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Organization design is considered a method to shape the method in which an organization is structured and run. This includes various features of life at work, like shift patterns, team formations, decision-making processes, lines of reporting, communication channels, etc.

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The Usefulness of Organization Design

Organization design can aid organizations in achieving their goals. At times, large-scale reorganizations become important. Again at other times, a few delicate shifts in systems and structures can ensure that organizations are thriving.


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A good organizational design helps in improving productivity and communication. Additionally, it ends up inspiring innovation too. An organization design forms a surrounding where people would be able to work effectively.

The majority of the performance and productivity issues can be the outcome of a poor organizational design and most often, it confuses within roles, shortage of coordination amongst functions, and most importantly, failure to allocate ideas. Hence, an organization can have a clear aim, excellent leaders, and talented people but if it can’t perform well then it must be due to a poor organizational design.

For being effective, the general organizational design should align well with the strategies of business and the environment of a market where businesses operate. This should possess the ideal business controls, the ideal incentives, the perfect flexibility, the appropriate people, and of course, the right resources.

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Benefits of Organizational Design

Organizational design tends to be step-by-step methodologies that recognize the dysfunctional features of workflow, systems and structures, and processes. It also realigns them for catering to the present business goals and realities before developing plans for implementing the novice changes. This process concentrates on augmenting both the people and technical side of businesses. For the majority of the organizations, the design procedure results in a highly effective organizational design, remarkable results, like customer service, profitability, and internal operations.

When you use organizational design, you can achieve the following:

  • Superior customer service
  • A culture comprising engaged and committed employees
  • Lessened operating costs
  • Augmented profitability
  • Escalated cycle time and efficiency
  • A clear policy to manage and expand your business

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The Principles of Organizational Design

  • Specialization principle – The specialization principles state that all boundaries must exist for encouraging the specialist skills development.
  • Co-ordination principle – According to this principle, every activity which is accomplished here must be coordinated right in only one unit.
  • Competence and knowledge principle – This principle does state that the liabilities must be allocated to a team or a person that is best fitted for accomplishing them.
  • Commitment and control principle – This principle is related to having effective control while maintaining commitment and engagement.

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