Importance of Organisational Design Theory in HR and Change Management

This report discusses the significance of organisational design theory in enhancing employee value and contribution to organisational success. It covers topics such as HR approaches and techniques, emerging HR developments, and the role of organisational design in change management. The report focuses on ARM Holdings plc, a global semiconductor and software design company.

Human Resources-Value
and Contribution to
Organisational Success

EXECUTIVE SUMMARY
The human resources of company play an important role in achieving company goals and
objectives who must be developed in such a manner that they can use their skills and talents and
put their full efforts in improving the productivity of company. In this report the importance of
organisational design, human resources, contemporary HR developments, change management
etc. in improving employee value and contribution towards organisational success will be
studied.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1 Importance of organisational design theory......................................................................4
M1 Appropriate theories and concepts to critically evaluate importance of organisational
design......................................................................................................................................6
TASK 2............................................................................................................................................6
P2 Approaches and techniques used by HRM.......................................................................6
M2 Critically analyse different approaches to motivate human capital and knowledge
management............................................................................................................................7
TASK 3............................................................................................................................................8
P3 Research and knowledge for emerging HR developments...............................................8
M3 Evaluation of how HR developments affect role of HR function in future.....................9
TASK 4............................................................................................................................................9
P4 Evaluation of how organisational design respond and adapt to change management......9
M4 Evaluation of changes which can affect organisational design.....................................10
RECOMMENDATIONS...............................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
HR of an organisation plays an important role in motivating employees so that their
performance can be enhanced and they can contribute their skills and knowledge towards
achievement of company goals in an efficient manner. HR functions and strategies help in
increasing the contribution of employees towards the success of organisation by motivating them
so that they can come up with new and innovative ideas which can help the company in gaining a
competitive advantage in market (Amankwah-Amoah and Nyuur, 2016). This report is based on
ARM Holdings plc which is a global semiconductor and software design company which was
founded in 1990 and has its headquarters in England, UK. In this report importance of
organisational design theory, approaches which are beneficial for employees, research to support
HR developments, change management etc. will be discussed.
TASK 1
P1 Importance of organisational design theory
Organisational design is a sequential process in which the dysfunctional aspects of work
flow, procedures, structures and systems are identified which are then realigned with
organisational goals and then plans are developed so that new changes can be implemented. This
process is followed is so that improvement can be brought in employee performance and also to
involve innovations in company. This helps the company in achieving better customer
satisfaction, employee performance and competitive edge in market.
Organisational design theory: This theory helps organisations in structuring the
company's hierarchy so that the relationship between organisation and and its members can be
designed within a set of defined rules and procedures (Chiappetta Jabbour, Mauricio and
Jabbour, 2017). This theory helps in building the relation of staff members with company so that
they can work together in a proper manner in order to achieve company goals. It also help in
determining the level of employee engagement in company which defines the level of motivation
among workers and their enthusiasm to increase their value and contribution towards the
company success. In ARM about 2,050 employees work across its 30 sites in 15 countries who
are highly involved in company procedures and the HR of company focus on employee
development, training and reward system so that high innovations are brought in company.

Importance of organisational design theory in context of organisational structure and
fulfilling organisational strategy:
Good organisational structure helps to improve communication, increase productivity and
performance of employees which help in increasing innovation in company. It also help in
building an effective workplace where employees can use their full potential to achieve company
objectives efficiently. It is important that the organisation is designed in such a manner so that
better relations are build among staff members and managers of company so that employee
performance can improve which help in making better decisions. It also help in improving the
quality of work so that higher proactivity of company can be achieved (Chinyamurindi, 2016).
Organisational strategy is the plan which is formulated by company so that it can be
executed by taking appropriate actions and making decisions which can help in achieving
company goals in an efficient manner. The organisational design determines the manner in which
decisions are made in company so that company goals are achieved. Following are the different
organisational design theory which can be applied in ARM holding so that organisational
structure can be formed in a way which can help in fulfilling organisational strategy: Traditional organisational theory: Under this theory the structure of organisation is
hierarchical where the power flows vertically and upward and employees get instructions
from leaders. All the employees follow a chain of command which means that employees
are not involved in decision-making and have to follow instructions which are given to
them. This theory is followed in Aston Martin, Jaguar etc. where only one person is
responsible to take decisions.
 Open system theory: Under this theory the organisation is designed in such a manner that
an open system is applied in company where employees are free to approach managers in
relation to issues or ideas. This help in free flow of information and ideas in company
which is important to bring innovations in company. This theory is followed in many
companies like Starbucks, ARM holdings where employees are free to involve in
decision-making. Employee engagement is high in this structure which help the company
in implementation of organisational strategy in an efficient manner which help them in
becoming highly competitive in market (Herbel, Rocchigiani and Ferrier, 2015).

