Contemporary organization design
The current proliferation of design theories and alternative forms of organization gives practicing managers a dizzying array of choices. The task of the manager or organization designer is to examine the firm and its situation and to design a form of organization that meets its needs. A partial list of contemporary alternatives includes such approaches as downsizing, rightsizing, reengineering the organization, team-based organizations and the virtual organization.
These approaches often make use of total quality management, employee empowerment, involvement and participation, reduction in force, process innovation, and networks of alliances. Practicing managers must deal with the new technology, the temptation to treat such new approaches as fads, and their own organizational situation before making any major organizational design shifts.
Reengineering the organization
Reengineering is the radical redesign of organizational processes to achieve major gains in cost, time and provision of services. It forces the organization to start from scratch to redesign itself around its most important processes rather than beginning with its current form and making incremental changes. It assumes that if a company had no existing structure, departments, jobs, rules, or established ways of doing things, reengineering would design the organization as it should be for future success. The process starts with determining what customers actually want from the organization and then developing a strategy to provide it.
Once the strategy is in place, strong leadership from top management can create a core team of people to design an organizational system to achieve the strategy. Reengineering is the process of designing the organization that does not necessarily result in any particular organizational form, it the process of adopting the changing behavior of the industry and business environment.
Rethinking the organization
Also currently popular is the concept of rethinking the organization. Rethinking the organization is also a process of restructuring that throws out traditional assumptions that companies should be structured with boxes and horizontal and vertical lines. Robert Tomasko makes some suggestions for new organizational forms for the future. He suggests that the traditional pyramid shape of organizations may be inappropriate for current business practices. Traditional structures, he contends, may have too many levels of management arranged in a hierarchy to be efficient and to respond to dynamic changes in the environment.
Rethinking organizations might entail thinking of the organization structure as a dome rather than a pyramid, the dome being top management, which acts as an umbrella, covering and protecting those underneath but also leaving them alone to do their work. Internal units underneath the dome would have the flexibility to interact with each other and with environmental forces. Firms like Microsoft Corporation have some of the characteristics of this dome approach to organization design.