Organisation Design

1.1 A brief account of the historical and theoretical basis of organisation design with a comparison of two different organisation design models

The essence of organisational design is to attain effectiveness and increase efficiency by developing a structure that best supports the organisational objectives. It means a defined structure where the roles and responsibilities are well put out, and the volumes of work are well understood throughout the organisation. Organisational design can be traced back to the 1770s when Adam Smith came with the model that defined division of labour.

Adam Smith and the Division of Labour

The division of labour as implemented by Adam Smith was meant to hasten economic growth through having a specialised workforce. The large units were broken down into smaller functions, and individuals in every function were given individual tasks that they were expected to get the right skills to ensure that they could execute their roles efficiently. The expectation was to bring out experts who had the right skills and knowledge about the particular role assigned and have a ripple effect throughout the organisation. Everyone will be working on the areas where they are most gifted. Simultaneously, the reduced movements of the individuals from one unit to the other saved operational time. They allowed the worker to focus on one particular task, which increased efficiency (Dhamee, 1996). However, the model had its share of flaws, which was mainly due to too much focus on a particular task and the repetition of the same things by the workers daily. Adam realised that this led to ignorant workers who lacked motivation and were dissatisfied. To provide a solution, Adam came up with the concept that the government had the responsibility of educating the workers, which was meant to reduce the detrimental effects division of labour had on workers in their day to day activities (Munger, 2019).

Henry Ford ‘Fordism’

Fordism, which is also mass production, began in 1914 when Henry Ford realised that having a moving assembly that would interchange different parts of the motor vehicle was time-saving and led to the production of many vehicles within a short-timer. This process had an immediate effect as it reduced the cost of manufacturing and, at the same time, the cost of purchase and allowed America to be the first country to have a high number of people who could afford to buy cars (BBC NEWS, 2009). This model was not so popular among the labourers. Therefore Ford had to increase the wages to retain the unskilled workforce, and this was easily accommodated by the high turnover brought about by the production in high numbers. However, unionists met mass production with resistance from union workers who were advocating for better working conditions and lack of exploitation of the workers by the foremen. Mass production can therefore be said to be the foundation for high wages. Simultaneously, the attention it got from the unionists helped create better working conditions for the workers, which is seen even in the current days.

Organisation design models  

The Nadler & Tushman’s Congruence Model; was designed by David Nadler and Michael Tushman in the early 1980s. Its main focus was to look at the inputs and the outputs and come up with solutions for possible problems that may affect the effectiveness in performance. It works with the notion that for performance to be effective, the people, culture, work and structure should be in sync (congruent). The model allows one to analyse each element independently and then look at how they relate to one another, then come up with the best structure that suits every element (Caredda, 2020). The tool allows one to identify the problems but does not provide a solution for the same, and therefore, one has to apply other models.

Figure 1 the Congruence Model

Galbraith’s Star model; differentiates the organisational policies into five subsets that form a star once combined. The first subset is the strategy that contains the objectives and the plan to ensure that the organisation can achieve the same within a specified time frame. The second subset is the structure where specialities required are determined, and the departments required are defined. Simultaneously, the authority that will help manage the different departments is placed under the structure. The processes define the flow of information and the systems to support the same (Garner, 2015). The fifth subset is the rewards, and it entails the motivation and incentives used to retain the workforce and the expected compensation based on the roles. Finally, the people fall in as the fifth subset, which looks at the mind set and the skills required.

Figure 2 Galbraith’s Star Model

Similarities and differences between The Nadler & Tushman’s Congruence Model and Galbraith’s Star Model

            One of the main similarities between the two models is the limitation they have on leaving out some key elements in the organizational structure. They have specific elements that do not necessarily cover all the needs and requirements for the success of the organization. They both have a strong opinion about the people and the structure and recognize the importance of the two aspects in the design and how good management and collaboration will increase efficiency and effectiveness. The main difference between the two models is that the star model has the reward as a component and puts the motivation of the employees while the congruence model focuses on the work.

1.2 An explanation of the relationship between organisational elements, business strategy and organisation design

The key elements in an organisational structure are the job design, delegation of duties, setting up of departments’, chain of command and span of control. They are aimed at ensuring that the organisation can meet all the requirements to achieve the objectives set. On the other hand, the business strategy is the outline that contains the plans and actions to be taken to achieve the organisational goals. The organisational design ensures that the structure and objectives are in line and that all the factors required are well in place (Leonard, 2018). The organisational elements are the support system for the business strategy as the strategy solely relies on the elements put in place. Then the organisational design combines the two to come up with a balanced environment. ,

2.1 An analysis of some of the key factors that influence organisation design

Strategy is one of the main factors that influence organisation design as the design is supposed to ensure that the organisation can achieve the objectives set. For instance, an organisation that uses the differentiation strategy to ensure they always have the newest product in the market will have an organisational design that best suits the same (Vulpen, 2020). They will ensure that they have a department that solely specialises in research and innovations to ensure that they are always a step ahead in the market.

Technology also affects the organisation design, which goes a long way in implementing the components in the strategy. The bigger the organisation, the more complex the technology, and therefore there is a need for designing the organisation in a way that accommodates the technology. New inventions in technology act as guidelines for the organisation to place itself in the market, and therefore it is important to align the organisational design with the available technology (CIPD, 2020). Technology also increases the efficiency within an organisation and, at the same time, reduces the cost incurred in the process.

