Why Is Organizational Design
Organizational design is selecting and managing the culture, structure, processes and positions in organization so that organization can control the activities. The final aim is to achieve goals and objectives and to make organization successful (Sargent and McConnell, 2008). The design works best if it is effective and it has a positive impact on individuals (Nadler and Tushman, 1998). The organizational design is important because it shapes the behavior of members working in organization (Jones, 2010, p31) and managers acquired desired behaviors through managing organizational design. The two components of design are; Structural components include goal, strategy, and structure and Human components include work processes, people, communication, coordination and control, and incentive mechanism (Burton, DeSanctis and Obel, 2006). But it is not only about formal structure it also includes informal structures and managers integrate both into business strategy. The Ford Company makes a record loss of $13.3 billion in 2006, the tall hierarchy and culture based on empire building was found to be the reason of low productivity. The behavior of managers in Ford because of empire building structure is that they do not admit mistakes and protect their interests; the managers do not like their subordinates to ask questions. The new CEO from outside the company looks at the problem and ordered managers to share information across different departments (Jones, 2010, p36). Organizational design is a continuous processes because globalization, technological breakthrough and tough competition is continuously changing the way organization work and new forms of organizational designs are emerging such as learning, virtual, cellular, alliance, network, modular or spaghetti etc. (Burton, DeSanctis and Obel,