Organizational design is a step-by-step methodology which identifies dysfunctional aspects of

work flow, procedures, structures and systems, realigns them to fit current business
realities/goals and then develops plans to implement the new changes. The process focuses on
improving both the technical and people side of the business.

For most companies, the design process leads to a more effective organization design,
significantly improved results (profitability, customer service, internal operations), and
employees who are empowered and committed to the business. The hallmark of the design
process is a comprehensive and holistic approach to organizational improvement that touches all
aspects of organizational life, so you can achieve:

Excellent customer service

Increased profitability

Reduced operating costs

Improved efficiency and cycle time

A culture of committed and engaged employees

A clear strategy for managing and growing your business

By design were talking about the integration of people with core business processes, technology
and systems. A well-designed organization ensures that the form of the organization matches its
purpose or strategy, meets the challenges posed by business realities and significantly increases
the likelihood that the collective efforts of people will be successful.

As companies grow and the challenges in the external environment become more complex,
businesses processes, structures and systems that once worked become barriers to efficiency,
customer service, employee morale and financial profitability. Organizations that dont
periodically renew themselves suffer from such symptoms as:

Inefficient workflow with breakdowns and non value-added steps

Redundancies in effort (we dont have time to do things right, but do have time to do
them over)

Fragmented work with little regard for good of the whole (Production ships bad parts to
meet their quotas)

Lack of knowledge and focus on the customer

Silo mentality and turf battles

 Lack of ownership (Its not my job)

Cover up and blame rather than identifying and solving problems

Delays in decision-making

People dont have information or authority to solve problems when and where they occur

Management, rather than the front line, is responsible for solving problems when things
go wrong

It takes a long time to get something done

Systems are ill-defined or reinforce wrong behaviors

Mistrust between workers and management

An organizational structure defines how activities such as task allocation, coordination and
supervision are directed toward the achievement of organizational aims.[1] It can also be
considered as the viewing glass or perspective through which individuals see their organization
and its environment.[2]

Organizations are a variant of clustered entities.[citation needed]

An organization can be structured in many different ways, depending on its objectives. The
structure of an organization will determine the modes in which it operates and performs.

Organizational structure allows the expressed allocation of responsibilities for different functions
and processes to different entities such as the branch, department, workgroup and individual.

Organizational structure affects organizational action in two big ways :

First, it provides the foundation on which standard operating procedures and routines rest.

Second, it determines which individuals get to participate in which decision-making

processes, and thus to what extent their views shape the organizations actions.[2]

Purpose
Organizational structure provides guidance to all employees by laying out the official reporting
relationships that govern the workflow of the company. A formal outline of a company's structure
makes it easier to add new positions in the company, as well, providing a flexible and ready
means for growth.

Significance
Without a formal organizational structure, employees may find it difficult to know who they
officially report to in different situations, and it may become unclear exactly who has the final
responsibility for what. Organizational structure improves operational efficiency by providing
clarity to employees at all levels of a company. By paying mind to the organizational structure,
departments can work more like well-oiled machines, focusing time and energy on productive
tasks. A thoroughly outlined structure can also provide a roadmap for internal promotions,
allowing companies to create solid employee advancement tracks for entry-level workers.

Flat Organizational Structure

There are relatively few layers of management in what is termed a flat organizational structure.
In a flat structure, front-line employees are empowered to make a range of decisions on their
own. Information flows from the top down and from the bottom up in a flat structure, meaning
communication flows from top-level management to front-line employees and from front-line
employees back to top management.

Tall Organizational Structure

There are numerous layers of management in a tall organizational structure, and often inefficient
bureaucracies. In a tall structure, managers make most operational decisions, and authority must
be gained from several layers up before taking action. Information flows are generally one-way
in a tall structure from the top down.

Considerations
It is common for small businesses to lack a solid organizational structure. All employees in
startup companies can be required to perform a range of tasks outside of their official job
descriptions, and a good number of employees in startups have generous leeway in making
decisions. Aside from that, all employees in a startup generally know who they report to, since it
is usually a single person or group the owner or partners. It is very important to have a formal
organizational structure in place before your company grows so large that your workforce
becomes unwieldy.

Organizational design is a comprehensive framework for integrating the key elements of an

organization: people, information and technology. Organizational design includes the elements of
organizational structure - management hierarchies and departmental groupings - while going
further to consider a company's technological infrastructure and operational workflow. Creating a
formal design for your organization can provide numerous advantages, but a solid design can
carry distinct disadvantages for certain companies. Knowing when formal design is beneficial or
disadvantageous is a key to using design effectively.

Clarity
A solid organizational design provides clarity in reporting relationships, decision-making,
information flows and work processes. With a well-crafted design, everyone knows exactly what
they are responsible for doing, who they report to and what other co-workers are responsible for
doing. This can be advantageous in increasing operational efficiency, especially for larger
companies. There are drawbacks to this level of clarity, however. In small startups with no
formal structure, for example, employees can be asked to perform a wide range of unrelated
tasks. In highly-structured organizations, on the other hand, employees may avoid or refuse to
perform work outside of their job descriptions.

Growth
A well-designed company can find itself better prepared to take advantage of growth
opportunities than more loosely-designed companies. A solid organizational design can include a
robust technological infrastructure that allows the company to easily add new employee
workstation equipment into the company network, for example. An organization with no
technology planning, on the other hand, may face unnecessary challenges adding even a single
employee.

Adaptability
Organizational design strategies respond to predominant marketplace conditions and industry
trends. The problem with this focus is that conditions and trends change frequently or constantly
in most industries. Putting too much thought into organizational design can leave business
owners with companies well suited to today's competitive environment, but less able to adapt to
tomorrow's trends. More loosely organized companies can adapt more quickly to gain
competitive advantages.

Opportunities
Solid organizational designs can be advantageous or counter-productive when it comes to
encouraging employees to strive for advancement opportunities. A well-structured and growing
company with a formal advancement track can motivate employees to excel, for example, while
a company with a lean organizational structure can convince front-line employees that there are
no opportunities to move into management. More loosely organized companies without formal
designs may be able to create supervisory positions specifically for high-performing employees,
or to continually increase front-line employees' pay without reaching pay-grade limits.