Achieving Organizational Effectiveness may seem like an intimidating task but yet we all need to work on it and around it every day. Designing organizations with a purpose or designing their strategy as such that they tread for a purpose is a top-notch complex job. Whereas, splitting it down into various steps streamlines it and makes it far more easier to comprehend. For long term strength and achievability of an organization the key is to reform an effective organizational design.
An organization with a well-developed strategy and a strategic plan for all departments can run effectively up to three years or more without a change, but when it comes to periods extending from three to five years the changing environments in business today would require amendments and adjustments on 12-month footage and complete revamp would be required every three years. A lot of organizations find it difficult to adequately cope up with such changes unless management teams are made to handle change, encourage, disseminate information, contribute techniques, form selective squads for certain procedures and engage feedback and report relationships.
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So what exactly is an effective Organizational Design?
A practical organization conforms to a uncomplicated but knock-down imagination, prepares meticulously, encourages productively, forms leadership who know how to regulate, designate, make collaborations, deal discrepancies, and cope up with change, has competent connection and has formulated circumstances for taking decisions at all levels. Moreover, each employee and groups, at this point, focus upon productiveness of activities and checking that the activities stay in line with the company plan. Basic Preparation and Collaboration procedures are most adequate when continuing the obligation of fundamental management, who are not in charge of direct line administration. When selective information is shared out productively from this team to handlers across the system who have been specified deciding ability as long as their aims have been in line with the corporate strategy the most effectual procedures and performance management setting is carried out.
Important organizational change takes place, for instance, when an organization alters its global strategy for prosperity, sums up or takes away a major segment or exercise or changes the very essence by which it functions. It also happens when an organization develops through several developments, but like individuals must successfully derive through developments. For systems to evolve, they frequently must undergo substantial alterations at several points in their growth. That is why organizational modification and development has become far-flung in communications about occupation, systems, administration and ruling bodies.
Leaders and handlers constantly make attempts to carry out productive and substantial change as this is integral in their lines of work. A few are very proficient at this attempt while others constantly strive and flunk. That is generally the conflict between people who prosper in their purposes and those that get shuttlecocked all around from task to task, finally patching up into a role where they're disappointed and inefficient. Unluckily, there still are not adequate schools with programs about how to examine organizations, distinguish critically important precedences to deal with such as systematic complications or stimulating perceptions for modifications and then attempt productive and significant change to deal with those precedences.
Organizational design can be a competitory tool by allowing the organization with flexibleness needed to react to ever-changing customer needs while bolstering up organizational efficiency and effectiveness. It can formulate an infrastructure to entitle a strategy to be put into operation. It allows for responsibility to employees by distinctly delimiting the fields of possession and command. Certain figures promote innovation and contract development cycles without a concession on development. Organizational design can allow for quicker decision-making as some examples help speed up information surge and streamline decision-making. It can also allow for personal growth by creating chances for people to take on unlike and ambitious roles amongst the same organization. Any work procedure in the organization can be in range for organizational design.
Prospective symptoms of a flunking organization can be rationalities to acquit organizational design. The symptoms that the interior OD practician can look for let in unresponsiveness to the combative surroundings, sulky decision making, unneeded layoffs, customer discontentment, and puzzling lines of authority, let-down to meet business targets, weighed down or underutilized handlers, procedure confusion, and deauthorized employees. Or a design driver could be an attainment or divestiture, an alteration in business strategy, new product lines, a developing volume of exercise, substantial change or forces from the external environment, insistence to reduce cost or amend performance, or a modification in leadership.
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Principles of an Effective Organizational Design
Numerous different factors make an organization productive. For instance - leader fashions, sight and mission, first-class product and employees, planning, organizational heritage, applied technology, and organizational plan are all several elements that cater to a company success or failure. If an organization stutters in one of these fields, it could bring about the distinction amongst being good or great. Failure in multiple fields could result in desolating consequences. Strategy precedes structure as believed by many. This could be true; nevertheless, I would wish to put forward some introductory organizational design rationales that can place a strong basis for any organization in their pursuance of success. This is not proposed to be a thorough essay on the matter, but rather an assessment on some vital design consequences. Numerous organizational design principles can be put to use that is groundwork for a company to carry out as they achieve positive results.
