Organisation Design

Having studied the basic parameters of an organisation, the next step is to design the organisation. An intelligent approach to design of a new organisation or re-engineering of an existing organisation, should preferably be based on at least seven independent variables or complexity parameters. 

The seven independent variables are listed by Peter and Waterman (1982) as follows : 

1. structure,  
2. strategy, 
3. systems,  
4. skills, 
5. style,  
6. staff, and 
7. shared values. 

These have already been discussed in previous sections. As pointed out, the productive and efficient organisation must continually respond to any sort of change in environment Tools of management cannot be a substitute for thinking and analysis cannot replace action. The emphasis in designing the organisation shall be on THINK and ACT. 

Excellent organisations will respond to complexity and uncertainty with flexibility. The flexibility of organisation can be looked upon as administrative version of experimentation.  Unfortunately, professionalism in management is equated with rationality. It seeks detached analytical justification for all decisions which attempts to be precise about the inherently unknowable. Analytical tools should be used only to assist and not substitute action. 

The rules and tools of analysis appear to minimise risk, but unfortunately they seem to minimise action also. To be narrowly rational is often to be negative. Just as bureaucracy emphasis too much for the obediences to rules, regulations and procedures; modem management tools, heavily stress on following the analytical tools. Both the systems appear to discourage experimentation and abhors mistakes. This anti-experimentation leads to over-complexity and rigidity. The excellent organisation is inherently a flexible one, it tolerates a reasonable number of mistakes. Advancement can take place only when new ideas are experimented and achieved. 

Along with bigness comes complexity unfortunately. The organisations respond to it in kind by designing the complex systems and structures. More staff is hired to keep track of all these complexities, compounding the mistake. It is in tune with the nature of people in an organisation, to keep the things as reasonably simple as possible, understandable for tens of hundreds of persons in organisations who must make things happen. 

During the past decade or two, there has been a so-called hidden revolution in the development of new organisational structures. It is increasingly realised that organisations must be dynamic in nature, capable of rapid restructuring according to changing environmental conditions like increasing competitiveness, market globalisation or technology upgradations. 

Wallace identifies four major factors that caused the onset of organisational revolution. 

• The technology revolution, 
• Competition and profit squeeze, 
• High marketing cost, and 
• Demand unpredictability. 

We can identify at least five general indicators that exhibit the need to restructure the traditional organisational form. These are as follows : 

• The technical skill is adequate but projects are unable to meet the time, cost or quality requirements. 
• There is high commitment to get the work done, but there is high fluctuation in meeting the performance specifications. 
• Expert specialists in the project feel exploited and misused. 
• Technical subgroups or individuals blame each other for failure to meet targets or quality specifications. 
• Projects keep the time and cost targets but groups and individuals are not satisfied with the achievements. 

The organisational system consists of the both human and non-human inputs. The human resources is represented by personnel, their individual and group behaviour while the technical non-human resource include technology, materials and machinery necessary to perform a task. There cannot be an ideal structure which can ensure effectiveness in all types of organisations and their functioning or even in a particular organisation in all its different stages of development. Organisational structures are dictated by such factors as technology and its rate of change, complexity, resource availability, product and/or service required, competitions, and decisiop'making requirements. There is nothing like a good or bad organisation, there are only propitiate or inappropriate ones.