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Organisation Design: Implications of HR (5ODG)

 

Organisational Design

 

Introduction

 

The dynamic business world has subjected organisations to unprecedented pressures. Organisations have had to thoughtfully and proactively plan for their operations to stay afloat. Technology, business regulations, and price fluctuations, are some of the issues that organisations have to adjust to, to match the market demand continually. The term organisational design refers to the process through which organisational efficiency and effectiveness are improved by aligning the organisational structure with its objectives. In other words, it is a procedure that ensures a company’s system is aligned with the goals of the business in its environment. The organisation design module equips learners with necessary frameworks, approaches, and practical skills to tackle an organisation’s issues.

This module exposes the learners to designing organisational structures and enables them to understand change and the environment. Additionally, learners will be taught about planning for transitions into different systems and change implementation and monitoring. People who enrol for this unit will be fully equipped with knowledge of business processes, workflows, duties, and responsibilities, how to analyse activities in a firm, and estimating volumes of work in a given organisation. Occasionally, organisational design is combined with organisational development. However, while organisational development broadly focuses on corporate culture and behaviours, organisational design is specific to organisational structures and processes. Importantly is to understand that design can be used as part of the organisational development process. The unit will explore different types of organisational structures such as;

  • Geographical structure
  • Product line-based structure
  • Functional structure
  • Market-based structure
  • Matrix structure

Learners will be exposed to information concerning both old organisational design and new approaches to the same. The most recent designs (modern corporate designs) are more empowering since they devolve the decision-making process down the organisation hierarchy. The current organisational structures have proven to be more flexible and, thus, agile in their operations. An excellent example of modern organisational design is the car industry.

 

Unit Suitability

 

Chartered institute of personnel development considers organisational design to be an essential competence for human resource practitioners. This is because organisational structure requires that the practitioners are familiar with external environmental factors, objectives, or needs of an organisation and people’s behaviour in an organisation. The unit is recommended for all organisational change practitioners, organisational leaders, and all people responsible for planning and supporting transformational change. HR practitioners or individuals aspiring to pursue a career in human resources should also enrol in the module.

 

Choice of Organisational design

 

Students of this module will learn that three primary factors influence the choice of an organisational design. The unit will first identify with the business objectives, and elaborate on the relationship between the organisational structures and business objectives. Aligning the purpose of the business to its structure is necessary for fulfilling a business strategy. As described by the PESTLE analysis, external environmental factors impact the organisational design and goals and thus must also be considered. The second factor influencing organisational design is the organisational culture. In instances where organisational design is used as an intervention for organisational development, culture must always be considered. The unit will give illustrations of the relationship between corporate design and culture using Handy’s cultural typology5. The framework is useful in providing clear guidelines for the parallels between design and culture. The framework is based on five types of organisational cultures, which include:

  1. Role cultures that correlate with the functional structure whereby senior managers (product line managers) control independent functions’ operations and co-ordinate themselves to attain the organisational objectives.
  2. Learners will also be taught about power cultures, where an individual or a small group dominates.
  3. The unit will also assess the task culture, whose organisation design is matrix organisations known for relying on connections to correspond to the task at hand.
  4. Task cultures are related to matrix organisations, which rely on connections to handle the tasks at hand.
  5. Organisations designed to give authority to a person or persons with expertise often use a person’s culture. These organisations mostly deal with consultancies, such as architects or specialists. The structures in these organisations often support individual interests.

All the different organisational cultures have their advantages and disadvantages, as will be explained to the learners. Knowing what organisational design to use in a particular organisation and transitioning from one culture to another are essential design elements that the unit will focus on. Students will learn that different organisation cultures can exist in one organisation. Therefore, deciding on the appropriate organisational design in such instances is a critical responsibility. The unit will comprehensively give case studies that will enable the learners to associate as well as understand the theoretical framework. The module not only exposes the students to designing local and national corporations but also gives an exposition of appropriate steps when designing international corporations. Students will understand that the most significant barrier in designing a global corporation is culture. Therefore, Hofstede’s framework that identifies international differences in cultural preferences will be taught. Some of the cultures covered by the framework include:

  • Competing or caring culture
  • Risk-taking or risk avoidance culture
  • Collectivism or individualism culture
  • Short term or long term investment culture
  • Power distance culture.

The third factor influencing the choice of organisational design is people processes and systems. The unit gives a detailed elaboration of how changing technology influences labour and, thus, an organisation’s operations. For instance, social media and the internet has become an essential tool for recruitment and performance management. Different organisations have adopted remote working techniques that require independent organisational designs to achieve the desired outcome. This module is necessary for organisations that might want to transition from one structure to another. Depending on the organisational needs, different companies may find it necessary to transition from a functional structure to a network approach.

 

Winding-up

 

Organisational design plays a vital role in shaping people processes that are mostly associated with human resource practitioners. It is the human resource manager’s role to ensure that the business strategy and organisation design are aligned. Organisation design is an essential tool that can be used to shape organisational culture. At the end of the unit, the students will be able to define organisation design, give types of organisation design, and have the practical knowledge on the importance of organisation design in given companies. A positive organisational culture is essential for achieving the business goals as well as improving the quality of work for the people. According to research conducted by CIPD, organisational design is particularly important to SMEs. This is because SMEs often have to review their structures as they grow and expand. Many start-ups begin with a structure where people work towards attaining the founders’ goals and objectives, but with time and growth, a hierarchy is established.

CIPD Level 5

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