Organizational Change

ORGANIZATIONAL CHANGE

Article 1: DO YOU HAVE A WELL-DESIGNED ORGANIZATION, by Michael Goold and Andrew Campbell

Through the first article, the authors deal with the most politically controversial challenge of executives, the creation of a new organization design.

This study aims to provide a practical guide for executives to make its businesses successful. With the support of 9 organization structure tests, the authors provide a company’s management approach for analyzing all the key variable of organizational efficiency.

The first one is about market advantage. During the formulation of strategy, the company has to focus on two essential issues: in which market compete and how obtain advantage over rivals? For that the organization has to determine, firstly, its target market segments in order to establish for each segment a strategic business field responsible for it. It’s not sufficient to evaluate the company’s business as a whole, the segmentation of the entire business allows the development of promising strategies for the different Business units.

Regarding the parenting advantage, it aims to provide an organization’s structure that effectively supports parenting propositions. The parents can add value to the organization by helping to expand activity, to reduce costs, improve quality and profit, or by supporting the coordination and the links between units..

Another test, concerns the players of the organization. It’s fundamental to know that if a company doesn’t’ work right; it’s not due to the actors of the organization but often to the inadequate attribution of their roles. In fact, the success of an organization depends on the allocation of responsibilities to employees using their skills and motivation.

The feasibility test measures if the company has considered all its constraints that may prejudice the organization evolution. Several kinds of constraints have to be taken into account: such as government regulations or the interest of stakeholders.

Then, there is another pack of tests, the Good Design tests, that help a company refine a prospective design by addressing potential problems areas.

First of all, the Special Culture test helps to give to special units, who need to think and work in different way than prevailing organization norms, a protective structure to avoid a “contamination” by the dominant culture. Give the units the standing necessary to resist external influences and use appropriate communication to educate the rest of the company is a good method to achieve that.

Some of units, small (a line manager and a finance executive) or large and complexes may have many corporate parents. The Redundant-hierarchy test is used to avoid redundancy which inevitably lead to costs and drawbacks from each extra layer of management. It helps to cut out layer of management and shrink corporate and divisional functions.

Links between units are best handled through self-managed networking among units. “Difficult links” may happen when managers do not perceive the benefits of collaborating, have no incentives to work together o lack of skills and resources to make the necessary cooperation happen. The difficult-links test helps you to finds specially designed solutions for conflict like specifying who has ultimate authority.

The purpose of the Accountability test is to ensure that every unit has appropriate controls over its performance. You need to look at any units with shared responsibilities and any units whose performance is difficult to measure to develop clearer performance measures and provide greater clarity for overlapping responsibilities

Finally, the Flexibility test provides ways for a company to pursue innovation and

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