Chapter Twenty-Three in Practicing Organization Development, 2010
Organization design is a field that is of increasing interest to many organization development (OD) professionals. Businesses are developing ever more-complex strategies that often require multi – dimensional global organizations to execute. In addition, constant technological improvements have created higher expectations for organizations to process information and make decisions faster.
As a result, business managers are looking for assistance in making smart decisions about the shape of their organizations. They expect that their HR generalists and specialists will be knowledgeable about organization design frameworks, methods, and tools. Business clients also expect that their HR partners will have the time and capability to help them sort through these complicated and high – value decisions.
This chapter will define organization design and its relationship to OD work. It will present key organization design concepts and principles to introduce the OD practitioner to the language of organization design and provide an essential tool — design criteria — for linking strategy to organizational capabilities. Finally, the chapter will highlight some of the competencies of organization design so that the reader can begin to assess his or her own interest in and aptitude for the field.
THE RELATIONSHIP OF ORGANIZATION DESIGN TO ORGANIZATION DEVELOPMENT
The first question to address is, “What is organization design?” Organization design is what John Boudreau calls a “decision science” (Boudreau & Ramstad, 2007, p. 15). In many fields there is a decision science that focuses on setting frameworks and making sound choices among competing alternatives. Those fields often have a complementary “practice area” that is focused on implementing the appropriate tools and interventions to successfully execute on the selected framework. For example, marketing is a decision science: where and how we compete, how we differentiate our products and services. Sales is the complementary practice area, which identifies how we use our skills and tools to execute on our marketing plans. Another example can be found in the distinction between finance, which is the decision science for evaluating and making investment decisions, and accounting, the practice of ensuring that those decisions are based on accurate data.
Organization design is a decision science for selecting among competing alternatives in order to match the optimal organizational model to the strategy. Making good design choices is not enough, of course, to successfully carry out a strategy. Organization development can be thought of as the discipline (or “practice area”) of implementing these design choices. Organization design constitutes the link between business strategy and OD, as illustrated in Figure 23.1.
Without organization design, there is no framework within which to determine what OD activities will have the most impact and when they should be carried out. Therefore, even if the OD practitioner is not involved directly in organization design decisions, adding this knowledge to his or her toolkit is useful. Understanding organization design concepts and options and being able to analyze existing designs and anticipate the predictable consequences of various choices will aid practitioners in making better decisions regarding what OD interventions will be most effective and how best to carry them out.