ORGANIZATIONAL STRUCTURE AND DESIGN

1. Introduction to Organizations

An organizational structure defines how activities such as task allocation, coordination and
supervision are directed toward the achievement of organizational aims. Organizations need
to be efficient, flexible, innovative and caring in order to achieve a sustainable competitive
advantage.
An organization can be structured in many different ways, depending on its objectives. The
structure of an organization will determine the modes in which it operates and performs.

Types
Pre-bureaucratic structures
Pre-bureaucratic (entrepreneurial) structures lack standardization of tasks. This structure is
most common in smaller organizations and is best used to solve simple tasks. The structure is
totally centralized. The strategic leader makes all key decisions and most communication is
done by one on one conversations. It is particularly useful for new (entrepreneurial) business
as it enables the founder to control growth and development.
Bureaucratic structures
Bureaucratic structures have a certain degree of standardization. They are better suited for
more complex or larger scale organizations, usually adopting a tall structure. Bureaucratic
structures have many levels of management ranging from senior executives to regional
managers, all the way to department store managers. Since there are many levels, decision-
making authority has to pass through more layers than flatter organizations. A bureaucratic
organization has rigid and tight procedures, policies and constraints.
The Weberian characteristics of bureaucracy are:
Clear defined roles and responsibilities
A hierarchical structure
Respect for merit
Post Bureaucratic structures
The post-bureaucratic organization, in which decisions are based on dialogue and consensus
rather than authority and command, the organization is a network rather than a hierarchy,
open at the boundaries; there is an emphasis on meta-decision-making rules rather than
decision-making rules.
Functional structure
A functional organizational structure is a structure that consists of activities such as
coordination, supervision and task allocation. The organizational structure determines how
the organization performs or operates. The term organizational structure refers to how the
people in an organization are grouped and to whom they report. One traditional way of
organizing people is by function. Some common functions within an organization include
production, marketing, human resources, and accounting.

Divisional structure
The divisional structure or product structure consists of self-contained divisions. A division is
a collection of functions which produce a product. It also utilizes a plan to compete and
operate as a separate business or profit centre. Examples of divisions include regional (a U.S
Division and an EU division), consumer type (a division for companies and one for
households), and product type (a division for trucks, another for SUVS, and another for cars).
The divisions may also have their own departments such as marketing, sales, and engineering.
Matrix structure
The matrix structure groups employees by both function and product simultaneously. A
matrix organization frequently uses teams of employees to accomplish work, in order to take
advantage of the strengths, as well as make up for the weaknesses, of functional and
decentralized forms. An example would be a company that produces two products, "product
a" and "product b". Using the matrix structure, this company would organize functions within
the company as follows: "product a" sales department, "product a" customer service
department, "product a" accounting, "product b" sales department, "product b" customer
service department, "product b" accounting department.
Circular structure
the circular structure still relies on hierarchy, with higher-level employees occupying the inner
rings of the circle and lower-level employees occupying the outer rings. That being said, the
leaders or executives in a circular organization aren't seen as sitting atop the organization,
sending directives down the chain of command. Instead, they're at the centre of the
organization, spreading their vision outward.

Network
managers in network structures spend most of their time coordinating and controlling
external relations, usually by electronic means. H&M is outsourcing its clothing to a network
of 700 suppliers, more than two-thirds of which are based in low-cost Asian countries. Not
owning any factories, H&M can be more flexible than many other retailers in lowering its
costs, which aligns with its low-cost strategy
Virtual
A special form of boundary less organization is virtual. the virtual organization as not
physically existing as such, but enabled by software to exist. The virtual organization exists
within a network of alliances, using the Internet. This means while the core of the organization
can be small but still the company can operate globally be a market leader in its niche.

INTRODUCTION TO ORGANISATIONAL ANALYSIS

Organizational analysis or more commonly Industrial analysis is the process of reviewing the
development, work environment, personnel, and operation of a business. Conducting a
periodic detailed organizational analysis can be a useful way for management to identify
problems or inefficiencies that have arisen in the organization but have yet to be addressed,
and develop strategies for resolving them. Organizational analysis focuses on the structure
and design of the organization and how the organization's systems, capacity and functionality
influence outputs. Additional internal and external factors are also accounted for in assessing
how to improve efficiency.
Organizational Analysis Models:
Strategic Triangle Model
This model relies on three key calculations to determine the efficiency and effectiveness of an
organization. First, is the value, or mission, that guides the organization. Second, is operational
capacity, the knowledge and capability to carry out the mission. Third, is legitimacy and support,
or the environment, that authorize the value of the organization, and offer support, (specifically
financial support). Using this model, a strategy for an organization is considered good if these three
components are in alignment.

