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HOW TO JUDGE AN ORGANIZATIONAL DESIGN PROJECT


There are four major sets of desirable features called desiderata, for any organizational design project:

A. Desiderata about the process to be followed during the project
B. Desiderata for selecting one organizational design solution over another
C. Desiderata for effectiveness, and
D. Desiderata for what to do after the organizational design project has been "completed."

These desiderata follow the stages of the Organizational Audit and Analysis Technology (57, 59, 60, 61, 101, 102). However, we think that they apply to any organizational design project, regardless of the choice of approach to organizational design.

A. Desiderata for the Process to be Followed

There is no reason to engage in an organizational design process unless one intends to implement change. We have learned through experience that the processes for how this work is done are critical to the final acceptance of what is done. These five desiderata about the design process are vital to the later success of the project:


D1(Agreement on Process):

Reach agreement on the processes to be followed rather than the expected results. Usually the organizational design process opens up entirely new solutions that were not apparent at the beginning.

D2 (Completeness):

The analysis of the problem should be as complete as possible. This means investigating the organizations environments, its strategic direction, how it is organized, how it rewards its people, its many technologies and the results produced. Incomplete analysis creates unwanted surprises that harm implementation.

D3 (Cost Effective):

The organizational design process should be cost effective.

D4 (Objective):

The organizational design process should be objective.

D5 (Swift):

The organizational design process should be swift. Let TA denote the time taken for analysis (find, formulate, solve, and implement a solution) and let TC denote the time period before the problem changes. Then Desiderata D5 means TA < TC.


B. Desiderata for Selecting the Organizational Design

There are always multiple solutions to designing a more effective organization. Opinions differ on which of these solutions is preferred. Facilitating these discussions has led to a set of desiderata to help decide which proffered solution is preferred. In most cases alternative designs offer a mixture of advantages and disadvantages. We have found that desiderata for selecting the organizational design help executives pick their way through the minefields of varying opinions.

D6 (Parsimony):

Given any two alternative organizational designs, the one involving fewer position changes is preferred.

D7 (Simplicity):

Given any two alternative designs, the simpler one is preferred.

D8 (Specificity):

Given any two alternative designs, the one that is more specific about the details and assumptions is preferred.

D9 (Robustness):

Given any two organizational designs, the more robust is preferred. Robustness refers to the capabilities of the new organizational design to be quickly adapted to major changes.

D10 (Implementability):

Given any two alternative organizational designs, the one that is expected to be easier to implement is preferred.


C. Desiderata for Effectiveness

In addition to the five selection desiderata, executives also need to assess the suggested solution against criteria of effectiveness. The next seven desiderata round out the analysis of the options. These desiderata, however, are less certain than the preceding ten because the effectiveness can only be accurately evaluated after the solution of the new organizational design has been fully implemented. They are included here anyway because they raise important issues and their discussion tends to improve the solution.

D11 (Clear Fit):

Given two alternative organizational designs, the one with the clearer fit between the strategic and operational design is preferred. Organizational level congruency is vital (97).

D12 (Strategic Direction is Met):

Given two alternative organizational designs, the one that best meets the strategic direction is preferred.

D13 (Best Balance):

Given two alternative organizational designs, the one having the best balance of organizational needs with individual capabilities is preferred.

D14 (Economics of Scale):

Given two organizational designs, the one offering improved economies of scale is preferred.

D15 (Less Excess Interdependence):

Given two organizational designs, the one with the least excess interdependence is preferred. The recognition of the problem of interdependence has been key to the research here (59, 60, 71, 93, and especially 91).

D16 (Adaptable):

Given two organizational designs, the more adaptable is preferred. The more holonomic the organization the more adaptable it is (62, 63, 81, 100, 101, 102, 104).

D17 (Meets Customer Needs):

Given two organizational designs, the one that best meets the needs of customers is preferred.

D. Desiderata for the Follow-Up Process

Finally, there is some post organizational design housekeeping to be done. Organizations are on-going, evolving entities. Their needs change and there will always be need for follow-up services. We like the metaphor of the Roman architect who had to stand beneath the roof and dome as the supporting timbers were removed. A bad design resulted in swift accountability for the Roman architect. But after the new organizational design is implemented, there will always be more change. Consequently, the last three desiderata are important.

D18 (Manageability):

The organizational design should have processes for its maintenance and updating.

D19 (Leverage):

The organizational design should result in a solution which management can leverage for follow-up analyses (e.g., compensation systems, revising the chart of accounts to reflect the actual organization).

D20 (Reduce Dependency):

Reduce client dependency on the consultant.

The most important of these 20 desiderata are:

D1 Agreement on the process,

D10 Implementability, and

D18 Manageability.

The relative lack of ability of most of the major approaches to organizational design to meet these criteria is surprising. But it is true. The only one that does is our Organizational Audit and Analysis Technology. I think the reasons why others fail to measure up are (1) few academics have personally carried through an organizational design project from proposal to implementation, (2) most consultants are poorly educated, and (3) most practitioners do not have the necessary time, energy, and objectivity.

The technologies and methods involved in our processes in the six OA&A stages are designed to achieve these criteria. Each stage is designed to foster the achievement of the desiderata.

 

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