M1 Appropriate theories and concepts to critically evaluate importance of organisational design
There can be various theories and concepts which can be applied so as to decide the
organisational design for company which can help in achieving company objectives. These
theories must be applied in such a manner that organisational design with organisational strategy
so that goals can b achieved efficiently. ARM uses open system theory where workers are
allowed to openly share their ideas and opinions and get involved in company decisions which
help in achieving company goals in an efficient manner.
TASK 2
P2 Approaches and techniques used by HRM
For companies which depend on employees for their skills, talents and knowledge so that
innovation in their processes, products or services can be brought it is important that the HRM of
company apply various approaches and techniques. This can help in attracting, maintaining,
developing and rewarding employees in such a manner that high motivation can be created in
company which help in building a skilled and dedicated workforce. HR plays an important role
in maintaining the workers of company and establishing their relation with managers and
organisation so that they can help in achieving company goals efficiently. Following are the
approaches which are applied in ARM holdings plc so that employee knowledge can help in
bringing innovation in company: Motivation: Motivation is an important function of HRM which help in ensuring that the
employees are encouraged to use their complete potential, skills and talents in achieving
company goals. It also help in creating a healthy and friendlily workplace where
employees are motivated to come up with innovative ideas freely so that they can achieve
company goals efficiently. The HR of ARM holdings ensure that employees of company
are highly respected and involved in decision-making and follow a can-do approach
towards solving problems which help in motivating employees (Hernaus, Vuksic and
Štemberger, 2016). Employee engagement: It is the extent to which employees feel passionate about their
jobs, committed towards organisation and also put their efforts so that company goals are
efficiently achieved. This also means that extent to which employees are involved in
decision-making so that job satisfaction among employees can be increased along with

increasing their confidence as their ideas and opinions are valued in company. ARM
holdings ensure that high employee engagement exists in company so that high value and
contribution of employees can be achieved in company. Developing people: It is important that the employees of company are developed and
trained in such a manner that they all can develop same level of skills and talents which
help in achieving company objectives. ARM holdings hold one-to-one meetings, gives
reviews and feedbacks on employee performance etc. so that employees can be
continually developed and their performance can be improved which is important in
achieving their personal and professional development. Performance appraisal: It is related with paying employees based on their performance
so that a healthy competition can be created in company which help them in using the
best of their knowledge and potential in contributing towards company success. ARM
holdings motivate employees to perform better by rewarding well performing employees
so that they can increase their hard work (Ihuah, 2014). Teamwork: It is important that teamwork is encouraged in company so that knowledge
and information can be easily shared among members which help in bringing
collaboration and integration among team members thus creating a friendly working
environment. This helps in enhancing innovation in ARM holdings plc which help it in
gaining a competitive edge in market.
 Talent management: ARM takes 'self betterment' approach so that employees can
develop new skills and talents which can help them to improve their self esteem and use
their potential in achieving company goals. This also help in retaining employees in
company so that talent pool can be created in company and high competitive advantage
can be gained in market (Kirchberger and Pohl, 2016).
M2 Critically analyse different approaches to motivate human capital and knowledge
management
Various approaches and techniques can be applied by company so tat the employees of
company can be managed efficiently and also improve their motivation to use their skills in
achieving company goals. These approaches also help in using knowledge of employees
effectively and directing it towards achievement of company goals. ARM uses various

approaches so that it can retain, develop and manage the talented workforce of company so that a
competitive advantage can be gained in market.
TASK 3
P3 Research and knowledge for emerging HR developments
The organisations use many technologies so that human resources of company can be
developed which can help in gaining a competitive edge in market and utilise their complete
potential in achieving company goals. It also help in coordinating and collaborating the work of
employees in company so that diverse workforce can work efficiently work together and
company goals are achieved on time. These developments must be involved in company so that
employee performance and learning can be enhanced which will increase innovation in company
so that it can survive in market. In the contemporary era where employees are given high
importance in company following are certain HR developments which help in increasing their
work efficiency: Employee engagement: Employees are being highly involved in decision-making which
help the company in making efficient decisions as the ideas and views of employees are
also considered. This also help in motivating employees in giving their best efforts in
achieving company goals as their ideas and opinions are valued by managers. This boost
their confidence and their trust in company increase which also help in bringing
innovation in company and the productivity increase. Talent management: It is related with managing talent in company which help in
retaining, developing, rewarding, hiring and recruiting employees so that a pool of highly
talented and skilled employees can be maintained. This help the companies in building a
workforce which can be used in an efficient manner so that long-term goals of company
are achieved. It is important that talent management is aligned with company strategy so
that they can function in an efficient manner (North and Kumta, 2018). Technological innovation: It is important that the employees of company are adapted
with technological advancements so that new technology can be used in operations and
functions which can help in increasing their quality of work. Technology also help in
enhancing employee performance and the work can be completed in a cost and time
efficient manner which can help company in being highly competitive in market. With

