What is the Right Organization Design?

What is the Right Organization Design?

Even the strongest of organizations that have an open and productive culture based in executive engagement, creation of buy-in, and empowerment need the right organizational design and structure. These designs and structures should allow for forward thinking, creativity, and innovation. Teams are the spine of an organization’s structure and processes. Successful teams will reduce response times, support and facilitate the organization’s strengths, decrease the impact of the entity’s weaknesses, turn threats into opportunities, and opportunities into productive strategies. Making the right decisions at the right time and with the appropriate strategies are all important factors when evaluating designs and structures.

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Through research from sources provided in the course and from academic and scholarly resources outside of the course, evaluate and discuss the following elements:

Evaluate Self-Contained Organizational Designs.
Apply the three self-contained organizational designs (functional, divisional, and matrix) to your organization (or a former organization).
Analyze the horizontal organization design with a team and process based emphasis and the relationship this design creates with customers and suppliers.
The paper should contain the following APA formatted elements:

Title Page.
Abstract.
Body of the essay (Your researched response).
Conclusion.
References Section.
The requirements below must be met for your paper to be accepted and graded:

Write a response between 750 – 1000 words for the body of the essay (The title page, abstract, conclusion and References section are not counted toward the word requirement.) (approximately 4-6¬ pages) using Microsoft Word in APA style.
Address all three elements fully.
Use font size 12 and 1” margins.
Use at least three references from outside the course material (You may use the academic resources included in the Week 8 Bibliography.) one reference must be from EBSCOhost. The course textbook and lectures can be used, but are not counted toward the five reference requirement.
References must come from sources such as, academic and scholarly journals and essays found in EBSCOhost, CNN, online newspapers such as, The Wall Street Journal, government websites, etc. Sources such as, Wikis, Yahoo Answers, eHow, blogs, etc. are not acceptable for academic writing.
Cite all reference material (data, dates, graphs, quotes, paraphrased words, values, etc.) in the paper and list on a reference page in APA style. Provide citations everywhere information from the sources is used for foundational support and for validation of opinions.
Use the third person narrative and avoid the use of the first and second person narrative and terms such as; I, me, myself, you, your, yourself, we or us (or related form such as let’s (let us) or we’ll, we’ve (we will / we have) among others). This will prevent the author or other parties from becoming the subject matter and will maintain the focus of the paper on the central theme and subject matter found in the elements.
Be informational and avoid being conversational.

 

Expert Answer

 

Abstract

Organizational design and organizational structure are two inter-related concepts that are important in the management of a company and the achievement of organizational goals. Having a proper organizational design and a structure that is best suited for the fulfillment of organizational goals goes a long way in the improvement of organizational efficiency and effectiveness. It is important to understand the various forms of organizational designs and the criteria for the selection of the various organizational structures, as this information is important for making strategic management decisions in a company. In this paper, organizational design and structure are discussed broadly, with the various benefits that an organization can accrue from the various forms of organizational structures. Insights on various issues associated with design and structure concepts will be discussed in the paper.

 

 

Organizational Design

Organizational design refers to the process of aligning the structure of an organization with its various objectives or goals in order to improve effectiveness and efficiency (Anand & Daft, 2007). Organizational design is motivated by the need to improve service delivery and business processes. It may also be defined as the stepwise methodology of identifying the non-functional aspects of workflow, structures, systems, and procedures, realigning them to suit the current company goals and realities, and later implementing the changes. Organizational design focuses largely on the improvement of both the people and the technical side of a business, resulting in the improvement of the organizational structure, increased profitability, better customer service, improved internal operations, and employees who are committed and empowered to work towards goal achievement (Ashkenas, 1995). organizational Design also involves the integration of people with core business processes and activities, systems, and technology (Anand & Daft, 2007). In order to ensure efficiency and effectiveness of an organization, it is important to match strategy with structure.

Even though organizational design largely involves organizational structure selection and optimization, it also involves understanding the imperative for change and the organization’s environment, understanding the workflows, business processes, volumes of work, roles and responsibilities, understanding the company’s resources, and conducting an activity analysis (Jones, 2013). There are several major organizational designs used by companies in the organization of activities and processes.

