Leading Across Boundaries

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Organizational Design OptionsFaculty of
Computing and Information Science
Presented by Chester C. Warzynski Director,
Organizational Development Services Lecturer,
Department of Human Resource Studies Cornell
University
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Presentation Objectives

• To examine the criteria for organizational design
  and their application in contemporary
  organizations
• To identify some basic principles and processes
  of organizational design, including six basic
  organizational options and their implications
• To outline a methodology for organizing Computing
  and Information Science.

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The Concept of Sustainability
Economic Value Added
Sustainability is about Responsiveness and
flexibility
Sustainability is about capturing value from
environmental, social and economic factors
Environmental Value Added
Social Value Added
Sustainability is about decision-making for the
long term
Sustainability is about engaging stakeholders
Adopted from Owain Franks and Ann Lemmon,
Global HR Strategies and Trends, presented at
Saratoga Conference, March 18, 2002, Monterey,
CA.
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Collaborative Organizational Design Methodology
Adapted from Gelinas, J. Akiyoshi,
Collaborative Organization Design, Oakland, CA
James Gelinas Organizational Consultants, 1993.
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Principles of Collaborative Design

• 1. Those who create tend to support.
• 2. Make the purpose of the change process
  explicit and understandable.
• 3. Involve input from representative points of
  view of all key stakeholders.
• 4. Key decision makers must agree to be active
  sponsors of the process and either lead the
  process or participate directly at key points.  
• 5. The process must include, from the beginning,
  a commitment to build and follow through on an
  implementation plan.

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C.O.D. Process - Key Questions

• What is design? Whats involved?
• How will your team approach this task of design?
• How will your team build understanding and
  support?

Education planning

• Who are your customers? What do they need?
• Whats going on in the environment that is, or
  will, affect you? Your customers?
• What do you deliver to your customers?
• Do the deliverables meet customer needs?
• Which deliverables should you continue to
  provide?
• What do you need to produce these deliverables?
• Do your inputs meet your needs?
• How do you produce these deliverables?
• What works in your work process(es)? Why does
  not? Why?
• Do you receive the feedback you need?
• Which aspects of your organization encourage
  commitment and performance? Which do not?

Definition analysis
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C.O.D. Process Key Questions

• Why does your organization exist?
• What is your picture of the future state of your
  organization? What are you doing? Accomplishing?

Mission vision
Design

• How do you want to design your organization to
  best serve your customers and achieve your
  mission and vision?
• What areas do you hope to impact through this
  design effort?

• How are you going to move from your present
  organization to your new one?
• What do you want to accomplish through this
  design effort? How will you know if you have
  accomplished it?

Implementationplanning

• Is your new organization doing what you want it
  to be doing in the manner you want?
• What impact is the new organization having on
  your customers, deliverables, work processes, and
  your ability to perform and be committed to this
  organization?

Implementation evaluation
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Factors in Organizational Design Criteria

• Alignment aligning products services with
  customer expectations (customer satisfaction)
• Specialization determining functional
  technical expertise for quality (quality)
• Scale economies increasing returns to scale
  (cost)
• Autonomy establishing maintaining individual
  group self determination (initiative)
• Communications/Collaboration sharing ideas,
  information, and coordinating functions
  (coordination creativity)

• 6. Learning collecting, developing
  distributing information knowledge (growth)
• 7. Trust establishing maintaining exchange
  relationships (loyalty/solidarity)
• 8. Esprit de corps establishing maintaining
  identity, spirit cohesiveness (morale)
• 9. Agility responding and adapting quickly,
  creatively and flexibly to external internal
  change (customer satisfaction)
• 10. Leadership establishing maintaining
  direction, guiding performance (resource
  efficacy)

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Functional Structure
Dean
Alumni Affairs
Outreach
Research
Teaching
Systems
HR
Finance
Structures adapted from Cummings, T. Worley,
C., Organization Development and Change,
Cincinnati, Ohio Southwestern Publishing, 2001.
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Functional Structure

• Advantages
• Promotes skill specialization
• Reduces duplication of scarce resources and uses
  resources full time
• Enhances career development for specialists
  within large departments
• Facilitates communication and performance because
  superiors share expertise with their subordinates
• Exposes specialists to others within same
  specialty facilitates growth

• Disadvantages
• Emphasizes routine tasks and encourages short
  time horizons
• Fosters parochial perspectives by managers and
  limits capacity for top-management positions
• Multiplies interdepartmental dependencies and
  increases coordination and scheduling
  difficulties
• Obscures accountability for overall results

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Product/Service Structure - Admissions
Dean - Admissions
Operations
College Liaison
Alumni
International Transfer
Recruitment
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Product/Service Structure

• Advantages
•  
• Permits growth without loss of control
• Permits accountability of performance
• Divisional goals are clear
• Decision authority closer to problems.
• Develops more well-rounded managers
• Promotes decentralization of decision making
• Greater flexibility in responding to new
  opportunities

• Disadvantages
•  
• Duplication of resources between organizations
• Reduces job specialization. Lose track of
  state-of-the-art
• Encourages competition among divisions
• Encourages suboptimization
• Focus on good of own organization
• rather than good of whole organization
•  Cross-divisional planning and coordination drain
  resources

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Customer/Geographical Structure - Recruitment
Recruitment Manager
International Division
Eastern Division
Central Division
Western Division
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Customer/Geographical Structure

