Organization Design (HR) A29169 - Analysis of Business Impact

This report delves into the multifaceted impact of organizational design on business performance. It begins by defining organizational design as the integration of people, information, and technology to achieve organizational goals, emphasizing the importance of a strategic approach rooted in a clear vision. The report then explores the positive effects of effective organizational design on communication, productivity, and innovation, providing indicators of success such as improved product development cycles and enhanced resource utilization. The analysis further examines how organizational design enables businesses to adapt to change, manage contingencies, and gain a competitive advantage through strategic alignment and workforce enhancement. The report highlights the importance of aligning leadership, culture, and employee engagement, concluding with a call for a holistic approach that prioritizes employee understanding and engagement within the chosen design structure. The report uses examples such as a global pharmaceutical company to illustrate the benefits of organizational design. The report also emphasizes the role of HR as a strategic partner and enabler of business objectives. Finally, the report underscores the importance of improving culture and engagement within the workplace.

Running head: ORGANIZATION DESIGN (HR) A29169 1
Organization Design (HR) A29169
Name
Institution

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INTRODUCTION
Organizational design can be described as the formal guided process which integrates people,
information, and technology in any given organization. It aims at achieving the purpose of the
organization and through this process; the organization can act to improve the likelihood that the
collective efforts of the stakeholders will be a success. Managers in collaboration with the staff
define need and then formulate systems to meet these specific needs. The organizational design
process starts with the formulation of a strategy which is set of decision guidelines by which
stakeholders choose the appropriate actions (Anand & Daft 2007). The strategy originates from a
clear, concise statement of purpose, and vision and the basic philosophy of the organization.
After the creation of strategy, the organization begins in which people are connected in a
meaningful and purposeful ways. The human resource is the connected with information and
technology appropriate for success. Successful organizational design should be approached
holistically, and all components that determine its effectiveness include people, formal
structures, and organizing processes (Stanford 2007).
Impacts of Organizational Design
A successful organizational design impacts positively various aspects of the organization such as
communication, productivity, and innovation in addition to creating an environment where
people can work effectively. There are various indicators that show the success of organizational
design (Beakey & Rubin 2009). The following are a few indicators that may be realized after the
implementation of organizational design.
 The time cycle for the development of high-quality products and services increase
 The resources of the organization move more quickly.

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 The business will adapt quickly to changes in market conditions and create a good
relationship between employees and suppliers.
 Work is more efficiently done.
 The right information is being directed to the right people.
 How organizational design impacts and organization (McGee & Molloy 2014).
Improvement in the organization's response to change
Change is inevitable, especially in the today's business world. Organizations must change of
perishing. Changed is described to be the only thing that is permanent. A successful
organizational design helps an organization in remaining competitive by enabling it to be
responsive to change in its environments such as competition, technology, global economy and
consumer needs. The organizational design also helps the organization deal with evolutionary
development and proactive initiatives (Cordindale 2011). Organizational design points out that
people in the organization drive the process. It, therefore, clarifies the roles of each stakeholder
in the organization. It creates partnerships that which helps create partnerships, and this means
that expertise can be freely shared. The organizational design also improves communication in
an organization since the more the people become involved, the more the effectiveness of the
processes. This design helps in identifying those who work best which consequently leads to
high performance (Beakey & Rubin 2009).
Organization design helps in matching the individual capabilities of the management and the
employees to their role requirements. It is known that roles need to be staffed by the right people
with the right skills. It helps in a success of the organization since the company ensures that they
strike a balance of various capabilities and recognize that their needs for specific roles will

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change over time. This design ensures that as there is a change in roles needs the qualification of
the people who occupy those roles in reassessed.
The organizational design has help organizations gain the ability to change in two ways which
enhance sustained competitive advantage. It has helped companies have a disciplined approach
to strategy, culture, structure and direction. It has also enhanced the ability to adapt to the
dynamic development of the markets. Despite failures when it comes to change various firms a
success. The leadership is aligned with the objectives and the means of change. There aligned is
consequently gradually transferred to the employees (Beakey & Rubin 2009). An example is a
global pharmaceutical company which has used a change cascade in generating a lot of revenue.
Helps the organization deal with contingencies
A mechanistic management system is usually efficient for those organizations that operate in a
stable environment with unchanging technology and a certain market. An organizational design
helps the organization adapt to the dynamism in technology and fluctuations in the market. It
helps the managers to better attain higher performance through adoption of a more effective
structure. Also, managers can identify misfits between structures and contingencies. The
management solves the various aspects of the organization such as finance and marketing, and
this means that the firm can gain the competitive advantage over competing organizations
(Hoyes 2014).
It helps in improving the competitive advantage
In this fast moving and dynamic world, organizations are seeking ways to gain and sustain their
effectiveness and competitive advantage. Despite the fact that no single element can make an
organization successful, there are various success factors. One of these includes the

