Organization Design

Organization design is a process of organizational which involves working in divisions to ensure that the organization’s goals can be realized. These are the organizational division elements: work specialization, departmentalization, chain of command, span of control, centralization and decentralization, formalization. Strategy and structure in organizational should also be considered because it’s the important aspect to achieve the organization’s goal.

A very common organizational structure is work spezialitation. Work spezialitation divides work activities into separate job tasks. This type of structure could lead to great increases in productivity because each employee can focus on their own job tasks. But overspecialization can results in human diseconomies, such as boredom, stress, poor quality, increased absenteeism, and higher turnover. Size of organization could also effect its organizational structure. Large organization typically tend to have more specialization, departmentalization, centralization, rules and regulations than small organization. Technology in organization also plays a big role. The more routine the technology transforming inputs into outputs, the more mechanistic the structure can be. The organizations with more nonroutine technology are more likely to have organic structures. Some organizations face stable and simple environments with little uncertainty, while others face dynamic and complex environments with a lot of uncertainty. Therefore, we should also consider the environmental uncertainty before starting a new venture or organization. Management also involves minimizing environmental uncertainty by adjusting the organization’s structure. The most effective structure for unit production and process production is organic organizational. In contrast, the most effective structure for mass production is mechanistic organizational.

There are several options for organizational designs. When designing a structure, managers may choose one of the traditional organizational designs because these structures tend to be more mechanistic in nature. Simple structure is common for most start-up ventures, the simple structure organizational design has less departmentalization, wide spans of control, authority, centralized in single person, and little formalization. However, as the increase of the employees, most don’t remain as simple structure. The second traditional organizational design option is a functional structure. It is an organizational design that groups similar or related accupational specialities together. Simply, this structure can be interpered as functional departmentalization applied to the entire organization. Last, there is divisional structure. It is an organizational structure made up of separate business units or divisions. Each division in this structure has limited autonomy with a division manager who has authority over his or her unit.

Many organizations are finding traditional organizational designs often aren’t appropriate for today’s dynamic and complex environment. Many organizations nowadays tend to be more lean, flexible, and innovative. Organizational in the twenty first century tend to be more flexible. These are the organizing structure that is common nowadays; team structures, matrix and project structures, the boundaryless organization, telecommuting, the contingent workforce, lastly the organization which compressed workweeks, flextime, and job sharing.

In my opinion, the right organization design in business is depend on the organization’s type and the organization’s needs and goals. Start-up ventures typically use a simple organizational structure because it’s less complicated. However the structure in organizational could also change depend on the organization’s growth.

Reference : Management global edition by Stephen P. Robbins, Mary Coulter. (14th Edition)