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