Organization design can be termed as the process of coordinating the structural elements of an organization in manners that seem most appropriate. The success of Organization designs is attributed by several key elements or organization structures that include: specialization of work, responsibility and authority, the chain of command, decentralization versus centralization, span of control, dividing, assigning, new technology developments, information processing, power and politics, growth, design cycles and departmentalization.
Nowadays, the environment has undergone a tremendous change and the existing organizations have been forced to continuously redesign as new more organizations are formed daily. To survive in such a competitive and high rising market, organizations that are well-suited and well-designed must incorporate effective organization design alternatives. The continuity of these organizations is based on their ability to meet the needs of external constituencies and play on their members’ skills. Organization design alternatives are designed to assess and diagnose the circumstances that confront the organizations and in the process help the managers to consider the most efficient strategies that can be applied in order to experience a positive growth. Of most important for the managers is to ensure that the proposed or the laid out strategies emerge to be closely connected to the structures of the organization. These strategies are: hierarchy coordination structures, creation of lateral relations and investment in information systems (Robert Youker, 1977).
Hierarchical structure is however the most established organizational structure in the world today. It takes the form of a standard pyramid with the top management at the top of the chart going down to the middle and finally the lower management at the bottom of the pyramid. The most common function units we find today include the technical, research, personnel, operations, finance and accounting. The strengths of a functional organization are the centralization of similar resources. Weaknesses that are likely to occur when multiple projects are carries out include the conflicts that generally arise over the relative priorities of the competing projects. Inertia and lack of motivation may be another problem. Factors that affect these structures include the products, technology, customers, geographical location and the discipline of the staff. The design of organization structure indicates three things, required work activities; each department in an organization mandated to perform a specific task on behalf of the company. Reporting relations; this is also the chain of command. This is an unbroken line of authority that joins all the people in an organization and indicates who reports to whom. Departmental groupings; this option enables every department to share its resources and have one supervisor who is responsible for the performance of organization.
Great scholars developed other models that have been used to compare the performance of coordination structures. The models have mostly focused on the three main performance measures which include production, coordination and vulnerability costs. Factors that can affect the three performance measures include the handling exceptions that occur due to the uncertain and dynamic environment. Time wasted by the management in making key decisions in an organization also affects the output of organization.
Several approaches used in organization design alternatives for organizational effectiveness include: systems resource approach which focuses on inputs and internal process approach which focuses on outputs, transformation and environment. Measures focused on short-run comprise of goal accomplishment, performance efficiency and satisfaction of the stakeholders. In medium-run, adaptability in the changing environment and development of systems and people in order to meet new challenges are the two main facts that are focused on. Survival under uncertain conditions is also one of the long-run focuses. Essentials of an organization design include the bureaucracy, contingency perspective, organic design, mechanical designs and environment (John Wiley, 2004).