Question

Why organizational design is Important? 200 words essay


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Answer 1

Answer:

Organizational design is selecting and managing the culture, structure, processes and positions in organization so that organization can control the activities. The final aim is to achieve goals and objectives and to make organization successful (Sargent and McConnell, 2008). The design works best if it is effective and it has a positive impact on individuals (Nadler and Tushman, 1998). The organizational design is important because it shapes the behavior of members working in organization (Jones, 2010, p31) and managers acquired desired behaviors through managing organizational design. The two components of design are; Structural components include goal, strategy, and structure and Human components include work processes, people, communication, coordination and control, and incentive mechanism (Burton, DeSanctis and Obel, 2006). But it is not only about formal structure it also includes informal structures and managers integrate both into business strategy. The Ford Company makes a record loss of $13.3 billion in 2006, the tall hierarchy and culture based on empire building was found to be the reason of low productivity. The behavior of managers in Ford because of empire building structure is that they do not admit mistakes and protect their interests; the managers do not like their subordinates to ask questions. The new CEO from outside the company looks at the problem and ordered managers to share information across different departments (Jones, 2010, p36). Organizational design is a continuous processes because globalization, technological breakthrough and tough competition is continuously changing the way organization work and new forms of organizational designs are emerging such as learning, virtual, cellular, alliance, network, modular or spaghetti etc. (Burton, DeSanctis and Obel, 2006).

Organizations have limited resources, have internal constraints, external pressures and even face conflicting goal situations and organizational design makes the balance between internal and external pressures (Jones, 2010), manage the resources in such a manner that it will achieve high performance and give best possible outcomes (Daft, Murphy and Willmott 2010, p22). It also increases productivity, allows innovation and gives competitive advantage. When organizations are not performing, managers redesign and restructure the organization so that it will reveal its potential. There is no specific best design for organizations it emanates from overall vision of organization. What will happen if there is no design in company? A Brazilian company Semco has no organizational design, structure, charts, hierarchy, goals and mission statement but still performing well and making profits (Semler, 2007). But Semco has only 150-200 employees, when organizations grow and expands, employ large number of people then gradually it becomes more complex. If a manager puts less attention, a flawed design will emerge and it hinders productivity. The factors managers should take into account while designing the organization are vision, strategy, size, environment, communication, control and incentive systems. Finally have a fact in mind that organizational behavior is result of organizational design.

Answer 2

$\huge\mathfrak\red{ Answer }$

Good organizational structure and design helps improve communication, increase productivity, and inspire innovation. It creates an environment where people can work effectively. ... The larger an organization grows, the more need there is for formal structure, defined work assignments, and clear lines of authority ...

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