Essential Ideas in Organization Design
The design organizations depend on factors such as; the size of the company, diversity of the organization operations, and the organization environment. The external environment is a crucial aspect of organizational design. The environment in which the organization operates can be explained from different angles, each generating a variety of structural and strategic designs to enable the organization to remain more competitive.
Complexity
According to the complexity theory, organizations should be adaptable to uncertainty in the environments. This theory views organizations as collections of strategies and structures which interact together to ensure efficiency in their environments (Burton, Obel, and Håkonsson, 2015). Organizations in high-risk environments should prioritize on being adaptable instead of prioritizing on more rigid and functional strategies.
Resource dependence
Another essential idea on organizational design is resource design theory, which is a study on how the external resources affect the behavior of the organization. The procurement of external resources is crucial for both strategic and tactical management of the company (Russo and Harrison, 2005). This theory explores the effects regarding the optimal divisional structure of organizations, recruitment of the board members, and employee production strategies, among others.
Competition
In circumstances of highly competitive environments, companies need to have different structures to damage the competitor’s advantages while emphasizing the company’s strengths. A company that employs low-cost strengths, producing cheap products than competitors will benefit from the use of basic strategies to streamline operations.
Identifying external factors.
Another fundamental idea in organizational design is identifying the external factors. Managers must use two specific frameworks to identify to examine the external factors and internal strengths and weaknesses (Russo and Harrison, 2005). One of the frameworks is a SWOT analysis, which identifies a company’s strengths and weaknesses in terms of threats and opportunities in the business environment.
Organizations need to employ the above essential factor to ensure productivity. Organizations need to consider the complexity, competition, resource dependence, and identification of external factors in designing a company. When these ideas are put in use, the company achieves competitive advantage, among other benefits associated with proper organization designs.