Organizational design shapes a company's hierarchy, processes, and systems to align with its culture and goals. It includes components like span of control, chain of command, and levels of hierarchy, and is driven by principles such as efficiency and flexibility. Redesigns may occur due to expansion, complexity, or employee engagement, with models like the McKinsey 7S Framework guiding the process.
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Organizational design is the methodical approach to shaping an organization's structure, processes, and systems
Span of control
The span of control defines the number of subordinates managed by a supervisor and can be broad or narrow
Chain of command
The chain of command clarifies the line of authority and reporting relationships within the organization
Number of management layers
The number of management layers, known as levels of hierarchy, can create tall or flat organizational structures
The design of an organization is underpinned by principles that support its unique nature and strategic vision
Organizations may opt to redesign their structures for various reasons, such as expansion, cost-cutting, or addressing employee disengagement
Redesign efforts are aimed at improving organizational performance and realigning the structure with the changing business landscape
An employee-centric approach to organizational design considers the pivotal role of employees in the success of the organization
Delayering reduces management levels to cut costs and expedite decision-making
Delegation involves assigning responsibilities to lower-level managers to empower them and alleviate the workload of senior management
Empowering employees by entrusting them with greater responsibilities and providing constructive feedback can lead to improved organizational outcomes
Organizational design models, such as the McKinsey 7S Framework, offer structured approaches to assess and enhance organizational effectiveness
These models consider tangible elements like strategy, structure, and systems, as well as intangible elements such as skills, staff, style, and shared values
By evaluating these components, organizations can make informed adjustments that reinforce their purpose, values, culture, vision, and mission
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Organizational Design Components
Structure, processes, systems - elements shaped to fit culture, strategy, operations.
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Hierarchy in Organizational Design
Establishes levels of authority, streamlines decision-making, can be formal or informal.
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Outcome of Effective Organizational Design
Supports strategic direction, promotes operational efficiency and effectiveness.
