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Organization design all about linkages

Summer good time to evaluate business

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While spring is often thought of as spring-cleaning time, many organizations use summer as a time to rethink their structure. Typically, there are a number of signals that suggest restructuring and reorganization need to be undertaken.

If new equipment is not the issue, then most often, managers will have received a number of complaints regarding overwork, inefficiencies in work processes and/or insufficient time to carry out the assigned workload.

In many cases, you will also find absenteeism and the rate of accidents in a particular business unit might also indicate it's time to think about reorganization.

In other cases, the organization's structure itself is the problem, especially in a so-called "matrix" reporting system where employees report to more than one manager.

I've experienced this myself and I can tell you it's no fun being caught in the middle of a power struggle when your managers are vying for control. Another problem with structure is that when organizational changes are made, they are often essentially "surface-level" changes rather than actually changing the old power structure. As you can imagine, the result is confusion and before you know it, the old ways of doing things prevail and the short-term fix collapses.

Organization design is a very important aspect of any organization, whether it is a for-profit business or a not-for-profit volunteer organization. Employees pay attention to structure because it paints a picture for them and outlines the various paths for communication, reporting and supervision. Structure and organization design are also very important to the overall co-ordination of work.

There are a number of different types of organization structure, depending on the nature of the service or product, the geographical areas served, the business processes put in place and the mission and goals of the organization. For instance, a functional design creates a set of different departments that are directly related to a major technical function such as sales, accounting and the various elements of a product or service. On the other hand, a geographical organization design is structured around customer interests and/or where they are located. A third design, called a matrix, occurs when there's a technical functional manager and also a special team project manager.

While it is said no one structure is better than another, how does a manager go about determining the right structure when undergoing organizational redesign? What steps must be taken in order to create a design that will ensure work and reporting alignments result in organizational efficiency and effectiveness? The following steps will act as a guideline:

-- Review mission and goals -- conduct a strategic planning session to confirm your mission, vision and goals as well the key success factors that will help you to know when you have reached your goal.

-- Define the work processes -- identify what sequence of tasks and activities must be undertaken in order to create the product or provide the service you require to assure your mission and goals. Confirm activities and processes that are both core to your business and those that are non-core.

-- Determine needed linkages -- once you define your business processes, you need to look at where they are independent and where you need to have co-ordination. Tasks that require co-ordination should be established close to one another so communication occurs freely.

-- Divide the work -- this means clustering the work and responsibilities into business units, teams, departments and/or divisions. This then clearly shows who reports to whom and when.

-- Determine the management structure -- carefully evaluate how many levels of management and supervision you need, and how many staff reports will be involved in each level.

-- Confirm decision-making authority -- centralized decision-making means all decisions are made by the senior management. This is often the case when control is of prime concern. Others prefer a decentralized structure, so decisions are made as close to the customer as possible and can be made more quickly. Companies often change from one to another over the years depending on leadership philosophy.

-- Co-ordination requirements -- once the organization structure has been proposed, you need to examine how you will co-ordinate all your activities and decision-making requirements. Co-ordination is accomplished through standardization, policies and procedures, supervisory consistency and gaining employee commitment.

Organization design is the structural backbone of an organization, but it is only as good as the people working within it. So once again, the importance of human-resource management comes back to our attention. In order to build a strong employee base, we need to pay strong attention to the recruitment of the right leaders who can inspire others and motivate them toward the organizational goals.

Time needs to be spent helping employees understand the mission and vision. Employees must have similar values and buy into the mission, otherwise they can't and won't support it. In today's organizations, employees want to be involved; they want to be asked their opinion and they want to contribute to and be recognized for success. Employees want to know how well they are doing and how they can improve. They want to be engaged in professional development and personal growth. Finally, they want to be a valued member of a team and they want to fit in.

Many managers perceive organizational design as a "mechanical" exercise. Certainly, organization charts, job descriptions and the assignment of roles and responsibilities can be seen as somewhat mechanical. However, nothing will work the way it should if people don't understand and support it. And the system won't work if you have failed to link it with your vision, mission and goals and the nature of your product or service.

In summary, organization design is really all about linkages.

So, while summer may be a somewhat quiet time for your business and therefore you perceive it as a good opportunity to engage in organization redesign, keep in mind it is a serious and complex subject that requires in-depth thought and analysis. Go ahead and start your redesign thinking process this summer but delay big changes until all your key people are back from vacation and can get fully involved in discussions.

 

source: A Practical Guide to Organization Design: Margaret R. Davis, PhD and David A. Weckler, PhD, Crisp Publications, 1996


Barbara J. Bowes, FCHRP, CMC, CCP, M.Ed. is president of Legacy Bowes Group and president of Career Partners International, Manitoba. She can be reached at barb@legacybowes.com

Republished from the Winnipeg Free Press print edition August 9, 2014 H1

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