Challenges of Organizational Design

Challengesof Organizational Design

Challengesof Organizational Design

Whatinsight can you offer about the four main challenges facing designersof organizations?

Thefirst challenge that the organization designers face is selecting thelevels of vertical and horizontal differentiation to achieve the setorganizational targets. This process mainly involves managing thecreation and control of the process of the division of labor, in aprocess referred to as differentiation. This challenge dictates howthe creation of value by an organization stays controlled andcoordinated. The complexity of this challenge directly varies withthe complexity of the organization. Horizontal differentiationpromotes specialization while vertical differentiation facilitates ahierarchy of authority to manage the subunits. (Jones,Mills, Weatherbee&amp Mills, 2006)

Theother challenge encountered by designers of organizations isbalancing differentiation and integration. Horizontal differentiationbrings about subunits within the organization to facilitatespecialization. However, this division of organizational staff intosmaller groups can at times prove to be a challenge especially in bigorganizations. The more the company expands, the more communicationbarriers emerge between the different subunits. This situation makesintegration necessary. The organization may create this full-timeposition in a bid to cultivate and maintain communication betweendifferent divisions in the organization. (Joneset al., 2006) Thereare seven mechanisms of integration namely the hierarchy ofauthority, direct contact, liaison role, taskforces,teams,integrating roles and integrating departments.

Thethird challenge is creating a balance between Centralization andDecentralization. Each of these methods of organizational managementhas its own merits and demerits. A centralized organization gives itstop managers all the power to make all its decisions. In adecentralized organization, decisions are made by low-level managers,not the top managers. Centralization, while ensuring a high level ofstaff productivity, is seen to promote managerial dictatorship whichlowers employees’ motivation and morale. (Joneset al., 2006) Decentralizationon the other hands encourages creativity but gives top managementless control over their employees.

Thefourth challenge is balancing Standardization and Mutual Adjustment.Standardization calls for rules and procedures to be followedstrictly, while mutual adjustment allows employees the flexibility tosolve problems using their judgment. (Joneset al., 2006)A blend of the two is proper for any organization since the problemsthey may face vary in nature some can be solved by judgment andothers by following rules.

Ifthe objective is to create an effectively designed organization needthese four challenges be addressed at the same time? Howare these four challenges related to each other?

Intrying to create an effectively designed organization, all thesechallenges must not be addressed at the same time since, typically,all these challenges will not kick in at the same time. Most of themcome up as the organization grows and expands. In a church, forinstance, the founding pastor can do all the managerial duties in thebeginning. However, as the church grows, and the congregationdevelops, the first challenge of controlling and coordinatingcreation value will need to be addressed, leading to the division oflabor and hierarchy of authority by differentiation. Keeping thesubunits brought about by differentiation will require integration.Decentralization and centralization will the need to be balanced tokeep the growing church running smoothly. At this point the churchmay even have branches in other states. There will be need to balancestandardization and mutual adjustment so that the problems arisingcan be tackled depending on their nature, time and magnitude. Thefour problems cannot be addressed at the same time since they do notoccur together. One problem leads to the next one as the organizationgrows.

Ifa manager wished to design a mechanistic organization, what designchoice would he or she face? Would these choices differ if an organicstructure were the desired form? How might the ideas of contingencytheory be described?

Amechanistic structure aims at influencing people in an organizationto behave in a particular manner. A manager wishing to design such anorganization would have to use the hierarchy as the primary mechanismof integration, and then use standardization and rules to implementcontrol and coordination. If the desired form were an organicstructure, the manager would use task forces and tasks as theintegrating mechanisms to promote flexibility and decentralize thedecision-making process. (Joneset al., 2006) Thecontingency theory combines mechanistic and organic structures tocreate an organizational structure that can face the uncertainties inthe future of the organization.

Throughthis assignment, I have learned the four main challenges oforganization design, how they arise and the importance of addressingthem when they do. Organizational design can bring success or failureto any organization. An efficient organizational design ensures thethoughts, talents and skills of all individuals in an organizationare not well planned and controlled. Without this, there is a highlikelihood of the organization failing to achieve its set goals andtargets.


Gareth R.Jones. Albert J. Mills. Terrance G. Weatherbee. Jean Helms Mills2006.Organizationtheory, design, and change.Page112-129