Organizational Design
From OrgChart.net
Contents |
Organizational Design
Introduction to Organizational Design
Organization design is a formal process of integrating the people, information and systems of an organization to its purpose, vision and strategy – with the goal of simplifying decision making, increasing performance and making the organization more successful. Also called organizational design, organization design is a holistic approach to designing and aligning structures, processes, leadership, culture and metrics within organizations. Major issues related to organization design include allocation of responsibilities, reporting relationships, and span of control. In other words, it’s all about people.
Principles and Process of Organization Design
When senior management engages in organizational design, it looks at the work, people, structure and relationships and determines ways to optimize the organization. An org chart program can help illustrate the hierarchy of the organization and its functions, and facilitate the modeling of organizational scenarios. Principles of organizational design include:
- Division of labor
- Unity of command
- Authority and responsibility
- Spans of control
- Contingency factors
Step 1 in the process is to develop the organization structure, roles, business processes and the decision-making framework. Step 2 is to align business process, workflow and governance.
Organizational Design for Competitive Advantage
In today’s competitive business climate, organization design is a critical business activity. The following are typical reasons for an organization design or redesign.
- Changes in the marketplace
- Demands from customers
- Pressure to reduce costs
- Pressure to increase productivity
- Regulatory changes
- New division or product line
- New business leadership
- A merger or acquisition
