncertainty and organizational structure

b) The Organization Design Workshop

A highly engaging half-day exercise will help you and your fellow participants get “real” about the pitfalls of poorly designed organizations and the challenges in determining the right fit for an enterprise’s strategy. The workshop is designed to show how organizational structures enable or prevent information flow, responsiveness, and innovation.

You will play a role as top executive, middle manager, worker, or customer interacting in a fast-paced environment. Apply and discuss practical strategic frameworks, based on the work of Barry Oshry, that will help you connect the experience to your own organization.

c) Building a Model

Good design shapes the right behaviour, facilitates the right pattern of information processing, and achieves benefits of scale. Using the work of Nadler, Tushman, and Galbraith and a variety of case studies as a foundation, you will learn more about three key elements of design: 

• Groupings: Do you group functions, positions, and individuals by activity, output, customer, or a combination? What are the advantages and disadvantages of each option? 
• Linkages: What are the formal and informal mechanisms that encourage information flow among disparate groups? What are the consequences of these linking mechanisms? 
• Processes and Systems: In what ways are groupings and linkages supported or undermined by an organization’s strategic, business, and support management practices? Are they creating the necessary alignment of these practices?

d) Diagnosing the Issue

Even before you get down to the nitty gritty work, you will need to determine the extent of the design initiative, and how narrow or broad it must be. Looking at your own organization, is there a need to modify structural elements, such as reporting relationships and groupings, or can informal means—clarifying values or norms of conduct—achieve the same ends?

Learn Goold and Campbell’s nine tests of good design to help you answer that question and identify the bedrock issues that must be addressed. Apply these tests to a case study of a company that underwent a radical redesign of operations to create a “spaghetti” organization.

e) Following a Design Roadmap

A core element of all of our organization effectiveness programs is grounding in proper process. During this program, learn the 4-D design process:

• Define: Determine the precipitating need, who must be involved, and the roadmap going forward 
• Discover: Determine design criteria and issues 
• Design: Establish groupings, linkages, processes; create and test straw models; decide on the right design 
• Do: Create the implementation teams and a roll-out schedule, and define who will do what work

You will see how the entire process works by exploring the life cycle of a major redesign initiative. To make the process easy to execute, you will be given tools such as a stakeholder map and involvement scale, a design criteria template, a guide showing how to link design to your organization’s strategic focus, and job descriptions for design team members.