Strategic Strategy: Organization Design. To survive and thrive in the long run, organizations must be effective. Organizational effectiveness is a measure of how effective an organization is within its environment, i.e., how well it fulfills its purpose by satisfying the needs of its customers and other stakeholders (Chandler, 2017). Being effective means continuously delivering the value for which their customers are willing to pay the asking price. Building an effective organization is one of the toughest challenges in the era of modern management. The good news is that we now have enough knowledge and experience to deliberately make organizations more effective. This is being done through the process called “organization design”.
Putting organization design in its rightful spot
Understanding the basic principles of organizational design
- Organizational design is driven by the environment, strategy and operating context. No two organization design solutions are the same. The designer needs to take the situational approach – to assess the current situation both externally and internally, understand the intended strategy and design organization accordingly.
- The organizational design takes a holistic view of the organization. It’s always about the entire organization. Focusing on some part of an organization will never bring the intended results.
- Organizational design is focused on the future, not the present. It is important to be aware of the current situation to start the design process, but the result should take into account how the future organization should look like. An organization design that is perfect for today is of little use if it cannot adapt to cope with the conditions of tomorrow (Goold & Campbell, 2002).
- Organizational design is a resource-intensive process resulting in fundamental changes. It takes a lot of time and requires participation from all employees while resulting in significant organizational changes.
- The direction of organization design is dictated by the source of changes. If the goals and missions change, organization design is initiated from the top down; if the technical system on the operations level or processes change, organization design proceeds from the bottom up.
Importance of having a model for organization design
Constraints to organization design
Strategic Strategy: A possibility for HR practitioners to add value to the executive agenda
He has more than 15 years of experience in organization design, organizational changes, business process design & improvement, strategy development, and performance management. His work spans different industries, such as banking, oil & gas, gaming, and telco. Besides the profit sector, Ivan has been working with the government and non-profit sectors as well.
Ivan holds a BSc and MSc in Management, as well as a PhD in Strategy and organization from the University of Belgrade, Faculty of Organizational Sciences. He is a Certified Lean Six Sigma Black Belt, Certified Business Architect, Certified Performance Management Professional, and Change Management Practitioner.