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Summary; Introduction to Organisation Design
- Instelling
- Radboud Universiteit Nijmegen (RU)
Summary of the book: a step-by-step approach from Burton, Obel & Hakonsson.
[Meer zien]Voorbeeld 3 van de 29 pagina's
Voorbeeld 3 van de 29 pagina's
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Voorbeeld van de inhoud
Summary Organizational Design:a step-by-step approach
Step 1: Getting started
Chapter 1: assessing the scope and goals of the organization
Introduction: the challenge of designing the organization
Organizational design is not only re-organizing the organizational chart, but it involves many
interrelated components. An organization’s design should be chosen based on the particular
context, and further the description of the context should be multidimensional, including both
structural and human components. The organizational diagnostic, design of the architecture,
and implementation as a continuous process follow a seven step-by-step approach:
1. Getting started
2. Assessing strategy
3. Analyzing the structure
4. Assessing process and people
5. Analyzing coordination, control, and incentives
6. Designing the architecture
7. Implementing the architecture
The book recommends a top-down approach that is complemented by iterative incorporation
of lower-level issues on the top-level design. Firm political and implementation issues may
suggest that the organization should be designed bottom-up.
The multi-contingency organizational design
Organizational design involves two complementary problems:
1. How to partition a big task of the whole organization into smaller tasks of the sub-
units.
2. How to coordinate these smaller sub-unit tasks so that they fit together to efficiently
realize the bigger task or organizational goals.
The book addresses the organizational design using the multi-contingency design model. This
consists of five components:
1. Goal/scope
2. Strategy
3. Structure
4. Process and people
5. Coordination, control and incentives
, Goals/scope
Coordination,
control and Strategy
incentives
Process &
Structure
People
Figure 1.1: The organizational design diamond model
The lines between the circles in the organizational design shown above represent fit, or
alignment, connections. Misalignments in any of these connections will result in lower
performance than could otherwise be obtained.
Organizational design is an ongoing executive process that includes both short-term,
routine changes, as well as intermittent, larger-scale changes.
The information-processing view
The information-processing view uses the following logic: An organization uses information in
order to coordinate and control its activities in the face of uncertainty where uncertainty is an
incomplete description of the world. By processing information, the organization observes
what is happening, analyzes problems, and makes choices about what to do, and
communicates to others. Information processing is a way to view an organization and its
design.
Both information systems and people possess a capacity to process information, but
this capacity is not unlimited and the scarcity of information-handling ability is an essential
feature for the understanding of both individual and organizational behavior.
The step-by-step approach presented in this book is based on the fundamental
assumption that the work of an organization can be seen as information processing: observing
→ transmitting → analyzing → understanding → deciding →storing → acting for
implementation.
The basic design problem is to create an organizational design that matches your
organization’s demand for information processing with its information-processing capacity.
The coordination of work has moved from an efficiency orientation to an effectiveness
orientation. Organizations thus face a trade-off:
1. They can either reduce their need for information processing, or
2. They can increase their capacity to process information.
, Many organizations have invested in the technical side of knowledge management and
other information systems without reaping the benefits, often because human side
was neglected. For that reason they emphasize on the human side in this book.
Select an organization for analysis
Organization can be defined as: “a consciously coordinated social entity, with a relatively
identifiable boundary, which functions on a relatively continuous basis to achieve a common
goal or a set of goals.”
The organization can be a team, department, division, an entire company, or even a
set of companies. Your choice of an organization becomes the unit of analysis for the entire
five-step design process.
Assess the scope of the organization
Once the organization has been chosen, it is important to state what the organization is doing.
This is what we call the scope.
You should think about the design process as a set of cascading organizational tasks,
where you go through the step-by-step process for each task. During the cascading process, it
is important to consider only one ‘organization’ at a time; keep the unit of analysis consistent.
Sometimes you have to go through the cascading process more than once.
Assess the organization’s goals
You should start by assessing the relative importance to the organization of two fundamental
goal dimensions: effectiveness and efficiency.
- Effectiveness = a focus more on outputs, products or services, and revenues
- Efficiency = a primary focus on inputs, use of resources, and costs
These are competing priorities. Within each of the efficiency and effectiveness dimensions,
there may be a number of specific goals regarding areas where costs should be cut, operative
activities should be improved, and new innovations and new products should be introduced,
among other things.
All organizations value both efficiency and effectiveness to some degree, but the
question is: which is the dominant priority?
To assess the company goals for the model, you have to inspect the official goals and
analyze them to assess if the goal has a focus on efficiency, effectiveness, or a balanced
combination.
Efficiency High
Quadrant Quadrant
B D
Effectiveness High
Quadrant Quadrant
A C
Figure 1.3: The goal space
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