Running head: KEY CONCEPTS OF ORGANIZATIONAL DESIGN
Key Concepts of Organizational Design
Creativity, Innovation, and Organizational Design
Key Concepts of Organizational Design An important part of organizational theory is organizational design. It is important to change management within the organization and shapes the organization’s culture, leading toward the achievement of reaching its goals. Organizational design becomes more complex as the company experiences growth. In this paper, I will provide some key concepts of organizational design and its importance, assessing the relationships between strategy, structure, and process in organizations and the relationship between organization design and decision-making
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Control problems are usually due to organizational growth. “As the organization’s skills and abilities increase and the organization is able to produce a better or wider variety of goods or services, the organization’s ability to service the needs of its growing product line is strained.” As more organizational functions develop through hierarchy, they separate from one another. These separate groups in a functional structure cause communication problems. Measurement problems arise when the organization does not have the capability to exercise control over something and evaluate itself. Because the functional structure groups individuals together by expertise and experience, location problems become a factor when the organization expands to other locations. Customer problems may become an issue in a functional structure when trying to service their needs including tailoring products to suit customers may be difficult. Top managers are the ones who create strategic problems, spending “so much time trying to find solutions to everyday coordination problems that they have no time to address the longer term strategic problems facing the company,” (Jones, 2004, p. 164). These managers are spending too much of their time trying to solve day-to-day problems.
Multidivisional Structure The multidivisional structure is the one most often used by large organizations out of the three types of product structure. When a company enters new industries, it gives