Organizational Design

What Is Organizational Design?

Organizational Design is the pattern in which the activities of an organization are arranged and coordinated so as to ensure implementation of its mission and accomplishment of its objectives.

Organizational design basically deals with how jobs and positions are arranged into work units and departments within an organization. Positions are the roles that people fill in organizations or companies.

Organizational design also focuses on how these units and departments are linked to each other and how they can work together. A department is one of the groups of people who work together in a particular part of a large organization, such as a college, business or government.

Components of Organizational Design

Organization’s overall design is specifically defined by three primary components (See Figure below):

  1. organizational structure—the configuration of organizational members,
  2. the types of mechanisms used to integrate and coordinate the flow of information, resources, and tasks between organizational members, and
  3. the locus of decision making—the level of the organizational hierarchy at which most decision making occurs.
Organizational Design Diagram
Three Primary Components of Organizational Design

The ultimate success of an organization depends, at least in part, on the ability of its managers to develop an organizational design that supports its strategic and operational goals.

This is so because organizational design provides a mechanism for coping with the complexity that results from managing multiple tasks, functions, products, markets, or technologies.

Organizational design is an important aspect of management. The way in which an organization is designed culminates in its effectiveness and will determine how efficiently its activities are performed.