Building the Future: HR’s Role in Organizational Design By Steve Weingarden, Ph.D. STRATEGIC HR MANAGEMENT STUDENT WORKBOOK

Building the Future: HR’s Role
in Organizational Design
By Steve Weingarden, Ph.D.
STRATEGIC HR MANAGEMENT
STUDENT WORKBOOK
Project Team
Author: Steve Weingarden, Ph.D.
SHRM project contributor: Bill Schaefer, SPHR, CEBS
External contributor: Sharon H. Leonard
Copy editing: Katya Scanlan, copy editor
Design: Jihee Lombardi, senior design specialist
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
For more information, please contact:
SHRM Academic Initiatives
1800 Duke Street, Alexandria, VA 22314, USA
Phone: (800) 283-7476 Fax: (703) 535-6432
11-0100-SW
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D. 1
This case study provides a history and overview of organizational design (OD). You
will use the information in the overview to complete an exercise as a hypothetical
organizational design consultant working with a real company of their choice.
You will read about the defi nition and purpose of organizational design, methods
of measurement, six models of organizational structure and two models on how to
apply organizational structure principles.
This case provides an overview of organizational design and includes a scenariobased structured exercise. It is intended for advanced undergraduate students.
Students studying human resources (HR) will likely benefi t most, but general
business students should gain insight from the module, particularly regarding the
role of HR in organizational design.
LearNING oBjectIVeS
You will participate in a structured exercise about organizational design, learning
overarching principles and critically applying those principles to a hypothetical
consulting situation. At the end of the case, you will be able to:
1. Identify how organizations gain sustainable competitive advantage through
human capital strategies such as organizational design.
2. Describe HR’s role in developing human capital strategies and HR’s effect on an
organization’s success.
3. Apply an organizational design consulting model to an organization.
Case Overview
2 © 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
Read this section before attempting the structured exercise.
DeFINItIoN aND PUrPoSe oF orGaNIZatIoNaL DeSIGN
Organizations are composed of deliberately selected and deselected people who
coordinate their efforts toward a specifi c goal (Etzioni, 1964). The ultimate purpose
of an organization is to achieve a specifi c goal or mission. The people selected
(whether self-selected or chosen) and deselected are signifi cant in some manner that
helps the organization achieve the desired goal.
Organizational design centers on the organization’s human resource needs to
achieve the organization’s specifi c goal. Organizational design answers the question,
“What is the best organizational structure?” and has two objectives:
1. To facilitate the fl ow of information within the organization.
2. To integrate organizational behavior across different parts of the organization so
the behavior is coordinated (Duncan, 1979; see also Stanford, 2007 for a similar
defi nition).
Organizational structure and its connection to strategy are core components of the
organizational design process.
Organizational Design:
An Overview
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D. 3
Expertise in “C” Expertise in “D”
Organizational design centers on the human resource
requirements an organization needs to achieve its specifi c goal.
Coordination of Behavior
Information
Flow
Information
Flow
Information
Flow
Information
Flow
Expertise in “A” Expertise in “B”
Coordination of Behavior
Coordination
of Behavior
Coordination
of Behavior
Organizational
Mission
and Goals
4 © 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
The organizational design defi nition presented in this case is simplifi ed; scholars
tend to defi ne organizational design more broadly. For scholars, organizational
design often refers to all aspects of the relationship between the organizational work
and the employee (Sandler, 1974). This relationship includes organizational strategy
and structure as well as more granular issues such as work processes and leadership
(e.g., see Burton, DeSanctis and Obel, 2006; Nadler, Tushman and Nadler, 1997).
In fact, it is the organizational design process—specifi cally the structuring process—
that is the pivotal connector between the business of the organization (e.g., top-level
leadership and organizational strategy and goals) and the other forms of HR support
(e.g., workfl ow process design, selection, development and compensation).
An example of this connection is provided through an integrated management
system known as requisite organization. One implementation map of requisite
organization involves an eight-step process:
Step Process
1 Build the senior leadership team.
2 Design the organizational strategy.
3 Determine the structure needed to implement the strategy.
4 Design the working relationships between functions.
5 Ensure people are in the right roles for now and in the future.
6 Manage performance; ensure that managers are skilled at managerial leadership.
7 Strengthen the role of managers who are responsible for managing other managers.
8 Build the compensation system.
Adapted from Dutrisac, Koplowitz and Shepard (2007).
