5ODG Organisation Design

5ODG Organisation Design: Implications of HR

Dynamic business environments have placed unprecedented pressures on organisations. Keeping their operations afloat requires organisations to plan proactively and thoughtfully. Adapting to technology, business regulations, and price fluctuations are issues that organisations must continuously face to meet market demand. An organisation’s structure is aligned with its objectives through the process of organisational design. In other words, it ensures that a company’s system is aligned with the business’s goals within its environment. In the organisation design module, learners gain the frameworks, approaches, and practical skills necessary to address an organisation’s issues.

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In this module, learners will learn about the design of a business structure and become more familiar with the environment and change. In addition, learners will learn about planning for transitions into different systems and implementing and monitoring change. Students who complete this unit will acquire knowledge of business processes, workflows, duties, and responsibilities, how to analyse activities in a firm, and how to estimate volumes of work within a firm. Occasionally, organisational design is combined with organisation development. Organisational development focuses on corporate cultures and behaviour, while organisational design focuses on organisational structures and processes. An essential element is to acknowledge that design can play a part in the development of organisations. This unit explores different types of organisational structures, such as;

  • The geographical structure
  • Structure-based on product lines
  • The functional structure
  • The market-based structure
  • Matrix-like structure

Students will be exposed both to the old organisation design as well as to new approaches to it. As a result, modern corporate designs (modern corporate designs) are more empowering because they devolve decision-making down the organisational hierarchy. Organisational structures today are more flexible and, therefore, more agile in their operations. The car industry is a perfect example of how modern organisations are organised.

Unit Suitability

According to CIPD, a human resource expert must have a strong understanding of organisational design. The organisational structure requires practitioners to be familiar with external factors, objectives, or needs of an organisation and people’s behaviour within the organisation. The unit is recommended for those involved in organisational change, organisational leaders, and those who plan and support transformational change. HR practitioners or those who want to pursue a career in human resources should also enrol in the module.

Choice of Organisational design

Three main factors influence an organisation’s design, which students will learn in this module. The unit will first identify business objectives and then explain how organisational structures relate to business objectives. For a business strategy to succeed, it is essential to align its purpose and structure. According to the PESTLE analysis, external environmental factors affect the organisation’s design and goals and must be considered. The second factor that influences the organisational design is organisational culture. Whenever an organisational design is used as a tool for organisational development, culture must always be considered. This unit will use Handy’s cultural typology5 to illustrate the relationship between corporate design and culture. The framework provides clear guidelines for the parallels between design and culture. Organisational cultures can be divided into five types:

  1. The role culture is correlated with the functional structure where senior managers (product line managers) coordinate the operations of independently run units to achieve the organisation’s objectives.
  2. Students will also learn about power cultures, where one individual or a small group dominates.
  3. Additionally, the unit will assess the task culture, a matrix organisation known for relying on connections to resolve issues.
  4. Similarly, task cultures are associated with matrix organisations, which rely on connections to accomplish tasks.
  5. Organisations often use a person’s culture to confer authority on a person or persons. Usually, these organisations deal with consultancies, such as architects or specialists. In addition, these organisations are often structured in a way that supports individual interests.

There are benefits and disadvantages to all the different organisational cultures. The learners will be explained this. The unit will focus on transitioning from one culture to another using organisational design in a particular organisation. The students will learn that different organisational cultures can exist within one organisation. Therefore, selecting the right organisational design is crucial in such situations. In this unit, learners will be provided with cases that will enable them to associate with and comprehend the theoretical framework. This module introduces the students to the process of designing local and national corporations and the steps involved in designing international corporations. As students design global corporations, they will understand that culture is typically the greatest barrier. Therefore, Hofstede’s framework will be taught to address cultural differences across nations. The framework covers the following cultures:

  • Competing versus caring culture
  • A risk-taking culture or a risk-avoidance culture
  • Culture of individualism or collectivism
  • Long-term versus short-term investments
  • Culture of power distance.

The third factor influencing the choice of an organisation’s design is people processes and systems. This unit explores how changing technology influences labour and, therefore, an organisation’s operations. The Internet and social media are essential tools for recruiting and managing employees. There are a variety of remote working techniques that require different organisational designs to be successful. For organisations that may need to switch between structures, this module is essential. Many companies find it necessary to switch from a functional structure to a network approach depending on their organisational needs.

Wrap Up

Human resource professionals are primarily involved in organisational design, which is vital to influencing people processes. Business strategy and organisational design must be in alignment for the HR manager to be effective. An essential tool for shaping organisational culture is organisation design. Students will be able to define organisation design, describe types of organisation design, and know the importance of different companies by the end of the unit. A positive corporate culture is essential for achieving business objectives and for the improvement of work quality. According to research conducted by CIPD, organisational design is fundamental to SMEs. Due to their growth and expansion, SMEs often have to review their structures. Many start-ups begin with a structure where everyone works toward the founders’ goals, but as the company grows, a hierarchy emerges.

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