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What is Organization Design?

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What Is An Organization?

The word organization is used in a number of contexts. An organization can be a whole corporation or just one part of it. It can comprise tens of thousands of people or just a few dozen. Organizations are nested inside one another. The smaller the organizational unit, the fewer design choices and decisions there are to make, and the more those decisions will be influenced by the larger organization. Regardless of size, there are still tremendous opportunities for the leader to shape the organization and improve its effectiveness through the Organization Design process.

What is Organization Design?

There are a number of definitions. Here are a few that really hit the mark:

  • A formal, guided process for integrating the people, information and technology of an organization to match the form of the organization as closely as possible to the purpose(s) the organization seeks to achieve. (Source: unknown)
  • The deliberate process of configuring structures, processes, reward systems, and people practices and policies to create an effective organization capable of achieving the business strategy. (Source: Galbraith et al)
  • Aligning the structure of an organisation to its objectives and improving the relationships between individuals and groups (Source: unknown)
  • Aligning the organisation to reach its strategic goals (Source: Little)

From these definitions it is clear that the PROCESS of organisation design is both FORMAL and DELIBERATE. It needs to take all aspects of PEOPLE, PRACTICES, POLICIES, AND PROCEDURES into account. And it needs to be based on enabling the organisation to ACHIEVE IT’S STATEGIC GOALS AND OBJECTIVES.