Organization design is the process of reshaping an organization’s structure, roles, and processes to achieve a certain strategic goal. It includes strategic decisions, configuring people practices, and developing new systems and structures. The end result is an organization that can realize its strategic objectives and be more effective. The key is coherence among its component parts.

The goal of organizational architecture is to create a synergistic system that continuously generates value. The system should be designed to meet the needs of the business and to create a clear path to achieving the organization’s goals. It should also be built to handle change. This is because organizations constantly drift towards the edge of chaos. When faced with this, they must steer in order to be effective.

The most effective organizations are those that take the time to design the right kind of structures, which are flexible enough to adapt to changes. They do this through careful analysis of their internal and external factors. When done well, they reduce complexity while simultaneously making it easier for their employees to do their job. They can also lower costs, which is a big win for any business.

There are several different ways to make an organization function, but the most effective ones are those that address five key elements. These include consistency, strategic decision-making, efficiency, competitive capability, and a good design.

A small, innovative company may decide to build a single organization that includes a parent unit, a project unit, and a sub-business. This will make for a cohesive, low-cost leadership strategy. This model isn’t for every organization. Some operations require a highly autonomous structure, such as public hospitals.

On the other hand, a large, mature organization might diversify its product line to create a market-based unit for each of its lines. This allows the organization to give each division considerable autonomy. In this case, the organization might have a high-touch customer service unit, a high-speed manufacturing unit, and a market-focused horizontal overlay unit that uses different specialists to create customer value.

A successful employer will not only design the organization, but will ensure that its employees are working with the customers’ interests at heart. This is especially true for businesses that have customer-facing operations. It isn’t uncommon for a large, mature organization to revert to a simple structure after being under attack by a new competitor or an economic downturn. This is because a centralized, machine-like bureaucracy isn’t ideal for rapidly adjusting to the realities of new situations.

The best organizations don’t make a decision to implement a change without taking into account the potential consequences. This is the only way to truly maximize organizational effectiveness. This doesn’t mean that every element of the organization should be changed at once, but it does mean that the organization should have a clear, well-thought-out plan for each aspect.

The most important thing to remember is that the organization is not the sum of its parts. To maximize its ability to accomplish its mission, an organization should be able to integrate its people and its processes into a coherent system.

By Ariana