Physical aspects within the organisation have a direct effect on the design. The environment that the organisation operates in will either be stable or dynamic, and these two factors greatly impact the way the organisation will thrive and the methods used to achieve the objectives (CIPD, 2020). Understanding the physical aspects surrounding the organisation will enhance proper planning and achievement of efficiency and effectiveness.

Agility is the ability of the organisation to adapt to new ideas and inventions as they come and the flexibility within the workforce. Being able to understand how agile the organisation is, allows the management to come up with the right design that will be able to come up with the right structure to achieve organisational goals (Vulpen, 2020). At the same time, designing the organisation in a manner that the workforce and inventions are agile creates a competitive advantage with the industry players since there will be the ability to always be ready to move as things change in the external environment.

2.2 A brief assessment of some of the implications of organisation design for work processes, productivity and the workforce

The integration of people information and technology has a direct impact on the work processes within the organisation. When the right organisation design is implemented, it enhances areas of customer support and reduces the time taken for the customers to get their feedback. It also ensures that supply chain management is properly managed, and this leads to an increase in efficiency (CIPD, 2021). A poor design will, however, have a negative impact on the work processes, and the organisation will not be in a position to achieve its objectives set due to the inconsistencies that will be met along the way.

With the right organisational design, productivity increases, and there is an optimum performance by the employees. Once the people are effectively integrated with information technology, it becomes easy for them to perform tasks that would have otherwise been difficult to accomplish. Understanding the design ensures that the employees are privy to information and the manner in which different processes should be implemented, and therefore it saves time and increases efficiency (Root, 2017). Lack of a proper design results in longer times and increased errors in the implementation; therefore, the employees take more time as they try to correct the mistakes. The workforce also greatly relies on the design of the organisation in order to perform effectively. The design may also be used to attract the right talent, and therefore organisations may use the same to gain a competitive advantage in the labour market.

2.3 A brief evaluation of the linkages between organisation design and people management and development strategies

The work environment is constantly changing, and therefore, it is important for organisations to ensure that the organisational design is in line with the changes that affect people management. In recent times, the working population has changed, and younger people make up the larger labour market, and hence organisations should have designs that have the capability of attracting the younger population and at the same time ensure that the already existing older population is able to thrive in the same environment. Understanding the workforce is an important element as it ensures that organisations are able to tap the right talent, which in turn increases productivity (Pingboard, 2017). The new technological advancements enable organisations to manage the labour force effectively, and the labour force is able to deliver the expected objectives, and thus there is a mutual benefit for both the organisation and the employee.

The development strategies also rely on the design in order for them to be effectively implemented. The traditional designs work for organisations with simple development strategies that do not require a complex structure. This means that it is important for the organisation to understand the needs for the strategy to be complete and align the same with the available design (Pingboard, 2017). Both the design and strategy can be modified in order to achieve the desired goal set by the organisation. While handling long term and complex development strategies, it is important to use contemporary design as this is inclusive of the different aspects required to achieve the objectives effectively.

Reference list

BBC NEWS., (2009). BBC NEWS | Photo journal: Rise and fall of mass production, Fordism. News.bbc.co.uk. http://news.bbc.co.uk/2/shared/spl/hi/picture_gallery/07/business_rise_and_fall_of_mass_production/html/1.stm

Caredda, S., (2020, February 18). Models: Nadler-Tushman Congruence Model. Sergio Caredda. https://sergiocaredda.eu/organisation/tools/models-nadler-tushman-congruence-model/

CIPD., (2020). Organisation Design | Factsheets. CIPD. https://www.cipd.co.uk/knowledge/strategy/organisational-development/design-factsheet#gref

CIPD.,( 2021). Information on Organisation Design & Development. CIPD. https://www.cipd.co.uk/knowledge/strategy/organisational-development#gref

Dhamee, Y., (1996). Adam Smith and the Division of Labor. Www.victorianweb.org. https://www.victorianweb.org/economics/division.html

Garner, B., (2015). Implementing Your Business Model With the Galbraith Star Model. Strategyzer.com. https://www.strategyzer.com/blog/posts/2015/2/03/implementing-your-business-model-with-the-galbraith-star-model

Leonard, K., (2018). Six Elements of Organisational Design. Chron.com. https://smallbusiness.chron.com/six-elements-organisational-design-18039.html

Munger, M., (2019, August). Division of Labor, Part 1 | Adam Smith Works. Www.adamsmithworks.org. https://www.adamsmithworks.org/documents/division-of-labor-part-1

Pingboard., (2017). The Relationship between Organisational Design, Organisational Structure, and Organizational Charts | Pingboard. Pingboard.com. https://pingboard.com/org-charts/organisational-design

Root, G. N., (2017). The Impact of Organisation Structure on Productivity. Chron.com. https://smallbusiness.chron.com/impact-organisation-structure-productivity-21902.html

Vulpen, E. van., (2020, June 29). Organisational Design: A Complete Guide. AIHR Analytics. https://www.analyticsinhr.com/blog/organisational-design/#:~:text=There%20are%20five%20factors%20that%20greatly%20impact%20organisational%20design%3A%20strategy