How do you know that an organization is well-designed? When strategic goals are percolating through the whole structure and direct the actions taken by staff effectively, the organization is well-built. When organizational elements don’t fit and work together properly, the message gets blurred and the desired results are not achieved. According to an article on the knowledge.insead.edu website, integrative concerns are key.
What thought processes and knowledge makes someone a master in designing organizations? Decisions regarding organizational design are, in the vast majority of cases, centralized. It doesn't matter whether we are talking about a start-up or a large, established company.
Many executives and young students participated in a survey about their opinions on two real-life cases for a paper prepared by the authors from INSEAD's Department of Strategy and Organisation Design. One case was a start-up, the other was a major redesign of a large company. The participants were asked how they would solve these two difficult cases. They were told to use diagrams, sketches and analogical reasoning based on their knowledge of cases from the past.
When designing an organization, there are two tasks
There are two goals: divide labor and tasks and foster and enable integration using the design of your organization. People often focus on establishing an organization that contains all necessary units and departments, but they forget to add information links and motivational mechanisms. However, these things are a necessity when value is to be created and captured.
Expert designers focus on securing integrity
Expert executives were more able to balance division and integration. They were aware that not only value chain and type of personnel are important. They talked about who reports to who, about compensation schemes and about how to group activities.
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