Organizational Design, Slides of Human Resource Management

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ORGANIZATIONAL

DESIGN

Presentation By James Matt Caraan

A process used to align all of a company’s tangible and

intangible assets with its overall strategy in order to

create an organizational structure that nurtures growth

and helps a business reach its goals.

Organizational design is a step-by-step methodology

which identifies dysfunctional aspects of work flow,

procedures, structures and systems, realigns them to fit

current business realities/goals and then develops plans

to implement the new changes

ORGANIZATIONAL DESIGN

Faster execution of your strategy Better customer service Increased profitability and reduced operating costs Greater agility Greater efficiency and faster outputs A culture of committed and engaged employees Lower turnover and absenteeism A clear management and growth strategy WHAT IS ORGANIZATIONAL DESIGN USED FOR? REINFORCE POSITIVE OUTCOMES:

Inefficient workflows and redundant processes Lack of customer focus Lack of system, process, or outcome ownership Delayed or ineffective decision making Poorly defined or misattributed KPIs and incentives Mistrust between colleagues, teams, and leaders Lack of effective problem solving WHAT IS ORGANIZATIONAL DESIGN USED FOR? ADDRESS NEGATIVE OUTCOMES:

Five Organizational Design Principles This principle is about having effective control on the one hand while maintaining engagement and commitment on the other hand. This is always a balance. The test here is to have a control process that is aligned with the unit’s responsibility, cost-efficient to implement, and motivating for the people in the unit. Control and Commitment This principle states that activities that are done should be coordinated in a single unit. This unit can be a business unit, business function, (horizontally coordinating) overlay unit, sub-business, core resource unit, shared service unit, project unit, or parent unit. The test here is if there needs to be coordination between departments which is hard to do. Innovation and Adaptation PRINCIPLES

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Strategy dictates the strategic priorities of an organization. This is the most important influencing factor of organizational structure and design

Strategy

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. Information technology is a key enabler for decision-making. The state of IT impacts organizational design as well.

Technology

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. FACTORS AFFECTING THE DESIGN

Environment Size^ and^ Life^ Cycle

Culture

Organizational culture is

another key element that

impacts organizational

structure and design – and,

vice versa, design also

impacts culture.

DESIGN YOUR ORGANIZATION

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Step 7 Identifying support resources (finance, sales, HR, etc.), mission, staffing, etc. and where should these should be located. Step 8 Defining the management structure that provides strategic, coordinating and operational support. Step 9 Improving coordinating and development systems (hiring, training, compensation, information-sharing, goal-setting, etc.).

COMMON MISTAKES Overlooking the importance of communication channels Ineffective communication Lack of transparency Inconsistent decision-making authority and power Ambiguity in roles Imbalance of authority Ignoring the alignment with business goals Misalignment with objectives Disconnect with vision

CHALLENGES Effective organisational design requires clear communication channels, collaboration, and coordination among different departments and individuals. Ensuring effective communication and coordination across the organisation can be challenging, particularly when there are silos or communication barriers.

Communication & Coordination

organisational design often involves finding the right balance between specialised functions or departments and integrating them effectively. Overemphasis on specialisation can lead to fragmented efforts and lack of coordination, while excessive integration can result in bureaucracy and slow decision-making processes.

Balancing Specialization and Integration

Organisations need to design structures and systems that can adapt to changing circumstances and scale as the organisation grows. Balancing the need for stability and efficiency with the flexibility to accommodate future changes can be a challenge.

Scalability &

Flexibility

organisational design should align with the organisation's culture, values, and vision. However, cultural alignment can be challenging, especially when there are cultural differences across departments or when merging organisations with different cultures

Cultural

Alignment

organisational design is influenced by external factors such as industry trends, market conditions, regulatory requirements, and technological advancements. Keeping up with these external factors and designing an organisation that can respond and adapt to them can be a significant challenge

External

Factors

CHALLENGES

THANK YOU

SO MUCH

Presentation By James Matt Caraan

REFERENCES Van Vulpen, E. (2024, April 5). Organizational Design: A complete guide. AIHR. https://www.aihr.com/blog/organizational-design/ 10 Organisational Design Process Steps | Rostone Operations. (n.d.). Rostone Operations. https://www.rostoneopex.com/resources/10-organisational-design-process-steps Allen, R. K. (n.d.). What is Organizational Design? https://centerod.com/2012/02/what-is-organizational-design/ Symonds, C. (2023, December 20). What is organizational design? HR guide. Factorial. https://factorialhr.com/blog/organizational- design/ Corkindale, G. (2011, February 11). The importance of organizational design and structure. Harvard Business Review. https://hbr.org/2011/02/the-importance-of-organization Navalent. (2025, February 13). What is Organizational Design? - The Complete Guide - Navalent. https://www.navalent.com/organizational-design/ 8 Organizational design types. (2024, October 3). Orgvue. https://www.orgvue.com/resources/articles/8-organizational-design- types/