Lay down a Sound Hierarchy
For over a century, American companies have used Frederick Taylor's scientific management theory, which calls for precise, efficient, bureaucratic organizations. This theory gained popularity during the Industrial Revolution as strong leaders emphasized top down control, standard rules, and clearly defined authority and responsibility. There are now many organizational theorists and practitioners that would agree with this statement by Galbraith, "The traditional hierarchical structure of organizations - with its dysfunctional effects - continues to fall under harsher and harsher criticism. There is an appropriate trend away from authoritarian management styles and the separatist titles and privileges of a multi level hierarchy." There will continue to be a growing trend for organizations to be leaner and flatter. The old hierarchy of command and control will become fewer. Ashkenas et al. believe that organizations that have hierarchies designed around the old success factors of size, role clarity, specialization, and control is an outdated model. Instead, they believe healthy hierarchies in the twenty-first century must revolve around the new success factors of speed, flexibility, innovation, and integration.5
This is due to the fast paced, turbulent, ever changing global economy. I would like to add that a healthy hierarchy is also based upon healthy relationships between the layers of authority. There must be a genuine love and concern for each other - to treat one another with love and respect.
Enhance Span of Control
We would be discussing two major ways to take out excess layers of hierarchies; enhancing the span of control of managers and split the organization into productive teams. We will be discussing each in turn. Span of control, a.k.a. span of management, is an HRM expression that denotes the amount of employees a manager can essentially handle. It is an especially crucial concept for small business proprietors to interpret.
Basing on certain evidences we know that organizations are becoming leaner and blander. Phillips which is a majorly centralized company with a precipitous hierarchy and their span of control is 5. Ashkenas et al. conceive, "Getting rid of levels of managers brings the organization closer to reality and lend a hand in making decisions faster, associate with client needs, and be more reactive to altering states of affairs. Besides, dispatching layers of management and enhancing span of control ascertains that the persisting managers would not get too engaged in specifics." Putting differently, increasing span of control emancipates employees to make settlements, take responsibility for those decisions, and endows them to have better authority. Micromanaging by other supervisions can also be eliminated. There are some obvious factors that affect span of management which incorporates factors such as geographic locations, ability and involvement of employees, technological factors as well as complexity of diverse tasks.
Split the Organization into Teams
Another path to bump off excess layers of hierarchy is the evolution of teams. Pfeffer considers self-managed teams are a primal component for a productive organization as teams can be alternative for peer-based hierarchy of work. He considers peer accountability is more productive as compared to hierarchical management. Those who work in teams feel accountable and liable for the work they are assigned. Besides this, teams enable employees to become a think-tank which appropriates creative solutions to difficulties. Moreover, working in teams also enables organizations to save money by eliminating layers of hierarchy which are not of use to the organization.
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Blanchard applies the expression "high performance teams." He describes a team as "two or more individuals who collectively come together for a mutual intention and who are mutually answerable for consequences. He describes seven features of high achieving teams using the form
Purpose and values. High performance teams share a sense of purpose and a common set of values, which includes a compelling vision.
Empowerment. High performance teams have the authority to make decisions, however, with this authority comes responsibility and accountability.
Relationships and communication. High performance teams are committed to open and honest conversations in a way that exhibits care, dignity and respect for one another.
Flexibility. High performance teams are interdependent. The leader of the team often changes based on needs and talents. Members are willing and capable of changing and adapting according to the internal or external environments.
Optimal Productivity. High performance teams get the job done in a timely manner with excellence. They are committed to significant results. They take pride in their work, and hold each other accountable for a job well done.
