What is organizational design?
Organizational design is the administration and execution of an organization’s strategic plan. This means that the organization’s strategy determines the optimal organizational design.
What does an organizational design initiative deliver?
Any sound organizational design initiative needs to deliver the following:
Five factors affecting organizational design
There are five factors that greatly impact organizational design. These factors are:
Vulpen, aihr.com
Organizational design is the administration and execution of an organization’s strategic plan. This means that the organization’s strategy determines the optimal organizational design.
What does an organizational design initiative deliver?
Any sound organizational design initiative needs to deliver the following:
- A clear strategic intent: What are we aiming to deliver?
- Guiding principles: What are the principles that inform our design decisions?
- Capability maps: Which capabilities do we need to deliver on the strategic intent, and how do they differ in strategic importance?
- Operating model blueprint: How will these capabilities work together to execute?
- Work design: What are the teams, jobs, and skills required to deliver, and how do we organize them?
- Workforce plan: What are our strategies to resource the structure?
- Performance measures: How will we know that the design is working?
Five factors affecting organizational design
There are five factors that greatly impact organizational design. These factors are:
- Strategy. Strategy dictates the strategic priorities of an organization. This is the most important influencing factor of organizational structure and design.
- Environment. The environment a company operates in influences its strategy but also dictates how it positions itself. In a rapidly-changing environment, the organization has to design for more flexibility, or adaptability, while in a stable environment, the organization can optimize for efficiency.
- Technology. Information technology is a key enabler for decision-making. The state of IT impacts organizational design as well. When systems are in place, and decision-making is based on data, the organizational structure and design – including the potential for hierarchical control – will be different from an organization where most of the data is stored in unorganized Excel sheets.
- Size & life cycle. The organizational size and life cycle also impact the organizational structure and design. A 20-person company has very different challenges when it comes to design compared to a 200,000-person company.
- Culture. Organizational culture is another key element that impacts organizational structure and design – and, vice versa, design also impacts culture.
Vulpen, aihr.com