Organizational Design Options

Faculty of Computing and Faculty of Computing and Information ScienceInformation Science

Presented by

Chester C. WarzynskiDirector, Organizational Development Services

Lecturer, Department of Human Resource StudiesCornell University

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Presentation Objectives

1. To examine the criteria for organizational design and their application in contemporary organizations;

2. To identify some basic principles and processes of organizational design, including six basic organizational options and their implications;

3. To outline a methodology for organizing Computing and Information Science.

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The Concept of Sustainability*

Efficient resource use Product stewardship Health & safety Environment policy & Management

Stakeholder engagementSocial ResponsibilityBusiness ethicsReputation Management

Strategic & financial planning Knowledge management Quality management Risk management Effective governanceSustainability

EnvironmentalValue Added

SocialValue Added

EconomicValue Added

Sustainability is aboutengaging stakeholders

Sustainability is aboutdecision-makingfor the long term

Sustainability is about Responsivenessand flexibility

Sustainability is about capturing valuefrom environmental, social and economic factors

*Adopted from Owain Franks and Ann Lemmon, “Global HR Strategies and Trends”, presented at Saratoga Conference, March 18, 2002, Monterey, CA.

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Collaborative Organizational Design Methodology*

Education& Planning

Education& Planning

TeamDevelopment

TeamDevelopment

Definition& Analysis

Definition& Analysis

Mission &Vision

Mission &Vision

OrganizationDesign

OrganizationDesign

ImplementationPlanning

ImplementationPlanning

Implementation& Evaluation

Implementation& Evaluation

• Feedback• Learning• Adjustments

• Feedback• Learning• Adjustments

PerformanceManagement

System

PerformanceManagement

System

*Adapted from Gelinas, J. & Akiyoshi, Collaborative Organization Design, Oakland, CA: James Gelinas Organizational Consultants, 1993.

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Principles of Collaborative Design

1.1. Those who create tend to support.

2. Make the purpose of the change process explicit and understandable.

3. Involve input from representative points of view of all key stakeholders.

4. Key decision makers must agree to be active sponsors of the process and either lead the process or participate directly at key points.  

5. The process must include, from the beginning, a commitment to build and follow through on an implementation plan.

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C.O.D. Process - Key Questions

What is design? What’s involved? How will your team approach this task of design? How will your team build understanding and support?

Who are your customers? What do they need? What’s going on in the environment that is, or will, affect you?

Your customers? What do you deliver to your customers? Do the deliverables meet customer needs? Which deliverables should you continue to provide? What do you need to produce these deliverables? Do your inputs meet your needs? How do you produce these deliverables? What works in your work process(es)? Why does not? Why? Do you receive the feedback you need? Which aspects of your organization encourage commitment

and performance? Which do not?

Education& planning

Definition & analysis

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C.O.D. Process Key Questions

Why does your organization exist? What is your picture of the future state of your organization?

What are you doing? Accomplishing?

How are you going to move from your present organization to your new one?

What do you want to accomplish through this design effort? How will you know if you have accomplished it?

Is your new organization doing what you want it to be doing in the manner you want?

What impact is the new organization having on your customers, deliverables, work processes, and your ability to perform and be committed to this organization?

Mission & vision

Design

Implementationplanning

Implementation& evaluation

How do you want to design your organization to best serve your customers and achieve your mission and vision?

What areas do you hope to impact through this design effort?

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Factors in Organizational Design – Criteria

1. Alignment – aligning products & services with customer expectations (customer satisfaction)

2. Specialization – determining functional & technical expertise for quality (quality)

3. Scale economies – increasing returns to scale (cost)

4. Autonomy – establishing & maintaining individual & group self determination (initiative)

5. Communications/Collaboration – sharing ideas, information, and coordinating functions (coordination & creativity)

6. Learning – collecting, developing & distributing information & knowledge (growth)

7. Trust – establishing & maintaining exchange relationships (loyalty/solidarity)

8. Esprit de corps – establishing & maintaining identity, spirit & cohesiveness (morale)

9. Agility – responding and adapting quickly, creatively and flexibly to external & internal change (customer satisfaction)

10. Leadership – establishing & maintaining direction, & guiding performance (resource efficacy)

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Functional Structure*

Dean

Alumni AffairsOutreachResearchTeaching

Systems HR Finance

**Structures adapted from Cummings, T. & Worley, C., Organization Development and Change, Cincinnati, Ohio: Southwestern Publishing, 2001.

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Functional Structure

Advantages

Promotes skill specialization Reduces duplication of scarce

resources and uses resources full time

Enhances career development for specialists within large departments

Facilitates communication and performance because superiors share expertise with their subordinates

Exposes specialists to others within same specialty – facilitates growth

Disadvantages

Emphasizes routine tasks and encourages short time horizons

Fosters parochial perspectives by managers and limits capacity for top-management positions

Multiplies interdepartmental dependencies and increases coordination and scheduling difficulties

Obscures accountability for overall results

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Product/Service Structure - Admissions

Dean -Admissions

OperationsCollege Liaison

AlumniInternational& Transfer

Recruitment

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Product/Service Structure

Advantages 

Permits growth without loss of control

Permits accountability of performance

Divisional goals are clear Decision authority closer to

problems. Develops more well-rounded

managers Promotes decentralization of

decision making Greater flexibility in responding to

new opportunities

Disadvantages 

Duplication of resources between organizations

Reduces job specialization. Lose track of “state-of-the-art”

Encourages competition among divisions

Encourages suboptimization Focus on good of own organization rather than good of whole

organization  Cross-divisional planning and

coordination drain resources

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Customer/Geographical Structure - Recruitment

RecruitmentManager

InternationalDivision

EasternDivision

CentralDivision

WesternDivision

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Customer/Geographical Structure

Advantages

Recognizes interdepartmental interdependencies

Fosters an orientation toward overall outcomes and clients

Allows diversification and expansion of skills and training

Ensures accountability by departmental managers and promotes delegation of authority and responsibility

Heightens divisional cohesion and involvement in work

Disadvantages

May use skills and resource inefficiently

Limits career advancement by specialists to movements out of their departments

Impedes specialists’ exposure to others within same specialties

Puts multiple-role demands upon people and creates stress

May promote divisional objectives as opposed to overall organizational goals

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Matrix Structure

V.P. Admin.

