The difference between organization structure and organizational design can be confusing. Think of structure as
the organization’s basis, the fundamental framework and shape of the organization usually represented in the
organization chart. Organization design relates to the various elements that make up structure. An effective
organization structure and design is one that optimizes the performance of the organization and its members by
ensuring that tasks, work activities and people are organized in such a way that goals are achieved. An efficient
organization structure and design is one that uses the most appropriate type and amount of resources (e.g., money,
materials, people) to achieve the goals.
But organization structure and design are not just a means of ensuring work and activities are structured and
coordinated in the most efficient way, an effective structure also aids planning, decision making and minimizes
work-related problems and conflict between departments and functions due to competing goals or unclear work
expectations. Whereas early classical and scientific management studies focus on finding the one best way of
structuring an organization (e.g., Weber’s bureaucracy), contingency theorists argue there is no one organization
structure and design that is appropriate to every organization – instead, managers need to understand which
organization structure is most appropriate given their organization’s goals, type of technology, product or service,
and the environmental demands and constraints.
Managers therefore need to understand how to create an organization structure and design that takes into account
all these contingencies and is both effective and efficient. To do so, they need to be able to analyse their own
organization and its environment, determine the most appropriate design, implement, continually monitor and revise
the structure and design to ensure it remains effective