Organizational Design

Organizational design is a series of activities that seek to align all of an organization’s elements, with the aim of obtaining high performance levels and complying with goals set out in the business strategy. An organization’s internal structure helps to explain and predict behavior. That is, in addition to individual and group factors, structural relationships in which people work have an important influence on employee behavior and attitudes.

Organizational structure reduces ambiguities amongst employees by making it clear what their functions are, how to carry out these functions and who is accountable or who to go when a problem arises. Organizational structure defines and reinforces employee attitudes and motivates them to achieve high performance levels.

Organizational structure also sets limits on and controls what employees do. Organizations with low levels of formalization and specialization and with wide spans of control leave employees wide margins of freedom of action. On the contrary, organizations structured with high levels of formalization and specialization, a strict hierarchy of authority and limited delegation of authority leave employees little autonomy or room to manoeuvre.

The type of structure an organization will have is determined by a series of contextual variables such as its strategy and goals, size, technology and the environment in which it operates.

The organizational designs –simple structure, bureaucracy, matrix structure– have been transformed, and sometimes replaced, by a series of contemporary factors such as globalization, changes in information technology and increasingly shorter organisational life cycles. The emergent organizational structures are a result of the combined action of these factors.