How to Design Your Organization

Sections of this topic

    How to Design Your Organization’s Structures

    Much of the content
    of this topic came from this book:
    Consulting and Organization Development - Book Cover

    Assembled by Carter
    McNamara, MBA, PhD

    Suggested Pre-Readings

    Information about organizational design will have more context and meaning
    if you have read the following articles and in this order:

    1. What is an Organization?
    2. What Makes
    Each Organization Unique
    3. How They’re the Same: They’re Systems
    4. Basic Overview of Life Cycles in Organizations
    5. Basic Overview of Organizational Culture
    6. Legal Forms and Traditional Structures of Organizations
    7. Driving Forces and a New Organizational Paradigm
    8. Emerging Nature and New Organizational Structures and Design

    Sections in This Topic Include

    General Principles of Organizational Design
    Practical Advice About Organizing or Reorganizing
    Additional Guidelines for Organizational Design
    Developing Organization Charts

    General Principles of Organizational Design

    The section after this one shares practical advice about designing the structure
    of your organization. However, it might be interesting first to read about the
    general principles that the practical advice is following.

    © Copyright Jim Smith

    Some years ago Albert Cherns, an important figure in the Norwegian work redesign
    efforts highlighted some important Principles of Social and Technical Systems
    Design. The Principles of Organization Design have been known for 30 years in
    the academic and consulting community. Knowing the principles and implementing
    them are clearly two different things. First, I will detail the principles and
    following that I will highlight what has made the implementation so difficult.

    1. Complementarities

    How we go about restructuring needs to be compatible with what we are trying
    to achieve by the restructuring. The process of design must be complementary
    with the objectives. This means the design and implementation process is critical.
    If you want flexibility and participation within the work group as an output
    of the design, then how you go about designing the organization has to be flexible,
    interactive and participatory.

    If the completed work system will depend upon high levels of meaningful flexibility
    in accomplishing the work, then it is through a process of meaningful flexibility
    that the system needs to be built. The “means” have to be complimentary
    with the “ends”. In other words, if you want a system where people
    assume responsibility, then people have to be responsibly involved in creating
    the work system or you won’t get it. We do not get participative highly
    effective organizations by fiat.

    2. Minimal Critical Specification

    New technologies require people to learn and change. These abilities have to
    be developed through the work itself. Therefore, specify as little as possible
    concerning how tasks combine into jobs and how people are to interact within
    jobs. The creation of a well-designed work team must involve dialogue and decisions
    being made by the people involved. Most teams struggle from over-structure,
    which is based in job descriptions and compensation schemes, which result in
    “that’s not my job”. The trick in building a team that works
    is to specify no more than is absolutely necessary about the task or how jobs
    relate to the task, or how people relate to individual jobs. To build a high
    performance team the rule is to FIX as little as possible. This means to identify
    and specify no more than what is absolutely critical. Generally the critical
    information is about output expected. The vision of results is very important
    and has to be co-constructed with the group but more than anything you want
    to build an organic ability to learn and change into the team.

    3. Variance Control

    Support and reward groups that deal with errors at the point of origin. Effective
    teams need the legitimacy to find out where things go wrong and deal with variance
    where it occurs. The goal is to minimize exporting problems to others. The assumption
    that is safe to make is that people know what good work looks like. Exporting
    problems and unsatisfied customer needs is the mark of a team that lacks options.

    4. Clear Goals and Flexible Strategies

    Define what is expected in terms of performance early and clearly and then
    support adaptations toward appropriate means by which the group can achieve
    ends. (Do not over-specify.) This is an adaptability principle, which recognizes
    that we are designing living systems rather than machines. With living systems,
    the same ends can be reached by different means. There are a lot of ways to
    solve problems and meet a customers needs. What is critical here is the definition
    and understanding of the end goal. The “What” is to be highly specified.
    The “How” is open to local decision and initiative. This enables
    learning and an increased sense of “efficacy” on the part of team
    members. Efficacy is the sense that we are effective as a team that we can make
    a difference and do the job well. Efficacy is fragile and needs to be supported
    by continuous learning and improvement. High performance teams constantly “tinker”
    with the means by which they accomplish their results. They seldom settle on
    “one best way”

    5. Boundary Location and Control

    Supervisors and managers have to grow to become more comfortable performing
    a role as a group resource, a beacon of coming changes and a coordinator across
    task group boundaries.

    Traditional organizations group by: time, technology or territory. The weakness
    of this is that boundaries interfere with the desirable sharing of knowledge
    and experience and so learning suffers. The consistent social-technical message
    is if there are supervisors, they manage the boundaries as a group resource,
    insuring the group has adequate resources, coordinating activities with other
    groups and foreseeing coming changes. More and more these resource positions
    are disappearing as groups become more self-regulating. Often the presence of
    supervisors is an indication of a lack of success in a groups design, or unwillingness
    at higher levels to trust based upon a poor job of building the structure. When
    it is done right supervisors are superfluous at best and harmful at worse.