Recognition and appreciation. High performance teams receive positive feedback. They encourage each other and are motivated to perform for the good of the team and the company.
Morale. High performance teams take pride in their work. They have a strong team spirit and sense of a unity.
Successful organizational design gives employees the authority to makes appropriate decisions. However, with the implementation of teams, rarely are decisions made in a vacuum, but rather a team takes responsibility for decisions and actions. According to Blanchard, "Empowerment is the process of unleashing the power in people - their knowledge, experience, and motivation - and focusing that power to achieve positive outcomes for the organization." Decisions need to be made by those who are closest to the issue. Ultimately, empowerment is handing over authority and trusting employees to make the right decisions. This requires employees to be both informed and competent.
Train and Develop Employees
Once hired, an organization needs to invest in their employees by training and developing character, ethics, general and specific skills. Developing competencies helps the company to be a learning organization and it is increasing the intellectual capital of the staff. Although these factors do not show up on the balance sheet, it is increasing the health and success of the organization. Mentoring programs for new employees can go a long way to orient a person to an organization and to help them to grow both personally and professionally. Collins believes an organization needs a culture of discipline that includes disciplined people, disciplined thought, and disciplined action. Much of these expectations and disciplines can be taught.
Foster a Learning Organization
Great companies enjoy the learning process. They are a better company for both their failures and successes. According to Daft, "The learning organization encourages communication and coaction so that everybody is employed in describing and solving troubles, enabling the organization to incessantly test, improve, and increase its potentiality."
Implement a Selective Hiring System
One of the most crucial components an organization can do is put through a selective hiring system. Jim Collins believes it is essential to get the "correct people on the bus, the correct people in the correct seats, and the wrong people off the bus. If you get the right people on the bus, the problem of how to motivate and manage people largely goes away. The right people don't need to be managed or fired up; they will be self-motivated by the inner drive to produce the best results and to be part of creating something great."
Institute a Fair Reward System
Great organizations provide not just a just wage, but also a fair reward system. There are a variety of reward systems such as gain sharing, profit sharing, stock ownership, pay for skill, and various forms of individual and team incentives. Many successful organizations encourage stock ownership. If employees are owners, they will think and act like owners.33
Many organizations scale rewards according to vertical position. This is the wrong thinking.
When rewards are based on this premise, it tells employees that climbing the hierarchy is more important than performance. According to Ashkenas et al., "When rewards exist to recognize and encourage superior performance regardless of level, boundaries loosen and the hierarchy's health improves." This sort of reward system will help employees avoid the "peter principle." Employees will be satisfied to stay in a job that they do well, if they are compensated in a just fashion through rewards, instead of feeling compelled to climb the organizational ladder to a place of incompetence.
Many factors come together to make an organization great. A few worth mentioning are leadership style, personality and charisma; a compelling vision and mission; excellent products and employees; exceptional customer service; a unifying organizational culture; the right strategy and plans; technology; and an exceptional organizational design. This article analyzes one factor - organizational design. An extraordinary organizational design can act as a solid foundation to build upon as a company strives for success. This is not an exhaustive study on the subject, but rather an overview on some critical design issues. The author believes there are ten organizational design principles that are critical for a company to implement to lay this solid foundation of organizational greatness. The ten factors include: establishing a healthy hierarchy, increasing the span of control for managers, dividing the organization into high performance teams, encouraging open lines of communication, empowering employees, providing systems of accountability, fostering a learning organization, implementing a selective hiring system, training and developing employees, and instituting a fair reward system. When all of these factors come together in their proper place the foundation for a great company has been laid.
"A well established organization is one which people have the cognition, ability, need, and chance to individually succeed in a way that contributes to collective organizational achievement." Organizational prosperity is the destination. A company is on its way to immensity when it has a productive organizational design that encourages success. The organizational design principles talked about in this paper will assist any company follow a hefty design and lay a strong basis for a productive organization.