Do you have a well designed organization?
Do you have a well designed organization? (Goold, Campbell – 2002)
9 tests of organization design: framework to guide the evaluation of an existing organizational structure, or to create a new one.
The organizational design of most companies is the result of an haphazard evolution rather than a systematic, methodical planning: as a consequence, strategic initiatives fail because responsibilities are unclear, and opportunities are not exploited for lack of managerial attention. This framework is a structured approach for analyzing all the key variables of organizational success.
4 “FIT” tests: initial screen for design alternatives, to evaluate whether the structure support the intended strategy
5 “GOOD DESIGN” tests: tool to refine a design by addressing potential problem areas, and establish the right amount of hierarchy, control and process.
A] Getting the FIT right
1) The Market Advantage test (does your design direct sufficient attention to your sources of competitive advantage in each market?) Organizational structures should be shaped in order to enable and support the market strategy, but in reality often they end up being an obstacle.
Define target market segments
Determine if the design direct enough attention to each market segment.
The ideal situation is the one where you have a single unit dedicated to each segment/initiative. In reality, however, it is required also coordination across units, much more difficult to manage than collaboration within units. Therefore, the design should enable the unit managers to give enough attention to maintain the required cross-border links.
2) The Parenting Advantage test (does your design help the corporate parent add value to the organization?) Corporate HQ play different roles in different companies. This test helps to make sure the design is tailored to support these roles.
Define and list the corporate-level activities that provide real value to the overall company
Determine if
9 tests of organization design: framework to guide the evaluation of an existing organizational structure, or to create a new one.
The organizational design of most companies is the result of an haphazard evolution rather than a systematic, methodical planning: as a consequence, strategic initiatives fail because responsibilities are unclear, and opportunities are not exploited for lack of managerial attention. This framework is a structured approach for analyzing all the key variables of organizational success.
4 “FIT” tests: initial screen for design alternatives, to evaluate whether the structure support the intended strategy
5 “GOOD DESIGN” tests: tool to refine a design by addressing potential problem areas, and establish the right amount of hierarchy, control and process.
A] Getting the FIT right
1) The Market Advantage test (does your design direct sufficient attention to your sources of competitive advantage in each market?) Organizational structures should be shaped in order to enable and support the market strategy, but in reality often they end up being an obstacle.
Define target market segments
Determine if the design direct enough attention to each market segment.
The ideal situation is the one where you have a single unit dedicated to each segment/initiative. In reality, however, it is required also coordination across units, much more difficult to manage than collaboration within units. Therefore, the design should enable the unit managers to give enough attention to maintain the required cross-border links.
2) The Parenting Advantage test (does your design help the corporate parent add value to the organization?) Corporate HQ play different roles in different companies. This test helps to make sure the design is tailored to support these roles.
Define and list the corporate-level activities that provide real value to the overall company
Determine if