ORGANIZATION DESIGN

An organization is a consciously coordinated social entity with a relatively identifiable

boundary that functions on a continuous basis to achieve a common goal or a set of
goals.

Why is Organization Design important:

1. Manager influences subordinates in three way: through personal contact, Through
substantive decisions and through decisions about their jobs, org chart,
measurements and rewards, selection criteria etc
2. So all elements of an organization need to be designed in a way that the align the
individual and teams (through structure) to enable achieving the organizational
goal
3. The goals of organization Design (intended to influence subordinate behavior):
a. To create a permanent setting
b. To achieve a pattern of collaborative effort
c. To be cost effective

ORGANIZATION AS AN OPEN SYSTEM

The characteristics of an organization are dependent on the following:

1. Environment
a. Environment impacts organizations and vice-versa
b. General environment: affects all organizations’
c. Specific Environment affects all organizations of a particular industry/state
region
d. Task Environment affects a specific organization
e. Perceived Environment: what the organization perceives as important
2. Organization’s strategy
3. Tasks or activities of the members
4. Psychological characteristics of members (to behave in a consistent way overtime)

The design tools or concepts

The fit
● A three way fit between the task, the individual’s psychological makeup
and the organizations design leads to two outcomes:-
○ Motivation
○ Performance
● The fit also enable the individual to achieve other goals like earning
money, having social contact etc
 Differentiation
○ Difference among several units in org design and behavior
Integration
○ State of collaboration among organizational units
Depending on number and pattern of the units
Pooled Integration
Sequential Integration
Reciprocal Integration
Depending on the frequency required for collaboration
Importance of achieving integration
Depending on the certainty and predictability of the information
involved
How to choose appropriate integration
○ Page-7, Figure-C

Three steps to Organization design

1. Use concepts- (Fit, Differentiation and Integration) to understand
environment, Human Situations
2. Make design choices
3. Implement change

To be used in three organizational levels- Functional unit, Single Business and Multi Busi