Sanjay Singh, Ph.D.

Design of Work Organizations

Course Content
Course Outline
Primer
• What are organizations?
• How organizations are different from firm or companies?
• Why and how to design organizations?
• What are certain markers that indicate the necessity of organization
design?
 Systems and process
Organizations & Organization Design that interact with
environment
Allocation of power and
responsibility
in organization
Social
entities Allocation of power and responsibility
in organization in a way that we meet
Organizational goals

Ecology Organizations Purpose

CTQ1:
Is a proprietary shop an organization? CTQ2: What is Organizational Design
Systems And how it is different from Organizational structure?
Organization Design Vs Organizational Structure
• Design of systems and structures • Refers to formal reporting
to improve organizational relationships, number of levels in
capabilities the hierarchy, and the span of
• Involves creating systems and control of managers
processes that create effective • Involves grouping of individuals
organizations in departments and grouping of
departments into total
organization
Is it design of an organization or reflects
structure?
CTQ1: What design principles
you infer from these charts?

CTQ2: Which company

is most likely to attract talent?

CTQ3: Given skillset, with which

company you would like to work?

CTQ: What role organizational design

plays in determining the structures?
How to design organizations and what tools
we need for it?

Gailbraith’s Two Cardinal Rules of Design

1. There is no one best way to organize
2. Any way of organizing is not equally effective
3. If you can predict future try different structures, if you cannot stick to one.
Berns and Stalker (1961)
- 20 British and Scottish firms
Design is either mechanistic or organic
- Mechanistic forms are effective in stable markets while organic
forms are effective in dynamic and volatile markets
Classic Studies
Alfred Chandler
- Studied 70 large American firms
- Organizational designs are not uniform across industry
- The most important determining factor of Organizational design
appears strategy
- Its difficult to say whether strategy comes first or structure
- Firms are centralized when their strategy focus on single industry,
and decentralized when they focus on diverse industries
Woodward
- 100 British firms
- Structure is effective only when organizations have control on
technology
Richard Hall
- Confirmed Berns and Stalker’s findings for internal organization
departments
What is true of outside, is also true of inside. [If a rule applies to
environment then it also applies to company]
- Mechanistic forms are effective for production department while
for R&D organic forms will be more effective.
Case Questions
• What are the main problems faced by the iQmetrix?
• Will Holacracy solve the problems faced by iQmetrix? Why and Why
Not?
• If Holacracy can solve the problem of iQmetrix then can it be made to
fit with the current organizational culture?
• If iQmetrix decided to go ahead with Holacracy then does it make
sense to pilot Holacracy first or roll it out to whole organization?
• If iQmetrix decided to take the pilot approach which office would be a
good site for the pilot and what should the pilot look like?