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THE STAR MODEL

Presentation by Faizan Usman Mehwish Rabeet


Elements of Effective Design Decisions

1. Define the Right Problem


Clarify strategic priorities: Strategy should be explained and understood clearly.
Define Case for Change: Data from customer feedback, interviews, Focus Groups.
Set Design Criteria: Think in a long run.

2. Use Effective Design Frameworks


Star Model
Elements of Effective Design Decisions

3. Involve the right people in the process by Designing Teams.


The Expert Model
Executive Team
Delegated Design team
Multi-layer Design Team
Design Charette

4. Tie org and talent together.


Make the right talent choice.
Design the direct report structure.
Define the work of the Executive Team

5. Implement the change.


The Star Model
The Star model is an
organizational design framework
that helps and prepares managers
to choose the right design policy.
The model used design policies
that guide organizational decision
making and behavior.

Jay Galbraith, author of star model


The Star Model
The Model relies on following five
categories of design policies:
Strategy
1) Strategy
2) Structure
People Structure
3) Processes
4) Rewards
5) People
Reward Processes
Strategy
Itcomes first in the Star Model.

Vision, mission, and values as well as goals and objectives.


Strategy sets out the direction of the organization.
For making trade-offs and choosing among alternative options
inthe remaining four elements or organizational design.
Todays Realities:
Complex Strategies Why
Global Expansion: and reality
of competing with ever more
sophisticated local players.
??!!
Changing Business Models:
and the need to manage a
portfolio of varied business
models.
Innovation: in Process as well
as product.

Efficiency Pressure: Increase


volume without increasing
overheads.
Structure
Centralized or Decentralized

Structure determines the type and number of job specialties needed.


Specialization, Shape, Distribution of power, Departmentalization
Number of departments and people in each department.
Placement and movement of power and authority, and is the basis for
forming departments.
Functional Structure Product Structure Market Structure

Types of Structures
Geographical Structure Process Structure
Processes
Flow of Information and Decisions

Flows can happenVertically or Horizontally.


Vertical processes: Allocatingfunds and talent via budgeting and planning
Horizontal processes: Designed around workflow and are carried
outthrough lateral relationships between departments.
Rewards
Motivate Workers to do the Right Things

Alignthe goals of employees with the goals of the organization


Must use appropriate incentives to motivate workers to do the right
things to fulfill the strategic direction of the organization.
Must be similar with the other design areasto influence strategic
direction.
People
Produce Talent &buildCapabilities

HR policies governrecruitment, promotion, rotation, training and


development.
Policies are designed to produce the talent andbuildthecapabilities
necessary to execute the strategic direction of the organization.
They must be in harmony with the other design areas.
Implications of Star Models
Organization chart is becoming less important while processes,
rewards and people are becoming more important.

Trendiness is not a sufficient reason to design organization


rather a design that best meets the criteria derived from
Strategy.

An alignment of all the polices will communicate a clear,


consistent message to the companys employees.

Star Model consists of policies that leader can control and that can
effect employees behavior.
Overcoming Negatives
Star Model is not just another organization design walkthrough
but a way to negate the design flaws inherit in different structures.

Management can identify Negatives in preferred structure and


counter it by designing other polices, to achieve Positives

For Example, Sometimes a decentralize organization wants to


centralize certain departments to better serve customers and avoid
duplication of resources like an IT Department in Org.
To counter shortcomings of this Centralize department, management
can design appropriate :
Processes: Horizontal teams and Central unit can agree on target
performance level, expected of IT Dep To perform.
Reward: Performance will be measured and rewarded on meeting
planned goals.
People Polices: Mix placements from different departments.
The End