Organisational architecture, or organisational design, refers to the intentional association of organisational elements that invite meaningful collaboration toward shared goals. Organisations are systems within systems ¹. The organisation is a system that exists to translate strategy into performance outcomes ².

Goals of Organisational Design

Organisational design is ultimately concerned with an organisation's effectiveness and efficiency. An effective organisation succeeds in translating strategy into performance outcomes. Another essential function of any system is to ensure its own survival over time. An efficient organisation is sustainable over the long run if it creates more social value than it destroys³. Successful organisational design leads to emerging behaviours that ensure efficiency and effectiveness. Key things of organisational design

A system has three components: its functions, elements, and interconnections⁴. In organisations, these components manifest as people, roles, positions, objectives, activities, and competencies ².

A system has a function or purpose

An organisation's primary function is to be both effective and efficient, meaning it must sustainably translate its strategy into performance outcomes.

Since organisations consist of systems within systems, maintaining harmony among various functions and sub-functions is a key challenge in organisational design. For instance, the marketing and finance departments can be considered two sub-systems. Each sub-system has its sub-function, and the behaviours that emerge from these sub-systems may not always align with the organisation's overall purposes.

A system has elements

People are the key element because organisations are fundamentally systems of people. This includes the store of people and the store of competencies inherent in these people. The competencies translate to behaviours when deployed in a role⁵.

Technology and capital are other elements in store within an organisation.

A system has a structure

The placement of individuals within a hierarchical framework determines the structure of an organisation. These hierarchies define how information flows and assign power to participants in this information flow. Similarly, additional information flows with assigned power are created in how roles are established within organisations. Some information flows are formally established through hierarchy and defined roles, while others arise informally from the organisation's culture.

Processes reflect other information flows in organisations. These flows reflect the movement of information forward towards the decision points or action points that result in performance outcomes.

Feedback processes reflect the backwards information flows in organisations. These flows reflect the financial and non-financial signals that incentivise behaviour.

Role of management in organisations

The role of managers in organisations from an organisational design perspective is to be stewards of the system and its three core components: managers need to design effective and efficient organisations. Managers need to support the organisation as it moves from one operating model to another and ensure that each element that constitutes the system behaves in line with its purpose. Specifically, managers need to ensure that the forward information flows operate in service of the organisation's strategy and that the backward information flows incentivise desired behaviours.

Notes

• See Wikikipedia on Wikipedia.

References

Related tags

social designorganisational design