This case focuses on how to determine the structure needed to implement strategy
and set the foundation for other HR processes.
The HR practitioner’s main role in the organizational design process is that of
partner. There are three core aspects of this partnering relationship:
1. To provide leaders with structural diagnosis through identifi cation of the root
causes of organizational performance issues.
2. To help leaders evaluate a range of design options by offering clear design criteria.
3. To ensure that leaders align their organizational design decisions to short-term
and long-term strategic goals by identifying critical organizational activities and
current areas of strength and weakness (Corporate Executive Board, 2009).
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D. 5
With these aspects of the relationship in mind, the HR practitioner best contributes
to the partnership by:
 Providing tools that measure the current internal and external environment and
current organizational structure.
 Offering knowledge of various organizational structures, including the pros and
cons associated with each structure.
 Reinforcing that leaders consider strategy as a cornerstone in their design and
structure decisions.
These activities represent the strategic role of HR, encouraging HR professionals to
engage with others in the organization to create the right culture and build the right
organization (SHRM, 2007).
Most of the HR practitioner’s organizational design work occurs when an
organization’s design needs to be revisited or redesigned because changes in the
competitive environment require changes for the organization and its goals; a
redesign may be needed to maintain or achieve alignment (Nadler, Tushman, &
Nadler, 1997).
In fact, it is critical to identify the current organizational strategy and the internal
and external environment of the organization to develop the structure. Structures
must fi t the current and future environment of an organization. Reorganization
is needed when the current structure does not align with the situation (Bolman
and Deal, 2003). To understand the current and future organizational strategy,
it is essential that the OD consultant, whether internal or external, has access and
input into the knowledge gained through senior leadership decisions regarding
organizational direction. The OD consultant must have the available scope to
identify the number of items that go into organizational design decisions (Robinson
& Robinson, 2005).
The fi rst step to determine the most appropriate organizational design is to identify
aspects of the organizational environment. A large component of the internal
environment is determining where an organization is in the organizational life
cycle. Organizational life cycle models depict stages where an organization is born,
develops, grows, matures and dies.
One of the more delineated models of the organizational life cycle is summarized on
the following page.
6 © 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
Passage organization Description
courtship ■ There is no organization.
■ Founders are in love with an idea.
Infant
■ Very busy doing.
■ Risk is introduced.
■ Focus is on short-term results.
■ Idea generation is no longer vital.
Go-go
■ Moves fast and often intuitively.
■ Danger of having too many opportunities viewed as priorities.
■ Short-term focused but with vision.
■ Founders may be using strategies that are no longer effi cient.
adolescent
■ Planning and coordinating for the long term.
■ Less focus on short-term results.
■ Employees desire organizational stability.
Prime
■ Stable and predictable results.
■ Plans and procedures are in place for achieving effi ciency.
■ Awareness of external environment.
■ May become more inward-focused toward the end of this stage.
mature
■ Results-oriented.
■ Institutionalized systems.
■ More interpersonal relationships.
■ Sense of urgency is lost.
aristocratic
■ Admiration of the past and desire to maintain status quo.
■ More interested in how something is done (ritual) than what is done or why it is done.
■ Less awareness of external competition.
■ May see increased prices for product or service.
early
Bureaucracy
■ Results stray from earlier higher levels.
■ In-fi ghting and expulsion of some leaders.
Bureaucracy
■ Very little is accomplished.
■ Peaceful and friendly.
■ Agreement without action.
Death ■ No results.
■ Organization is dissolved.
Adapted from Adizes (1979).
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D. 7
There are no guarantees that an organization will make it from one stage to the
next. In fact, one of the key opportunities for an OD consultant is to recognize
indicators that suggest an organization is in a risky or an unhealthy stage and aid in
making adjustments. One example might be the recognition that an organization
has extreme levels of formalization (e.g., an inappropriate desire for everything to be
written) as part of a greater overall syndrome. Reverence for documentation might
suggest that an organization is in the bureaucracy phase, which would place it at risk
of death. An OD consultant could help redirect the organization to a healthier stage.
In addition to the organization’s life cycle, other aspects of the organizational
environment should be considered for organizational design or redesign (Duncan,
1979).