the use of technology new ideas can also emerge which can be applied in company so as
to increase customer satisfaction and increase its sales in market. Use of feedback tool: The use of feedbacks is also a development in HR which help the
company in giving reviews about their performance so that the areas which lack in
efficiency can be improved. This help in improving the overall efficiency and
performance of employees and they can become better in their work which increases their
productivity (Rane, Sunnapwar and Rane, 2016).
 Extensive use of data analytics: It is the use of data of customers so that their changing
behaviour, likes and preferences can be monitored. This can help in determining the
changes which needs to be brought in company's products and services so that high
customer satisfaction can be achieved. ARM use the data of their customers so that
customers can be highly satisfied which results in high level of innovation in company.
This help in improving the level of performance of workers along with increase in
company profits in market.
M3 Evaluation of how HR developments affect role of HR function in future
With the developments in HR it is important that the functions of HR are also changed so
that employees of company can be efficiently managed and can be used in achieving company
goals. Employee engagement will affect HR function as democratic leadership style will be used
in company. Performance appraisals will mean that the HR will have to continually motivate
employees to perform better. This way the HR developments will affect HR functions in future.
TASK 4
P4 Evaluation of how organisational design respond and adapt to change management
Change management is a structured approach which is used in organisations when they
introduce change in their current working practices so that the people of company can be
prepared, supported and helped in adapting change in an efficient manner. Change is an
important concept which is applied in every organisation so that changing government policies,
competitive pressure, changing customer needs and wants etc. can be efficiently fulfilled.
Change also help in improving the organisational performance and adapting to changing business
environment so that company can survive in market and its sustainability increase which help in
increasing customer satisfaction. In ARM holdings changes are brought in company frequently

as the company develops software and with the increase in technological advancements the
software also have to be developed and changed. Following are the situations where company
implements change in company: Transformational change: This change is related to altering the current operational
structure of company where changes are brought in processes, people and technology
used in company. This change is implemented in the complete organisation over a period
of time which also lead to the alteration of organisational culture and its internal
processes. These changes help companies in altering the way in which they perform and
function in market and helps them in gaining a competitive advantage in market by
introducing goods and services which help in satisfying customer's dynamic needs and
wants. ARM holdings introduce this change when a new technology is to be applied in
company which can help in developing innovative software so that technological
advancement be used to satisfy customer demands (Scott, DeLone and Golden, 2016).
 Psychological change: It is related with changes which are to be brought in the current
working of employees so that their performance can be improved and they can become
more efficient in their work. It is important that the workers are encouraged so that they
can adapt change in their traditional working methods so that the effectiveness of
organisation in achieving its objectives can increase. The managers of ARM encourage
the company workers to accept changes positively by including them in decision-making
and also giving them training and development so that the change can be efficiently
implemented in company.
These are the changes which can be implemented in company so change in market
conditions do not have negative impact on the company operations and functions. These changes
help in increasing company productivity and adopting technological advancements in company
so that efficiency of company can be improved. It also help in enhancing the productivity and
performance of workers so tat company can become cost and time efficient and provide goods
and services which can help in increasing its sales (Sroufe, 2017).
M4 Evaluation of changes which can affect organisational design
There are various changes which are brought in company that impacts the organisational
design so that the relations of manager and workers can be managed which can help in achieving
company goals on time. Transformational and psychological changes both affect the relations of

members with company which affect the way in which company will achieve its goals. Thus it is
important that these changes are efficiently implemented which can help workers in adapting to
change so that objectives of change can be achieved.
RECOMMENDATIONS
From the above discussion it can be seen that employees of company play an important
role in its success and must be included in making decisions so that their value and contribution
in company can increase. Following are some recommendations which can be followed by ARM
to increase value and contribution of employees in company:
 Increase group activities ion company so that all employees can work together which
help in increasing new and innovative ideas.
 Training and development programmes must increase in company so that all the
employees can be equally trained and developed and can acquire skills.
 Frequent bonuses and rewards so as to boost the morale of workers which improve their
performance.
CONCLUSION
From this report it can be concluded that human resources play an important role in
adding value and contributing towards organisational success. It is thus important that the HR of
company use approaches which can help in improving their productivity and performance.
Organisational design also play an important role in improving employee performance so that
company goals are achieved. Change can be effectively implemented in company by involving
employees so that they can adapt top changes in company easily.

REFERENCES
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capital in agricultural co-operatives’ development Practical lessons from the CUMA
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