Organization Design

What Is Organization Design?

Organization design is concerned with people aggregated into departments and organizations and with the differences in structure and behavior at the organization level of analysis.

Organization design might be considered the sociology of organizations, while organizational behaviorOpens in new window is the psychology of organizations.

• Organization design gives us the tools to evaluate and understand how and why some organizations grow and succeed while others do not.
• It helps us explain what happened in the past, as well as what might happen in the future, so that we can manage organizations more effectively.

Organization design is directly relevant to top- and middle- management concerns and partly relevant to lower management.

• Top managers are responsible for the entire organization and must set goals, develop strategy, interpret the external environment, and decide organization structure and design.
• Middle management is concerned with major departments, such as marketing or research, and must decide how the department relates to the rest of the organization.
• Middle managers must design their departments to fit work-unit technology and deal with issues of power and politics, intergroup conflict, and information and control systems, each of which is part of organization theory and design.

Organization design is only partly concerned with lower management because this level of supervision is concerned with employees who operate machines, create services, or sell goods.

In the next volume, we will examine the structural dimensions and contingency factors of organization design.