Organization design in essence entails the plans in which an organization intends to achieve its stated objectives. Organization design play the role of formulating human resource management strategy; HRM strategy may be described as a calculated means by which a firm deploy its human resources to accomplish its purpose and basic objectives under the most advantageous circumstances. Therefore it defines the direction in which the firm intends to move and establish the framework of action through which it intends to get there (Grant, 2005).
Through organization design; all firms should have a human principles and they should always be formed and uphold on the foundation of mutuality of interest encompassing the participants. People see organizations as a means to help them to attain their goals while organizations need people to accomplish their objectives. Therefore if mutuality does not exist in this context, it makes no sense in trying to assemble a group and develop a cooperation because there is no common base on which to build
Another role of organization design is that of enhancing innovation by utilizing advanced technologies in the business world. Organizational effectiveness can only be achieved if the management is be able to incorporate good leadership, motivation, a well defined organizational structure, forming group dynamics and setting up good structures for communicating in the workplace. Research indicates that the advancement of technology has influenced the social, political cultural and economic aspects of people‘s life; more so, it has impacted both negatively and positively the operations of modern businesses and therefore organization design should encompass this aspect.
Such technologies are reported to have improved the business understanding of a number of transactional activities as well as development of new tactics to compete for market share in this contemporary world (Murray and Schoonover, 1988).
However it should be noted that each innovations such as that of computers and particularly the use internet carries both positive and negative effects to the business undertakings. Taking a look at the advantage of the business innovations in many firms, we find for instance that; the invention of computers has enabled the use of electronic materials carrying a lot of information that are suitable to be used by the stakeholders. This technology has also allowed the information to be put in large quantities thus making it cheap and simple for the interested parties e.g. customers, employees and the external publics to comprehend and get sufficient information at a ‘touch of a button’.
Organization design in any organization further plays a major role in the issue of quality management. Such practices like that of Total quality management (TQM) ensures that firms use the best ways of managing their operations for growth, sustainability and maximum profitability thus accomplishing there business long-term and short-term goals. The existence of quality management in any firm further ensures that human resource personnel are brought on board in the process of ensuring that there are continuous improvements in the way of doing things. Quality of service and products becomes the target for all the employees to aim and focus.
Total quality management style for instance ensures that the management should come up with programs that make all employees participate directly. Therefore, firms should concentrate on continuous improvements of there goods and services in order to meet the ever changing needs of the customers. In this respect therefore, contemporary business organizations should periodically train there human resource personnel to be in a position to compete both locally and globally (Palmer and Akin, 2006).
Organization design further ensures that the issues of business ethics and that of corporate social responsibility are adhered to in any business settings. In essence, business ethics and corporate social responsibility aims to ensure the wellbeing of the workforce, management, and the external publics from suffering from the consequences as a result of business activities of the particular organization. The span of business ethics is extensive and can be measured from different perspectives.
In this case the organizations’ management should ensure that several ethical considerations must be balanced for the business to be successful in its operations and relations with its employees and the surroundings of its business. Business ethics go in hand with social responsibility and they both define what the business ought to do in the current operations of the business. More often than not, managers have to determine good and right values for the organization. Theories in management are usually abstract and may not work well in all business. In ethical points of view there always exists a conflict as to whether the concept of good can be universal (Grant, 2005).
Organization design also plays a role in enhancing the success of firms in there quests for doing business globally. Global events and competition affects almost all modern businesses and organizations are increasingly facing challenges as a result of the ever changing external and internal environments. The economic and political linkages involving the migration of money, products, and people across national boundaries together with ideas and values have increased the pace of change, ambiguity, uncertainty, and unpredictability. This poses new threats and weaknesses to companies as well as providing strengths and opportunities in the business world.
By utilizing SWOT analysis, environment analysis is very crucial to businesses and it can be analyzed in two dimensions; external environment analysis and internal environment analysis. An external environment analysis reveals the organization opportunities and threats which are either current or potential, while internal environment analysis reveals the organizations strengths and weaknesses.
Research indicates that there are many things a company does but it should always concentrates on what it can produce best. The internal analysis facilitates the formulation of strategic plan which requires a clear understanding of the internal strengths acquired over time and any weakness that adversely impact on performance. Distinctive competencies are things that give a firm an advantage over similar businesses. Further research reveals that that no matter how good-looking an opportunity may be the business must have the competencies to capitalize on it. Further it is worth noting that an opportunity without the competence to capture it is no really an opportunity to the business.
The other component of organization design which is very crucial is that of formulating mission statement as well as vision statement. Mission statement of a firm should clearly curve out the direction to be followed by the firm in attaining its goals. In essence it indicates the basic reason for existence for any firm in a business world. Therefore it should not be too narrow or too broad in order to enhance attainment of the goals stated.
Vision statement on the other hand is a declaration that aids in coming up with a good mission statement and it usually focuses on the main objectives of the organization. For instance a good vision statement will clearly depicts market opportunities, organization’s customers, products/services and measures to be undertaken to achieve best results among other factors.
Another key aspect in organization design is that of managing the firm’s resources well in order to achieve the stated goals (McGahan, 2004).
A good organization plan should clearly spell out how organization resources for instance the assets should be used in order to avoid misuse and unwarranted losses. Any firm should plan for the activities to be carried out and ensure that sufficient funds and capital are provided to enhance the success of such activities. Further this aspect calls for the question of financial performance of a firm and thus in some instances modern and appropriate forecasting techniques such as the use of times series method of forecasting should be adopted by any firm in order to facilitate the ability to forecast sales and costs for future years with certainty.
Further the use of break-even analysis for instance should be utilized in order to forecasts profitability of the firm; such analysis ensures that a firm’s revenues are fully outlined and the expected costs ascertained in advance thus allowing room for corrections incase of deviations (Palmer and Akin, 2006).
Another key aspect of organization design is that of incorporating change to a firm which occurs due to various reasons that any management desires and sets up in order to advance its performance. The management therefore have to consult and involve the people who are going to be affected by the implementation of those changes since such changes necessitates thoughtful planning and considerations from the concerned management as well as sensitive implementation of such changes. For instance if human resources are forced to accept any change then they may not like and thus laxity in adopting such change which may lead to low productivity.
Therefore any change to be implemented in any firm should be authentic, reachable and further measurable. Change is an organization is something certain so that the organization can catch up with new technologies and challenges that arise with time (Fortune.com, 2008).
Therefore with all the above considerations, organization design plays a very important role in ensuring that corporate strategy of a firm is achieved in a desired manner.
Fortune.com (2008); Best Companies to Work For; Retrieved on the World Wide Web.
Grant, R.M. (2005): Contemporary Strategy Analysis: Oxford (U.K.); Blackwell Publishing Ltd, pp. 12-45.
McGahan, A. (2004): How Industries Evolve: – Principles for Achieving and Sustaining Superior Performance. Boston: Harvard Business School Press, pp. 23-67.
Murray, D. M. and Schoonover, S. C. (1988): Changing Ways: A practical tool for implementing change within organizations. New York: a division of American Management Association; pp. 123-145.
Palmer, I. and Akin, G. (2006): Managing organizational change: A multiple perspectives approach: Irwin, McGraw Hill pp. 34-78.