1. Why is organizational design important?
Affects a company’s ability to deal with contingencies (events that might occur)
Used to manage diversity
Can influence an organization’s ability to be efficient and innovative

2. Why is organizational design important?
Can be a source of competitive advantage,
which is the ability of one company to
outperform another by creating more value.
Competitive advantage springs from core
competencies, managers’ skills and abilities
in manufacturing, R&D, new technology,
and organizational design.

3. Why is organizational design important?
The consequence of ignoring it is often
organizational decline:
Talented people leave the organization
Resources are harder to acquire
Value creation process slows down

4. Organizational Stakeholders
Organizations create value for various groups of stakeholders.
Stakeholders have an interest, claim, or stake in the organization, in what it does, and in how well it performs.
Stakeholders will participate if inducements
(what they get) are greater than contributions
(what they give).

5. Organizational Stakeholders
Inside stakeholders are closest to an organization:
Shareholders
Managers
Workforce
Outside stakeholders are less attached:
Customers Suppliers
Government Unions
Communities General Public

6. Organizational Effectiveness
At least minimally satisfy interests of all stakeholders
Three essential areas of effectiveness
Control of external environment
Innovation of new products and processes
Increasing production efficiency