FacilitiesHuman

ResourcesInfo. Tech.Finance

ProjectManagement

ProjectManager

FacilitiesHuman

ResourcesInfo. Tech.Finance

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Matrix StructureAdvantages

Makes specialized, functional knowledge available to all projects

Use people flexibly, since departments maintain reservoir of specialists

Maintains consistency between different departments and projects by forcing communication between managers

Recognizes and provides mechanisms for dealing with legitimate, multiple sources of power in the organization

Can adapt to environmental changes by shifting emphasis between project and functional aspects

Disadvantages

Can be difficult to implement Increases role ambiguity, stress,

and anxiety by assigning people to more than one project

Performance is lowered without power balancing between projects and functions

Makes inconsistent demands and can promote conflict and short-term crisis orientation

May reward political skills over technical skills

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Process-Based Structure – IT

Developing New Products ProcessP rocess O wn er

C ross F u n c tion a l Team M em b ers

Acquiring and Filling Custom er Orders ProcessP rocess O wn er

C ross F u n c tion a l Team M em b ers

Supporting Custom er Usage ProcessP rocess O wn er

C ross F u n c tion a l Team M em b ers

Senior M anagem ent TeamC h a ir an d K ey S u p p ort P rocess O w n ers

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Process-Based Structure

Advantages

Focuses resources on customer satisfaction

Improves speed and efficiency Adapts to environmental change

rapidly Reduces boundaries between

departments Increases ability to see total work

flow Enhances employee involvement Lowers costs do to overhead

Disadvantages

Can threaten middle managers and staff specialists

Requires changes in command-and-control mindsets

Duplicates scarce resources Requires new skills and knowledge

to manage lateral relationships and teams

May take longer to make decisions in teams

Can be ineffective if wrong processes are identified

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The Network Organization

The Traditional Hierarchy

Customers/Partners

Mid

dle

-Level C

ap

ab

ility

Develo

per

Frontline Entrepreneurs

Top-level institution builders

The Individualized Organization

* From: Christopher Bartlett, and Sumantra Ghoshal, The Individualized Corporation. New York: Harper Business, 1999.

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Network StructureAdvantages

Enables highly flexible and adaptive response to dynamic environments

Creates a “best of the best” organization to focus resources on customer and market needs

Each organization can leverage a distinctive competency

Permits rapid global response Can produce “synergistic” results

Disadvantages

Managing lateral relationships across autonomous organizations is difficult

Motivating members to relinquish autonomy to join network is difficult

Sustaining membership and benefits can be problematic

May give partners access to proprietary knowledge and technology

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Group Discussion

1. Which organizational design criteria are most for Computing and Information Science? Why?

2. What design options would best meet your criteria? Why?

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Key Factors in Service Performance

1. Engagement/Participation/Involvement

2. Collaboration and learning

3. Autonomy and freedom

4. Shared values and beliefs

5. Resource availability and flexibility (slack)

6. Connections with/between experts and staff

7. Access to knowledge base & opportunities to contribute

8. Organization development activities, e.g., strategic planning, network development, team building, etc.

9. Forums for civic engagement and social activities

10. Trust

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Implications for ChangeImplications for Change

Create opportunities for collaboration, e.g., strategic planning, team building, etc.

Invest in developing collaborative technologies. Invest in developing communities of practice. Map social capital ties that are relevant to tasks. Engage in collaborative organization design Build influence networks and allow some slack. Allow each individual to enter knowledge into the

organization. Give everyone access to the knowledge base and experts. Engage employees in social and design activities.

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Selected ReferencesSelected References

• Adler, P. & Kwon, S. Social capital: prospects for a new concept. The Academy of Management Review, Vol. 27, No. 1, January 2002, pp. 17-40.

• Coleman, J. Foundations of Social Theory. Cambridge: The Belknap Press of Harvard University Press, 1994.

• Cohen, D. & Prusak. L. In Good Company: How Social Capital Makes Organizations Work. Boston: Harvard Business School Press, 2001.

• Cohen, S. & Fields, G. Social capital and capital gains in the Silicon Valley, California Management Review, Vol. 4, No. 2, 1999, pp. 108-130.

• Coleman, J. Social capital in the creation of human capital. American Journal of Sociology, supplement, 1988.

• Cummings, T. & Worley, C. Organization Development and Change, Cincinnati, Ohio: Southwestern Publishing, 2001.

• Gelinas, J. & Akiyoshi, A. Collaborative Organization Design, Oakland, CA: James Gelinas Organizational Consultants, 1993.

• Ghoshal, S. and Bartlett. C. The Individualized Corporation. New York: HarperBusiness, 1997.

• Nohria, N. and Ghoshal, S. The Differentiated Network. San Francisco: Jossey-Bass, 1997.

• Putman, R. Making Democracy Work. Princeton, NJ: Princeton University Press, 1993.

• Sobel, C. Studied trust: building new forms of cooperation in a volatile economy. In Richard Swedberg, ed., Explorations in Economic Sociology, New York: Russell Sage Foundation, 1993.

• Wenger, E., McDermott, R., Snyder, W. Cultivating Communities of Practice, Boston: Harvard Business School Press, 2002.