Organisation Design

ORGANISATION DESIGN

As a matter of urgency, organizations have been making some changes in the way they are organized. The pressure of competition in a deregulated environment prompts organizations’ officials to combine efforts with other companies to cut cost and increase efficiency in order to be competitive.

How should companies organize themselves so as to be more effective? In a 1994 Survey of senior executives in large companies in Canada, U.S.A. and Europe, 51 per cent of the Canadian executives said that they planned to make changes in the structure of their organizations in the next three to five years (Greenberg, 1995:535)

OB researchers and theorists have provided insight into the matter by studying what is called original structure (The formal configuration between individuals and groups with respect to the allocation of tasks, responsibilities and authority, within organizations) and organizational design - the process of coordinating these structural elements in the most effective manner. Strictly speaking, one cannot see the structure of an organization; it is an abstract concept. However, the connections between various clusters of functions of which an organization is composed can be represented in the form of a diagram known as an organizational chart. In other words, an organizational chart can be considered a representation of an organization internal structure. Organizational charts may be recognized as useful tools for avoiding confusion within organization regarding how various tasks or functions are interrelated.

However, McShane et al, (2000) define organizational structure as the division of labour as well as the patterns of coordination, communication, work flow and formal power that direct organizational activities (McShane et al 2000:560). Organizational structure reflects its culture and power relationships. Our knowledge of this subject provides the tools to engage in organizational design - the creation and modification of organizational structures.

All organizational structures include two fundamental requirements: the division of labour into distinct tasks and the coordination of labour so that employees are able to accomplish common goals. As noted earlier on, organizations are groups