The “New” Organization
What is driving the changes in strategic design/structure of
today’s organization?
What are the dimensions of change?
Where are we in the “transition” process?
Who’s winning? Losing?
Key Challenges for the 21st Century …
Rapid Technological change
Hyper competition
Altered work relations
New business models
Evo S. Hariandja, Industrial Engineering Department, Bina Nusantara University, 2004
D0074-Perancangan dan Pengendalian Organisasi (Organization Design & Control)
Changing forms …THE 1990’S
Organization
Job design
Job assignment
Structure of job
Process of work
Training
Supervision
Decision making
Scheduling
Quality Control
Career Paths
Promotions
Pay
Hours
Commitment
Participation
LaborForce
etc.
Old/Traditional
Tall hierarchy
Narrow
Single job
Individual task
Rules, standards
Job specific
First-line manager
Top-down
Done by manager
Specialized function
Upward, linear
By seniority
By grade
Fixed
Time
Low
Homogeneous
etc.
New/Transformed
Flat hierarchy
Broad
Job rotation
Teamwork
Ongoing learning
Broad skills
Team facilitator
Shared
Done by team
Team function
Lateral, flexible
By skills & org needs
By results
Flexible
Initiative
High
Diverse
etc.
Contrasting Organizational Forms
Old Model
New Model
Bounded
Networked
Hierarchical
Flat
Fixed (rules and procedures)
Flexible
Homogenous
Diverse
Home-Based
Global
Contrasting Views Of The Corporation
Characteristics
20th Century
21st Century
Organization
Focus
Style
Source of Strength
Structure
Resources
Operations
Products
Reach
Financials
Inventories
Strategy
Leadership
Workers
Job Expectations
Motivation
Improvements
Quality
The Pyramid
Internal
Structured
Stability
Self-sufficiency
Atoms-physical assets
Vertical integration
Mass production
Domestic
Quarterly
Months
Top-down
Dogmatic
Employees
Security
To compete
Incremental
Affordable best
The Web or Networks
External
Flexible
Change
Interdependencies
Bits-information
Virtual integration
Mass customization
Global
Real-time
Hours
Bottom-up
Inspirational
Employees and free agents
Personal growth
To build
Revolutionary
No compromise
Framework For Taking Action In The New
Organization
Requisites for Taking Effective Action
Organizational
Characteristics
Individual Skills
Organizational
Features
Managing the
Environment
Networked
Teamwork
Building team
structures
Developing
alliances
Flat
Negotiation
Developing
incentive system
Boundary
management
Flexible
Multitasking
Workforce
management
Learning
Diverse
Listening/empathy
Conflict resolution Stakeholder
systems
relationship
building
Global
Cross-cultural
communication
Cross-border
integration
Local
responsiveness
Adapted from Managing for the Future by Deborah Ancona et al, MIT-Sloan School, 2005
Framework for Organization Design*
Specialization
principle
Product-market
strategies
Co-ordination
principle
Corporate strategy
People
Organization
Design
Knowledge &
competence
principle
Control & commitment
principle
Constraints
Innovation & adaptation
principle
Fit drivers
Good design principles
*Adapted from Designing Effective Organization by Michael Goold & Andrew Campbell, John Wiley-2002
Nine Tests for Organization Design*
Market advantage test
Specialist cultures
test
Difficult links test
Parenting advantage
test
People test
Organization
Design
Redundant hierarchy test
Accountability test
Feasibility test
Flexibility test
Fit tests
Good design tests
*Adapted from Designing Effective Organization by Michael Goold & Andrew Campbell, John Wiley-2002
A Taxonomy of Unit Roles*
Type of unit
Parent
Type of
responsibility
Obligatory and
added value
parenting
Relationships
Reporting
Lateral
Main
accountabilities
Board/parent
Mutual
self-interest
Corporate
bottom line
Core resource Resourceunit
focused
Hands-on
parent/unit
Resource
owner/user
Resource
development
and utilization
Shared
service
unit
Service-focused
Parent/unit
Service
provider/
client
Service costeffectiveness
Project unit
Project-focused
Parent/unit
Pressure
group/
principal
Project delivery
*Adapted from Designing Effective Organization by Michael Goold & Andrew Campbell, John Wiley-2002
A Taxonomy of Unit Roles*
Type of unit
Type of
responsibility
Relationships
Reporting
Lateral
Main
accountabilities
Overlay unit
Market-focused
(cut-across)
Parent/unit
Pressure
group/
Principal
Effectiveness in
serving target
segments
Business unit
Market-focused
Parent/unit
Mutual
self-interest
Bottom line
(strong)
Sub-business
Market-focused
(disaggregated)
General
manager/unit
Quasi-team
Bottom line
Business
function
Functional
General
manager/
function
Team
Functional
effectiveness
and contribution
*Adapted from Designing Effective Organization by Michael Goold & Andrew Campbell, John Wiley-2002
A New Display Bringing out Different Roles*
Parent
Overlay unit
Core Resource unit
Business
unit
Shared service unit
Sub-business
Project unit
Business
function
*Adapted from Designing Effective Organization by Michael Goold & Andrew Campbell, John Wiley-2002
Making Design Decisions*
Define
design
criteria
Proposed
Take
current
design
New design
Create design
concepts and select
some for testing
Clarify, test, and
refine the option
Finalize the chosen design
*Adapted from Designing Effective Organization by Michael Goold & Andrew Campbell, John Wiley-2002