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Organization design is the practice of bring into line an organization's structure with its operation. This means looking at the multifaceted correlation between tasks, the flow of work, accountability, authority, and making certain that all these support the purpose of the business.
Good organizational design allows for communications, efficiency, productivity and innovation. It creates an atmosphere where individuals can work effectively. How work is done, organisations processes, information partaking and how staff are incentivized; all of these directly have an effect on how well the business performs. All of these factors are aspects of the organization's design and each aspect is significant to the organization's success.
Many productivity and efficiency issues can be drawn back to deprived organization design. A company that has a great mission, great people, and great leadership, can perform well because of good organizational design. Take the example of a Macy’s organisation where the company wants to grow by acquiring new clients. Yet its sales team is waged for customer withholding instead: As a result, the company’s performance is compromised as a result.
Grouping tasks that require similar knowledge, expertise and resources facilitates them to be done efficiently and uphold the development of greater expertise. Concurrent with the expansion of Macy's, the business is being transformed into a unified operational structure to support the Macy's business all over the country. This change is expected to lower central office and managerial expense, eradicate duplication, sharpen implementation, and help the organisation to move faster and associate more effectively with its contractors and business partners
Organisations that are spread over a wide area may find an advantage in organising along geographic lines thus; all the activities carried out in a region are managed as one. In a large organisation, a simple physical partition makes centralised management more difficult. Also, important features of a region may make it beneficial to promote a local focus. Companies that advertise products globally at times adopt a geographic structure. In addition, knowledge gained in a provincial division is habitually outstanding training for management at higher levels.
An organisation may find it beneficial to organise according to the type of clients it serves. For example Macy’s that has various departmental stores may decide to base its main divisions on the diverse markets. Its employees can then become proficient in meeting the requirements of this different clientele. Mercy’s selection of clothing merchandise can vary significantly from place to place, resulting in the exclusive availability of various brands in only higher end stores. Mercy’s goal is to increase sales growth in existing locations by making certain that potential customers surrounding each Macy's store find commodities assortments and shopping skill custom-tailored to their precise needs.
An effective organizational design structure shall enhance working relationships between various entities in the business and may improve the working efficiency within the organizational units.