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organizational design which ensures that there is the alignment of various dynamics on the main
purpose, culture, and strategy. Organizational designs help in enhancement of competitive
advantage by ensuring that value creating strategies are implemented. This design ensures that
the strategies implemented are unique and that the competitors cannot duplicate the benefits of
the strategy (Cordindale 2011). To ensure the competitive advantage, a successful organization
design ensures the organization has the following attributes:
 It is valuable in that it exploits its opportunities and can deal with threats in the
organization's environment.
 The organization has a competitive advantage is rare among other firms and its
competitors.
 It must have resources that do not have strategically equivalent substitutes.
Organizational design helps the organizations seek new approaches to compete through a
competitive supply chain strategy. This means that the company can develop a centrally led
supply chain that is not fragmented and aligned with the firm's corporate strategic initiatives. It is
also possible to develop and modify supply chains which meet the organization's business needs.
Cross-functional teams are built across the boundaries of the organization to help in the
management of supply chains to achieve strategic goals and help provide exceptional value. It is
possible for the organization to integrate various essential suppliers to improve their supplier
skills, knowledge and capabilities for the organization benefit (McGee & Molloy 2014).
It enhances the organization's workforce
While many firms are good in recruiting, training, or managing performance, organizational
design helps in effective translation of the organization business strategy into a compelling

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people strategy. In this case, the Human resource manager is the major advisor to the various
business units on the operations and strategic people issues. The HR department has the short
and long term strategy of identification, attraction, development and retention of the right people
with the best capabilities.
Organizational design helps improve the employer brand which is a major asset. Since the
employer brand is high, employees and recruits know the range of benefits that the organization
provides. The benefits include compensation, career advancement, job rotation autonomy,
flexibility, and prestige. The presence of the employee value proposition results to the
improvement of the organization's strengths and competitive edge (Hoyes 2014).
The organizational design has helped the organizations become high performing due to the
investment in employee development through training and rotating people on roles and
responsibilities. This is usually a powerful motivational and retention tool that can reduce
compensation and financial incentives used. Collaboration is encouraged, and parochial
leadership behavior is reduced, and it ensures as the employees develop in their ranks, they have
a broad view of the firm.
Also, the vital roles and talents are clearly identified and treated with care. Talent management
can be described as an activity realized in practice and not only for fast track. Successful
organizational design treats the HR as a strategic partner of the organization and enabler of
business. Proper HR functions usually translate the business strategy into people goals and
enable business priorities through various incentives. The strategic HR has been given added
capabilities and therefore provides the line managers with advice and analytics. An example is
the GOOGLE, S RULE OF THREE-THIRDS in which Google's HR has established credibility

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by outlining a clear understanding of the strategic, functional and analytical needs. The HR has
ensured that the departments are staffed well.
Improving Culture and Engagement
Culture can be described as the ways things get done and an organization and shows how
employees behave and their collective attitudes towards their work and can be cultivated.
Employee engagement can be labeled as the willingness of employees to go an extra mile for
their company and don't be reliant on pay. The engagement can be measured and cultivated to
generate effort from employees (Stanford 2007). Motivation can be motivated using personal
motivators such as recognition and performance disciplines such as performance management
motivators. For example, a newly appointed CEO of a global transport company encountered
major challenges on employee engagement. The organization has issues with labor disputes with
its engineers, but other groups of employees were not affected. The CEO initially tried to unite
his top leaders and then moved on to middle managers. The CEO through organizational design
strategy helped in the clarification of the organization objectives. He did this by reducing the
number of layers and improving the span of control (Anand & Daft 2007).
Conclusion
The organizational design has been essential in improving various aspects of the business. The
design selected need different ways of working. It has been noticed that many organizations
usually pay attention to communicating a new design instead of helping the employees
understand to efficiently work within the design structure. There should plan to helps employees
in reconfiguring the systems, processes, data, roles and governance to fully fit in the

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organizational design. It has been noticed that the challenge of HR professions is the
expectations to drive business results through culture and people.

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References
Anand, N., & Daft, R. L. (2007). What is the right organization design? Organizational
Dynamics, 36(4), 329-344.
Stanford, N. (2007). Guide to organization design: Creating high-performing and adaptable
enterprises. London, England: Profile Books.
McGee, E. & Molloy, K. (2014). Getting Results through Organization Design. Retrieved on
November 9, 2016 from http://www.grovewell.com/wp-content/uploads/pub-org-design.pdf
Beakey, D. & Rubin, J. (2009). Organizational Design and Implementation. Retrieved on
November 9, 2016 from https://gbr.pepperdine.edu/2010/08/organizational-design-and-
implementation/
Cordindale, G. (2011). The importance of organization design and structure. Retrieved on
November 9, 2016 from https://hbr.org/2011/02/the-importance-of-organization
Hoyes, M. (2014). The Role of organization design in 21st century organization. Retrieved on
November 9, 2016 from http://www.regent.edu/acad/global/publications/lao/issue_25/4hoyes.pdf