Shifting Organization Structure Design

There are many kinds of style how a company decided to design its structure. Some of them are more practical but traditional, and some of the styles are refreshing and innovated. Nevertheless, no matter what the style the organization design is, the important thing is that the company should have a working organization structure for itself. In the article Practical approaches to organization design by Sargent and McConnell, the authors illustrate that a working organization design must meet business goals and create efficiency. Furthermore, the authors also suggest an effective organization design will have five major benefits for the company.

  1. Improved employee satisfaction
  2. Improved customer satisfaction
  3. Improved financial performance
  4. Improved competitive advantage
  5. Significant return on investment

People never stop changing so does the business world. As result there is no one style that could dominate forever. The exsisting style of organizational design might become unsuitable after some internal or external environment shift as we learn about the case of Kodak in class. According to Galbraith in the article The Future of Organization Design, an organization will adapt to necessary system design to fit its desire style or what the firm is focusing on. He gave example that P&G has developed its organization design from functional to regional then later to customer oriented. With each transformation the company did not completely abandoned the previous style. What P&G did is to create some kind of unique hybrid to complement whatever the company is focusing at the time.

In the case of the P&G, the company began as a functional design: “activities are group together from the bottom to the top of the organization.”(Anand & Daft) This is the most common style and traditional design for any organization. The company is divided into groups of similar activities. Later on Galbraith mention that after the 1990’s P&G has shift in to a customer base organization design. The company creates team that specailly for its major customer, and the company has a global customer unit department. The example given in the article is that P&G has a Wal-Mart team that has around 250 workers and the team “report to the regions as well as the CEO.”

In conclusion, the example of Proctor & Gamble, the company adopted or revolutionized its organization design to suite whatever the business environment at the time. By doing so P&G are able to stay competitive. Even there are many styles to design an organization and might be even more new styles in the future, the key idea for the company is to have a organization design that can fulfill the purpose of the business and achieve company goals.

References:

1) Jay R. Galbraith. (2012). The future of organization design. Journal of Organization Design, 1(1)

2) Roessler, C., & Koellinger, P. (2012). Entrepreneurship and organization design. European Economic Review, 56(4), 888. doi:10.1016/j.euroecorev.2012.02.014

3) ANAND, N., & DAFT, R. L. (2007). What is the right organization design? Organizational Dynamics, 36(4), 329-344. doi:10.1016/j.orgdyn.2007.06.001

4) Sargent, A., & McConnell, T. (2008). Practical approaches to organization design. CMA Management, 81(9), 22-25. Retrieved from http://search.proquest.com/docview/197815281?accountid=35875

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