Organisation Design

The management system of an enterprise can be seen as an agent maintaining a system of

objectives, having emergent properties of its collective and its environment. A key challenge to
management is thus, how to facilitate and manage these emergent qualities? It is increasingly
important to devise faster and more reliable ways of designing purposeful, agile organisation
An enterprise can be thought of as consisting of an operational and a decisional system each
implemented partly by humans and partly by machines. In fact researcher have demonstrated
conditions for the enterprise to behave as an agent, and provided insight into notions such as
fractal factory, holonic manufacturing, and others.

More specifically, Organization Design is a formal, guided process for integrating the people,
information and technology of an organization. It is used to match the form of the organization
as closely as possible to the purpose(s) the organization seeks to achieve. Through the design
process, organizations act to improve the probability that the collective efforts of members will
be successful.

Typically, design is approached as an internal change under the guidance of an external

facilitator. Managers and members work together to define the needs of the organization then
create systems to meet those needs most effectively. The facilitator assures that a systematic
process is followed and encourages creative thinking.

Organisation design work would usually include:

 Developing an understanding of the objectives of the change, and the environment in
which it will take place
 Understanding current activities, i.e. the business processes, the interfaces between
groups, the roles of individuals, volumes of activity and levels of resources
 Developing new models for processes and interfaces, and using them to define new
structures, roles and relationships
 Planning the transition from the current state to the new - selecting people for new
positions, training, succession planning, communicating the changes etc.
  Implementing the new models, and dealing with issues that arise - winners and losers,
unpopular choices, unforeseen departures etc.

Organizational change can take the form of a major upheaval, or can be progressive. Most
organizations make changes to roles and structures on a regular basis. Unfortunately some find
that over time important responsibilities have fallen down the cracks or that the structure or
staffing are no longer appropriate for what they are trying to achieve. Organisation design is
about making sure that the shape of your business and the roles of its people are effectively
aligned to its objectives.
The diagram below depicts how the organizational design is linked to efficiency and the learning
outcomes. This diagram is a simple way explains why organizational design is so very important
and what drives organizations to pay so much importance to design.
The Design Process

Organization design begins with the creation of a strategy — a set of decision guidelines by
which members will choose appropriate actions. The strategy is derived from clear, concise
statements of purpose, and vision, and from the organization’s basic philosophy. Strategy unifies
the intent of the organization and focuses members toward actions designed to accomplish
desired outcomes. The strategy encourages actions that support the purpose and discourages
those that do not.

Creating a strategy is planning, not organizing. To organize we must connect people with each
other in meaningful and purposeful ways. Further, we must connect people with the information
and technology necessary for them to be successful. Organization structure defines the formal
relationships among people and specifies both their roles and their responsibilities.
Administrative systems govern the organization through guidelines, procedures and policies.
Information and technology define the process through which members achieve outcomes. Each
element must support each of the others and together they must support the organization’s
purpose

Conclusion
Organizations are an invention of man. They are contrived social systems through which groups
seek to exert influence or achieve a stated purpose. People choose to organize when they
recognize that by acting alone they are limited in their ability to achieve. We sense that by acting
in concert we may overcome our individual limitations.

When we organize we seek to direct, or pattern, the activities of a group of people toward a
common outcome. How this pattern is designed and implemented greatly influences
effectiveness. Patterns of activity that are complementary and interdependent are more likely to
result in the achievement of intended outcomes. In contrast, activity patterns that are unrelated
and independent are more likely to produce unpredictable, and often unintended results.
The process of organization design matches people, information, and technology to the purpose,
vision, and strategy of the organization. Structure is designed to enhance communication and
information flow among people. Systems are designed to encourage individual responsibility and
decision making. Technology is used to enhance human capabilities to accomplish meaningful
work. The end product is an integrated system of people and resources, tailored to the specific
direction of the organization.