This is a methodical and systematic process of assessing effective and inefficient work aspects in processes, structures, systems and workflows realigns them to match the current organisational goals. In many cases organisational design is an initial process of setting up the organisational structure, defining tasks and supervision in the achievement of goals.
Organisations need to be efficient and flexible to respond to change in an agile and robust manner. Organisational design is important to position the organisation in a manner and character that enables shift response to change. Through organisational design, the allocation of responsibilities is simple and efficient. Organisational design affects organisational action by;
Providing the foundation on which standards operating procedures and routines rest
The determination of who gets to participate in decision making processes
Poor organisational design hampers cooperation and thus hinders the completion of orders in required time within limits of resources and budget. It also creates complexity during business expansion and development. When the organisational design does not meet the future needs of the organisation, it works against progress and growth of the organisation.
In extreme cases, it could lead to low levels of coordination and collaboration within departments and teams. There are eight recognised elements of organisational design. There are formal and informal elements of organisational design. These elements are;
Decisions comprising of governance forums, decision rights, decision processes and decision analytics
Motivators which are how people are compelled to perform with regards to monetary rewards, career models and talent processes
Information implying how the organisation formally processes data and knowledge. Of consideration is the key performance indicators and metrics, information flows and knowledge management systems
Structure which is how work and responsibilities get divided. Hierarchy and reporting relationships, roles and responsibilities and business processes are of importance under organisational structure
Norms referring to how people instinctively act or take action. It is determined by the values and standards, expectations and ‘unwritten rules’ and behaviours
Commitments are how people are inspired to contribute. To develop commitment the organisation needs shared vision and objectives, individual goals and aspirations and a source of pride
Mind sets are how people make sense of their work. It requires identity, shared language and beliefs, assumptions and biases and mental models
Networks are how people connect beyond the lines and boxes. Networks speak to conversations and collaboration, teams and other working units and organisational influence
Organisational design aspects of a company or institution need to be constantly reviewed and aligned with corporate needs, changing industrial and market standards and technological advancements. Managers must be alert to rigidity in the organisational structure that may lead to inefficiencies and demoralise employees.