SWOT model
A SWOT analysis (alternatively SWOT matrix) is a structured planning method used to
evaluate the strengths, weaknesses, opportunities and threats involved in a project or in a
business venture. A SWOT analysis can be carried out for a product, place, industry or person.
The McKinsey 7S Model
The McKinsey 7S Framework emphasizes balancing seven key aspects of an organization,
operating unit, or project. Three of the seven elements—strategy, structure, and systems—
are considered "hard" elements, easily identified, described, and analysed. The remaining
four elements—shared value, staff, skill, and style—are fluid, difficult to describe, and
dependent upon the actors within the organisation at any given time. The 7S organisational
analysis framework is based on the premise that all seven elements are interdependent, and
must be mutually reinforcing in order to be successful. Changes in a single element can result
in misalignment and dysfunction throughout the organisation, disrupting organisational
harmony.

Rational model:
The rational model views organizations as a mechanism that is made up of various parts that
can be modified in order to create an output in the shortest amount of time and without
deviation.
Natural System Model
The natural system model is in many ways the opposite of the rational model in that it focuses
on the activities that may negatively impact the organization and therefore aims at
maintaining an equilibrium in order to meet its goals
https://www.bangkokpost.com/learning/advanced/1047666/the-uber-ization-of-work-the-
good-side-the-bad-side
 STRATEGY, ORGANISATIONAL DESIGN AND EFFECTIVENESS
https://www.slideshare.net/NaazSheikh/strategy-organization-design-and-
effectiveness
ORGANIZATIONAL LIFE CYCLE:
http://adizes.com/lifecycle/

RACI ANALYSIS

https://www.projectsmart.co.uk/how-to-do-raci-charting-and-analysis.php

7 S FRAMEWORK
McKinsey 7s model

is a tool that analyses firm’s organizational design by looking at 7 key internal

elements: strategy, structure, systems, shared values, style, staff and skills, in
order to identify if they are effectively aligned and allow organization to
achieve its objectives. The goal of the model was to show how 7 elements of the
company: Structure, Strategy, Skills, Staff, Style, Systems, and Shared values, can
 be aligned together to achieve effectiveness in a company. The key point of the
model is that all the seven areas are interconnected and a change in one area
requires change in the rest of a firm for it to function effectively.

The model can be applied to many situations and is a valuable tool when
organizational design is at question. The most common uses of the framework are:

 To facilitate organizational change.

 To help implement new strategy.
 To identify how each area may change in a future.
 To facilitate the merger of organizations.

Strategy is a plan developed by a firm to achieve sustained competitive advantage and

successfully compete in the market.

Structure represents the way business divisions and units are organized and includes the
information of who is accountable to whom. In other words, structure is the organizational
chart

Systems are the processes and procedures of the company, which reveal business’ daily
activities and how decisions are made. Systems are the area of the firm that determines how
business is done and it should be the main focus for managers during organizational
change.t of the firm.

Skills are the abilities that firm’s employees perform very well. They also include capabilities
and competences.
Staff element is concerned with what type and how many employees an
organization will need and how they will be recruited, trained, motivated and
rewarded.

Style represents the way the company is managed by top-level managers, how they
interact, what actions do they take and their symbolic value. In other words, it is the
management style of company’s leaders.

Shared Values are at the core of McKinsey 7s model. They are the norms and
standards that guide employee behaviour and company actions and thus, are the
foundation of every organization.

USING THE TOOL:

Step 1. Identify the areas that are not effectively aligned

Step 2. Determine the optimal organization design

Step 3. Decide where and what changes should be made

Step 4. Make the necessary changes

Step 5. Continuously review the 7s

https://www.strategicmanagementinsight.com/tools/mckinsey-7s-model-
framework.html

BUILDING AGILITY IN ORGANISATIONS

McKinsey defines agility as “the ability of an organization to renew itself, adapt,

change quickly, and succeed in a rapidly changing, ambiguous, turbulent
environment”. A high degree of agility helps organizations react successfully to the
emergence of new competition, technology and shifting market conditions.
Essentially, if your organization is not nimble, you risk losing relevance. I urge you to
not risk getting side-lined by change.
Just how do you build agility in this time of constant change? How do you remain
steady in an increasingly volatile, uncertain, complex and ambiguous (i.e. VUCA)
world? What follows are five tips that will help you mobilize your workforce for
success.
Tip #1: Adopt a growth and learning mindset.
Tip #2: Operate and evaluate based on core values.
Tip #3: Recognize opportunities and act quickly.
Tip #4: Relentless pursuit of purpose over profits.
Tip #5: Fluidly mobilize resources.
https://www.cmc-canada.ca/blogs/mumtaz-chaudhary/2017/09/06/5-ways-to-radically-improve-
your-organizational-agility
STRATEGIC DESIGN FOR MANAGING CULTURE
https://www.interaction-design.org/literature/article/design-management-an-introduction-taking-
charge-of-processes-and-people

Strategic Design for managing growth through people processes

REALIGNING THROUGH INTERNAL HR MARKETING

The goal of internal marketing is to align every aspect of a company's internaloperations
to ensure they are as capable as possible of providing value to customers. ... Since internal
marketing focuses on leveraging the value of employees, strong communication between
the company and the employees is crucial.

Managing Dynamic processes: HR systems

https://en.wikipedia.org/wiki/Dynamic_business_process_management

https://kissflow.com/hr-process/