1. Organizational Design, Diagnosis, and Development
Session 2
Basic Concepts, Models & Effectiveness

2. Basic Concepts, Models & Effectiveness
Objectives
1. To further consider the role of organizational design in strategic management
2. To compare three approaches to organizational design
3. To examine criteria for organizational effectiveness

3. Organizational Design in Strategic Management
Strategy Formulation
Assess environment
Assess internal strengths & weaknesses
Formulate Plan
Strategy Implementation - Restructuring of
Design, Finances, Human Resources, Work, Technology

4. Approaches to Organizational Design
The emergent process
The rational approach
The constrained approach

5. The Emergent Process of Design
Partial control
Multiple participants
Dynamic process

6. The Emergent Process External Constraints Changes in Constraints
Initial
Constraints
Changes in
Constraints
Subsequent
Constraints
Emergent
Design
Emergent
Design
Initial Plan
The designer
Initial Participants
Change in Participants/
Interests
Subsequent
Participants
Participants
T-0
T-1

7. The Rational Approach External constraints effect design
Strategy specifies goals & objectives
Objectives effect design

8. Michael Hammer’s 7 Principles
Organize around outcomes, (not tasks)
Those who use the process should perform it
Include information processing in the work that produces the information
Treat geographically dispersed areas as if the were centralized
Link parallel activities instead of integrating results
Put the decision point where the work is performed, build control into the process
Capture information once and at the source

9. The Constrained Approach
External constraints effect the initial design
Design should match environmental demands
The design effects stakeholders
Changes in constraints effect subsequent designs.

10. A Comparison

11. Organizational Effectiveness
Output goal approach: profit, quality
Internal process approach: communication, decision making
Systems resource approach: materials and knowledge
Stakeholder approach: External & internal stakeholders.
Managing stakeholders

12. Backwards & Forwards
Summing up: We considered the emergent, rational, & constrained approaches to organizational design. And looked at 4 models for measuring effectiveness of the organization
Looking ahead: Next time we dissect the environment of the organization and consider the differences between mechanistic and organic structures.