    6. Information Flow

    Teams have to be deeply involved to determine what and where information is
    needed for self-direction. There needs to be a management commitment to provide
    information for task performance and learning. Information has to be provided
    where it is needed for self-direction, learning, and task improvement. Control
    has to be subordinated to achievement.

    7. Support Congruence

    Goals, reward and support systems that integrate required behaviors have to
    be consistent. The reward and support systems have to be consistent with goals.
    Incentives have to be realigned to support team-based work structures. Individual
    based compensation systems are being modified continually to support many different
    team structures. Skill-based schemes and gain sharing are foundations for high

    8. Design and Human Values

    Task and organization design has to be oriented toward improving both the technical
    and the human components of the organization. The process of design must address
    the need for variation and meaning in work. It has to take into account the
    needs for continuous learning, involvement in decision-making, help and support
    between colleagues, and meaningful relationship between work and outside society,
    a desirable future. A re-design enterprise will be successful only if it unites
    a process of organization development, which includes work restructuring combined
    with a planning process that is both interactive and participatory.

    9. Incompletion

    Design is a continuous commitment, a reiterative process. A design is a solution,
    which inevitably has to be changed, therefore it is critical to build learning
    and change ability into the team. Management has to appreciate that organization
    design toward high performance is a continuous process. What has to be learned
    is the process of design because it is a never-ending necessity. Deep in our
    organizations, people have to learn how to periodically re-fashion their organizational
    arrangements. Everything falls out of balance and has to be reviewed with an
    eye toward deciding upon changes necessary. In the early stages learning how
    to redesign is often more important than the design itself. The design will
    change over time and learning how to do it is a team life skill.

    The basic message is that if you want people to assume responsibility for the
    work process you have to involve them in the work redesign process itself. Responsibility
    is the essence of self-management. To accept responsibility people have to define
    and make decisions. The tendency is for management to hand the operational people
    an output of redesign thinking done by others, and expect them to work it. Expecting
    also, the supervisors to supervise the implementation of a design which management
    has completed. The trick of organizing for real teamwork is getting everyone
    involved in the total systems improvement.

    Practical Advice About Organizing or
    Reorganizing an Organization and Its Employees

    The following article shares advice about preparing for organizing and re-organizing,
    and then the practical advice to doing any of that.
    or Reorganizing an Organization and Its Employees

    Also see
    (how to arrange resources in organizations so people can work well together)

    Additional Guidelines for Organizational Design

    is Organization Design?

    Organizational Design Right

    Structure? Need it?

    Organization Design -Training for Change

    an Ambidextrous Organization

    an Ambidextrous Organization – Part 2

    an Ambidextrous Organization – Part 3

    Terms in Staffinf of Employees

    Developing Organization Charts

    Organization charts (or “org charts” as they affectionately are known) are graphical depictions of the official roles/positions in the organization
    and their relationship to each other, e.g., the top position and authority in the organization and then what other positions formally report to
    which other positions throughout the organization. Org charts are very common, especially in organizations with 5 or more people. The following
    guidelines will help you to understand org charts and how to develop them for your own organization.

    to Build an Org Chart

    Chart (Wikipedia)

    The Power
    of Org Charts Done Right

    How Org Charts

    Cogmap: an organizational chart
    wiki, providing free access to thousands of organization charts

    This Article is in a Series About Understanding Organizational Structures and Design

    This article is the ninth in the series which includes:

    1. What is an Organization?
    2. What Makes
    Each Organization Unique
    3. How They’re the Same: They’re Systems
    4. Basic Overview of Life Cycles in Organizations
    5. Basic Overview of Organizational Culture
    6. Legal Forms and Traditional Structures of Organizations
    7. Driving Forces and a New Organizational Paradigm
    8. Emerging Nature and New Organizational Structures and Design
    9. Basic Guidelines for Organizational Design
    10. Wrap
    Up: Grasping the Big Picture in Organizations (video)

    Learn More in the Library’s Blogs Related to Organizations

    In addition to the articles on this current page, see the following blogs which
    have posts related to organizations. Scan down the blog’s page to see various
    posts. Also see the section “Recent Blog Posts” in the sidebar of
    the blog or click on “next” near the bottom of a post in the blog.

    Consulting and Organizational Development Blog

    Leadership Blog

    Nonprofit Capacity Building Blog

    Supervision Blog

    For the Category of Organizational Development:

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