organizational design and structure

Changing trends in Organizational Design & Structure

An organization is a pattern of relationships- many interwoven, simultaneous relationships- through which people, under the direction of managers, pursue their common goals. These goals are the products of the decision-making process and planning. The goals that managers develop through planning are typically ambitious, far-reaching, and open-ended. Managers want to ensure that their organizations can endure for a long time. Members of an organization need a stable, understandable framework within which they can work together toward organizational goals. The managerial process of organizing involves making decisions about creating this kind of framework so that organizations can last from the present well into the future.

Managers must take into account two kinds of factors when they organize. First, they must outline their goals for the organization, their strategic plans for pursuing those goals for the organization, and the capabilities at their organizations for carrying out those strategic plans.

Simultaneously, managers must consider what is going on now, and what is likely to happen in future, in the organization environment. At the intersection of these two sets of factors - plans and environment - managers make decisions that match goals, strategic plans, and capabilities with environmental factors. This crucial first step in organizing, which logically follows from planning, is the process of organizational design. The specific pattern of relationships that managers create in this process is called the organizational structure. Organization structure is a framework that managers devise for dividing and coordination the activities of members of an organization. Because strategies and environmental circumstances differ from one organizational to the next, there are a variety of possible organizational structures.

And with passage of time, these designs and structures have undergone such tremendous changes that they appear completely on a different realm. So much that at times they are barely visible 

Half-life, Counter-Strike, Portal are words that any person of younger generation can connect to. But behind the success story of these video game series lies a unique structure of their parent company- Valve. In addition to offering company massage rooms and free food, Valve has a unique corporate structure rarely seen at such a large company: Valve has 300 employees but no managers or bosses at all. When they started Valve [in 1996], they thought about what the company needed to be good at. They realized that, their job was to create things that hadn’t existed before. Managers are good at institutionalizing procedures, but in their line of work that’s not always good. Sometimes the skills in one generation of product are irrelevant to the skills in another generation. Their industry is in such technological, design, and artistic flux that they needed somebody who could recognize that.

Even this example shows how members of an organization need a stable, understandable framework within which they can work together toward organizational goals, irrespective of whether they have well defined managers or not. Organizational design is the process of deciding on the appropriate way to divide and to coordinate organizational activity in view of the goals and strategic plan of an organization and the environmental circumstances in which that plan is carried out