Organisational design is a strategic process of integrating structures, processes, people, reward systems, information and technology to help organisations achieve the business strategy. Organisational design includes structures such as management hierarchies and department groupings. Creating a formal organisational design has several benefits. However, an inappropriate design can have disadvantages for certain companies.
Clarity
In a well crafted organisational design there is clarity in reporting authorities, information flow and decision making. People know their responsibilities and their co-workers. This is beneficial in increasing company's operational effectiveness.
For example, a company that lacks formal structure and hierarchy often asks employees to perform a wide range of unrelated tasks. On the other hand, in a highly structured organisation employees refuse to perform work that is not related to their job descriptions.
In a well crafted organisational design there is clarity in reporting authorities, information flow and decision making. People know their responsibilities and their co-workers. This is beneficial in increasing company's operational effectiveness.
For example, a company that lacks formal structure and hierarchy often asks employees to perform a wide range of unrelated tasks. On the other hand, in a highly structured organisation employees refuse to perform work that is not related to their job descriptions.
Growth
A well designed organisation often responds to growth opportunities quickly than poorly designed companies. For instance, a company can effortlessly incorporate vigorous technological infrastructure to add a new employee workstation into the company network. In contrast to organisations which do not have proper technological planning, may have to face challenges adding a single employee.
A well designed organisation often responds to growth opportunities quickly than poorly designed companies. For instance, a company can effortlessly incorporate vigorous technological infrastructure to add a new employee workstation into the company network. In contrast to organisations which do not have proper technological planning, may have to face challenges adding a single employee.
Adaptability
The adaptability strategies directly respond to major industry and marketplace trends. The problem is that these trends constantly keep changing in most of the industries. Investing too much time in organisational design will make the organisation well suited for today's competitive challenges and less able to adapt to tomorrows trends. A loosely designed organisation can acclimatize competitive advantages more quickly.
The adaptability strategies directly respond to major industry and marketplace trends. The problem is that these trends constantly keep changing in most of the industries. Investing too much time in organisational design will make the organisation well suited for today's competitive challenges and less able to adapt to tomorrows trends. A loosely designed organisation can acclimatize competitive advantages more quickly.
Opportunities
A well designed organisation would encourage employees to endeavour improvement opportunities. Also, any growing organisation with formal progression track will motivate employees to excel in their respective jobs. For example, a lean organisational structure can persuade front line employees that there are no chances to move into management. A loosely structured organisation without formal designs may be capable of creating supervisory positions exclusively for high performing employees.
A well designed organisation would encourage employees to endeavour improvement opportunities. Also, any growing organisation with formal progression track will motivate employees to excel in their respective jobs. For example, a lean organisational structure can persuade front line employees that there are no chances to move into management. A loosely structured organisation without formal designs may be capable of creating supervisory positions exclusively for high performing employees.
Poor organisational structure and design can lead to bewildering chaos and disagreements. There will be confusion within employee roles, slow decision making, poor work coordination, unnecessary conflicts and stress.
To conclude, an effective organisational design must include all the suitable people (the top management roles that lead other people in the structure) in planning through the design. Staff cannot design organisation structures and give it to managers to make it work. Organisation structures and designs are foremost interventions and require thorough understanding of the problems that may arise. Hence, involvement of the top management is very crucial for creating organisational designs.
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