Prabesh Timilsina, HBD3173.E1, Exercise5

5.1 Study the Learning from Experience Case on p. 445. What is the significance of the organizational design of the company?

The basis for any successful organization is for people to work together and understand how their behaviors support the organization’s strategy. Yet, talented people in even the best managed organizations are sometimes left trying to understand how their own activities contribute to their organization’s success. An organization’s design is crucial in clarifying the roles of the leaders and employees who hold the organization together. Organization design is the process of selecting a structure for the tasks, responsibilities, and authority relationships within an organization. An organization’s design influences communication patterns among individuals and teams and determines which person or department has the political power to get things done. The structure of an organization influences the behavior of employees. Therefore, an organization’s design plays a critical role in the success of an organization.
Every organization’s design decision solves one set of problems but creates others. Organization design decisions often involve the diagnosis of multiple factors, including an organization’s culture, power and political behaviors, and job design. Organization design represents the outcomes of a decision-making process that includes environmental factors, strategic choices, and technological factors. Specifically, organization design should:
• promote the flow of information and speed decision making in meeting the demands of customers, suppliers, and regulatory agencies;
• Clearly define the authority and responsibility for employees, teams, departments, and divisions; and
• create the desired balance between integration (coordination) and differentiation to account for responses to changes