Topic: Designing effective organizations

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Topic Designing effective organizations

• (Creating effective organizational architecture)

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Organization Structure

• Take everything thats characteristic of the
  people in a business Leadership, motivation,
  brains, satisfaction, stress, ...
• Throw it out.
• Whats left? The jobs, the technology, the
  machines, communication channels, etc.
• Thats the STRUCTURE, a.k.a. the Organizational
  ARCHITECTURE

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Structural responses

• Why does structure matter?
• Sooner or later, something fundamental in your
  business world will change. (Andrew S. Groves,
  Only the Paranoid Survive, 1996, Currency
  Doubleday.
• The PC, wireless tech, 9-11, Enron (Andersen),
  ...
• The 10X Change What such a transition does to a
  business is profound, and how the business
  manages this transition determines its future.

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Structural responses to these strategic
inflection points are critical

• Strategic inflection points
• competition
• technology
• customers
• suppliers
• complementors
• regulation ( deregulation)

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Structural dimensions of organizations (The A
list)

• Formalization
• Specialization
• Standardization
• Centralization
• Span of control
• Professionalism
• Communication (direction, type)

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The A list (Burns Stalker, not Grove)
Organic Mechanistic

• Formalization low high
• Specialization low high
• Standardization low high
• Centralization low high
• Span of control narr. wide
• Professionalism high low
• Communication type oral writ.
• Communication dir. hori. vert.

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So, whats the best structure?

• It depends
• On what?
• The contingencies!

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Contingencies

• These are strategic choices/factors
• Technologies
• Environment/markets
• Making products or services?
• Size

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The solution?

• More uncertainty?
• More organic structure!
• So how does it work?

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Contingencies

• These are strategic choices/factors
• Technologies
• Environment/markets
• Services
• Size

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Audit these Where are we now?
Organic Mechanistic

• Formalization low high
• Specialization low high
• Standardization low high
• Centralization low high
• Span of control narr. wide
• Professionalism high low
• Communication type oral writ.
• Communication dir. hori. vert.

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So what do we know so far?

• Small, service-oriented, uncertain technologies
  and environments?
• Organic structure!
• Large, product-oriented, predictable technologies
  and environments?
• Mechanistic structure!
• But what about mix-n-match? (Thats the hard
  part)

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For all of these contingency models, keep in mind

• Static model
• Where are we now?
• Where should we be, based on todays situation?
• How can we get there?
• Dynamic model
• Where are we now?
• What technological/environmental/etc. (strategic)
  change is happening?
• What do we need to do to respond?

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Some additional references that seem to be
holding up well

• Competing by Design by D. A. Nadler M. L.
  Tushman (1997), Oxford U. Press. (Dry but good.)
• The Profit Zone by A. J. Slywotzky D. J.
  Morrison (1997), Times Business.
• Maverick by Ricardo Semler (1993). Semco
  jettisoned headquarters, decentralized
  everything, managers set own salaries, workers
  set own hours