Organizational design principles and applications

Org Design

My most recent organization has a structure that is mechanistic in nature. This is, however, conducive with the organization's business and its goals. The organization's competitive advantage lies with efficiency and economies of scale. The ability to perform routine tasks is critical to the success of this organization. The mechanistic structure allows management to determine the optimal means of performance of these tasks, and then transfer that information to each employee. This structure relies heavily on management's abilities in work design, so that all jobs are done, and there are people in place to perform each task, even under unusual circumstances should they arise. The company's goals are of course market share and profit, but these are achieved through performing the routine tasks better than the competitors perform them.

The mechanistic structure relies on the abilities of management, and the training of the workforce to ensure that they can execute the tasks that they are expected to. The company also has a mechanistic structure in its training systems. All of this works effectively because these structures and systems have been refined over time, and because there is a high level of stability in the work. For over forty years, this work has not really changed all that much, something that has allowed the company to excel, and stay ahead of the competition through this centralized control of workflow, training and systems. I feel that there would actually be chaos introduced if employees were allowed the freedom to design their own workflow, and it may result in some tasks not being done.

If I were to redesign the system, I do not think that I would. That's the thing about working for an industry leader with a dominant market share -- the company is doing well so you have to respect that and not make changes for the sake of change. An organic organizational design is best suited to organizations that operate in fluid environments, and where empowerment of employees has a high amount of upside. In a company that makes its living performing routine tasks with a high level of efficiency, a more mechanistic structure simply makes more sense. This does not mean that the company is overly bureaucratic -- it's not -- it just means that decision-making tends to be centralized so that workflow can be more efficiently designed. The mechanistic approach is often mischaracterized as bureaucratic, in some Kafka-esque sense, but the reality is actually quite a bit different. Decision-making can be quite streamlined, it is just that relatively few employees will have genuine decision-making power.

Section 2.

Companies that perform routine tasks often benefit from a mechanistic structure, but there are times when industry changes demand that such companies introduce a more organic design in order to encourage innovation, flexibility or both to the organization. Harley Davidson, which used to have limited innovation and flexibility, was faced with such a situation, and wanted to introduce empowered work teams to its organizational structure in order to achieve these results.

Mechanistic organizations tend to attract people who prefer the sense of structure and direction that such organization provide, so introducing flexibility and empowerment is often met with resistance. Companies need to assess before undertaking such a program the capacity of the organization to accept and adapt to this type of change, so that they can guide the change process more effectively. The management team at Harley Davidson recognized that its employees were committed, but that there might be some resistance to change, especially where it was perceived to introduce greater levels of risk to the organization and to individual roles.

I believe that Harley did well in evaluating the company, but there is always room for improvement. For example, understanding a company's capacity for change is one thing, but steps need to be taken to improve this capacity. Ideally even a company that does not expect much change can be prepared to undertake change at any time if needed.

The article highlights the importance of preparation in doing organizational design change. Organizational design is important, and affects the way that people within the organization do things, and how they see their role within the company. As a consequence, it is easier said than done to implement change, just by changing the design. Such changes take time, there is often resistance, and it is important for senior management to be patient and overcome resistance.