 

 

Functional Structure

A functional structure, also referred to as a bureaucratic structure, divides an organization based on specialty. Designing an organization using a functional structure results in departments or sections such as the sales department, the marketing department, and the customer service department. The benefit of this structure is that employees are allocated to a single function, resulting in specialization. It clearly defines roles and targets, eliminating confusion. A functional structure allows for increased operational efficiency since employees having common skills and knowledge are grouped together. The problem with the functional structure is that it makes it difficult to have effective and strong communication between the various units or departments. This often results in decreased innovation and flexibility.

Divisional Structure

The divisional structure groups every organizational function into a separate division, corresponding to either a product or a geographical region (Jones, 2013). Each of the formed divisions is usually self-sufficient, containing all the necessary resources and functions necessary for supporting the product being produced or the geography. Division based on the product means that departmentalization is done by putting activities and operations related to a particular product under the authority of a single manager in one department. Geographic departmentalization involves the grouping of activities and operations on the basis of geographic regions. This is important especially in cases where brand responses and customer tastes vary from region to region since it allows for product offering flexibility and differentiation in marketing strategies (Jones, 2013). The divisional structure is important and beneficial since it ensures that the poor performance or failure of a single division does not threaten the performance of the other divisions. The divisions also benefit from using the same brand and capital, improving efficiency and effectiveness. The problem with the divisional structure is that the structure may result in operational inefficiencies from the lack of specialization and the separation specialized function. It also results in increased taxes and accounting.

Matrix Structure

In a matrix structure, operations and employees are classified simultaneously into two different operational perspectives. The matrix structure is usually complex and very versatile, which explains why it is mostly used by large companies that operate across different geographic regions and industries. The matrix structure is much more dynamic compared to the functional structure and allows employees to share information and knowledge more easily across the functional boundaries. In addition, the matrix structure also allows for specialization, increasing the depth of knowledge (Jones, 2013). A common problem with the matrix structure is that it results in increased complexity in the command chain. This results in a higher manager-to-worker ratio and conflicting loyalties amongst the workers.

Horizontal Organizational Structure

A horizontal organizational structure places emphasis on an employee-centered approach to the organization of operations and activities (Day, 1999). The structure largely emphasizes collaboration and teamwork, allowing workers to focus on and invest their time and efforts in the achievement of the company’s goals. In the application of a horizontal organizational structure, the company focuses on teamwork and cohesion to ensure that the organization moves forward. The structure enables a company to ‘mix and match’ the elements of both the functional and divisional structures so as to create a solution for all business and operational challenges (Day, 1999). This is advantageous as it improves customer relations and customer service through the provision of better employee training and through specialization in a particular service or product line. A horizontal structure ensures that the employees and teams established have a close connection to the market and the customers. Teams deliver services and products efficiently to the customers and have special knowledge of the suppliers. Employees are aware of how to handle customer complaints and queries, how to deal with suppliers, and how to manage administrative tasks. Employees work together with the suppliers and management towards the achievement of efficiency and organizational goals.

Conclusion

It is important to understand the role that organizational design plays in the improvement of operation and the achievement of organizational goals. Aligning the structure of an organization with its business strategy and employees is important as it makes it easy to achieve organizational efficiency and ensures smooth operation (Ashkenas, 1995). With the proper selection of an organizational structure, a company better prepares itself for the market and places itself on a path towards the achievement of set goals.

References

Anand, N., & Daft, R. L. (2007). What is the right organization design?.

Ashkenas, R. (1995). The Boundaryless Organization: Breaking the Chains of Organizational Structure. The Jossey-Bass Management Series. Jossey-Bass, Inc., Publishers, 350 Sansome Street, San Francisco, CA 94104.

Day, G. (1999). Aligning organizational structure to the market. Business Strategy Review, 10(3), 33-46.

Jones, G. R. (2013). Organizational theory, design, and change. Upper Saddle River, NJ: Pearson.

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