• Advantages
• Recognizes interdepartmental interdependencies
• Fosters an orientation toward overall outcomes
  and clients
• Allows diversification and expansion of skills
  and training
• Ensures accountability by departmental managers
  and promotes delegation of authority and
  responsibility
• Heightens divisional cohesion and involvement in
  work

• Disadvantages
• May use skills and resource inefficiently
• Limits career advancement by specialists to
  movements out of their departments
• Impedes specialists exposure to others within
  same specialties
• Puts multiple-role demands upon people and
  creates stress
• May promote divisional objectives as opposed to
  overall organizational goals

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Matrix Structure
V.P. Admin.
Facilities
Human Resources
Info. Tech.
Finance
Project Management
Project Manager
Facilities
Human Resources
Info. Tech.
Finance
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Matrix Structure

• Advantages
• Makes specialized, functional knowledge available
  to all projects
• Use people flexibly, since departments maintain
  reservoir of specialists
• Maintains consistency between different
  departments and projects by forcing communication
  between managers
• Recognizes and provides mechanisms for dealing
  with legitimate, multiple sources of power in the
  organization
• Can adapt to environmental changes by shifting
  emphasis between project and functional aspects

• Disadvantages
• Can be difficult to implement
• Increases role ambiguity, stress, and anxiety by
  assigning people to more than one project
• Performance is lowered without power balancing
  between projects and functions
• Makes inconsistent demands and can promote
  conflict and short-term crisis orientation
• May reward political skills over technical skills

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Process-Based Structure IT
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Process-Based Structure

• Advantages
• Focuses resources on customer satisfaction
• Improves speed and efficiency
• Adapts to environmental change rapidly
• Reduces boundaries between departments
• Increases ability to see total work flow
• Enhances employee involvement
• Lowers costs do to overhead

• Disadvantages
• Can threaten middle managers and staff
  specialists
• Requires changes in command-and-control mindsets
• Duplicates scarce resources
• Requires new skills and knowledge to manage
  lateral relationships and teams
• May take longer to make decisions in teams
• Can be ineffective if wrong processes are
  identified

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The Network Organization
Customers/Partners
Middle-Level Capability Developer
Frontline Entrepreneurs
Top-level institution builders
The Individualized Organization
From Christopher Bartlett, and Sumantra
Ghoshal, The Individualized Corporation. New
York Harper Business, 1999.
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Network Structure

• Advantages
• Enables highly flexible and adaptive response to
  dynamic environments
• Creates a best of the best organization to
  focus resources on customer and market needs
• Each organization can leverage a distinctive
  competency
• Permits rapid global response
• Can produce synergistic results

• Disadvantages
• Managing lateral relationships across autonomous
  organizations is difficult
• Motivating members to relinquish autonomy to join
  network is difficult
• Sustaining membership and benefits can be
  problematic
• May give partners access to proprietary knowledge
  and technology

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Group Discussion

• Which organizational design criteria are most for
  Computing and Information Science? Why?
• What design options would best meet your
  criteria? Why?

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Key Factors in Service Performance

• Engagement/Participation/Involvement
• Collaboration and learning
• Autonomy and freedom
• Shared values and beliefs
• Resource availability and flexibility (slack)
• Connections with/between experts and staff
• Access to knowledge base opportunities to
  contribute
• Organization development activities, e.g.,
  strategic planning, network development, team
  building, etc.
• Forums for civic engagement and social activities
• Trust

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Implications for Change

• Create opportunities for collaboration, e.g.,
  strategic planning, team building, etc.
• Invest in developing collaborative technologies.
• Invest in developing communities of practice.
• Map social capital ties that are relevant to
  tasks.
• Engage in collaborative organization design
• Build influence networks and allow some slack.
• Allow each individual to enter knowledge into the
  organization.
• Give everyone access to the knowledge base and
  experts.
• Engage employees in social and design activities.

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Selected References

• Adler, P. Kwon, S. Social capital prospects
  for a new concept. The Academy of Management
  Review, Vol. 27, No. 1, January 2002, pp. 17-40.
• Coleman, J. Foundations of Social Theory.
  Cambridge The Belknap Press of Harvard
  University Press, 1994.
• Cohen, D. Prusak. L. In Good Company How
  Social Capital Makes Organizations Work. Boston
  Harvard Business School Press, 2001.
• Cohen, S. Fields, G. Social capital and capital
  gains in the Silicon Valley, California
  Management Review, Vol. 4, No. 2, 1999, pp.
  108-130.
• Coleman, J. Social capital in the creation of
  human capital. American Journal of Sociology,
  supplement, 1988.
• Cummings, T. Worley, C. Organization
  Development and Change, Cincinnati, Ohio
  Southwestern Publishing, 2001.
• Gelinas, J. Akiyoshi, A. Collaborative
  Organization Design, Oakland, CA James Gelinas
  Organizational Consultants, 1993.
• Ghoshal, S. and Bartlett. C. The Individualized
  Corporation. New York HarperBusiness, 1997.
• Nohria, N. and Ghoshal, S. The Differentiated
  Network. San Francisco Jossey-Bass, 1997.
• Putman, R. Making Democracy Work. Princeton, NJ
  Princeton University Press, 1993.
• Sobel, C. Studied trust building new forms of
  cooperation in a volatile economy. In Richard
  Swedberg, ed., Explorations in Economic
  Sociology, New York Russell Sage Foundation,
  1993.
• Wenger, E., McDermott, R., Snyder, W. Cultivating
  Communities of Practice, Boston Harvard Business
  School Press, 2002.