Internal environment external environment
Organizational goals
Talent management strategy
Cross-functional cooperation and
confl ict
Customer and client profi les
Suppliers’ profi les
Competitors’ profi les
Sociopolitical environment
Industry technology environment
Adapted from Duncan (1979).
The above list is intended to be overly inclusive (Duncan, 1979). Each organization
will have varying environmental factors that infl uence decision-making. Ideally, the
OD consultant will ask questions (e.g., “What are your strategies?”, “Who are your
key clients?”, “How is your competitive environment changing?”) about the most
relevant environmental demands or will identify those key demands through direct
client focus.
8 © 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
meaSUrING tHe cUrreNt orGaNIZatIoNaL StrUctUre
An analysis of an organization’s internal and external environment is necessary when
deciding what structure will best aid the organization.
Understanding of the internal environment is achieved through the measurement of
the following structural dimensions:
Structural Dimension Description
Specialization Degree to which an organization’s activities are divided into specialized roles.
Standardization Degree to which an organization has standard rules or procedures.
Formalization Degree to which instructions and procedures are written down.
centralization Degree to which the authority to make certain decisions is located at the top of
the management hierarchy.
confi guration
The shape of the role structure of the organization. This includes:
 Chain of command: the number of vertical levels or layers on the
organizational chart.
 Span of control: the number of direct reports per manager; number of
horizontal levels or layers on the organizational chart.
Adapted from Pugh (1973).
These dimensions are usually measured through a survey and subsequent analysis.
It should be noted that in measuring the internal organization, the question then
arises, “What level for each dimension is appropriate?” It is important to understand
that the structural dimensions are more for comparison purposes rather than overall
intensity measurement. These dimensions are especially useful in defi ning a profi le
for where an organization may be in terms of:
 Self-perception of culture.
 External perception by clients and customers.
 External comparisons to competitors.
 External perceptions by potential partners.
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D. 9
Understanding of the external environment is achieved through the measurement of
contextual factors:
contextual Factor Description
origin and history
Whether an organization was privately founded; the kinds of changes
in ownership, location and other related changes the organization has
experienced.
ownership and control Type of ownership (e.g., private or public). Is control divided among a few
individuals or spread among many individuals?
Size Number of employees, net assets and market position.
charter Nature and range of goods and services.
technology Degree of integration achieved in an organization’s work processes.
Location Number of geographically dispersed operating sites.
Interdependence Extent to which an organization depends on customers, suppliers, trade unions,
any owning groups or other related entities.
Adapted from Pugh (1973).
Contextual dimensions help formulate a better understanding of the external
environment and the relationship between the internal and external environment.
Once the structural dimensions and contextual factors have been examined and the
connection between an organization’s structure and strategy is understood, the OD
consultant can consider alternatives for solution design. The art of organizational
design is assessing the essential aspects of the environment and their meaning for the
organization’s future. Translating those aspects into the right structure is critical to
building results like increases in effi ciency and cost avoidance. There is no one best
structure, and the consultant’s decisions depend on the supporting evidence for each
organization.
10 © 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
moDeLS oF orGaNIZatIoNaL StrUctUre
As stated above, there is no one best organizational structure; however, several
forms have emerged over time. Most current thought leaders address the vertical and
horizontal structures (at a minimum). Much of the following summaries of vertical,
vertical and horizontal, and open boundary structures are adapted from Anand and
Daft (2007).
Vertical Structures (Functional and Divisional)
Two main types of vertical structure exist, functional and divisional. The functional
structure divides work and employees of the organization by specialization of
activity. For example, all HR professionals are part of the same function and report
to a senior leader of the HR function. The same reporting process would be true
for other functions, such as fi nance or operations. A functional structure provides
the advantage of having technical expertise located in one place. The structure tends
to be resistant to change, though, and cross-functional activity is more diffi cult to
promote.
Functional
Senior Leader
Work Specialization A
Employees
Work Specialization A
Sub-function 1
Employees
Work Specialization A
Sub-function 2
The work of one organization is divided by specialization of activity.
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D. 11
In a divisional structure, work and employees are most often divided by output,
although a divisional structure could be divided by another variable such as
geography. An example of a divisional structure would be a food manufacturer that
divides work and employees by the type of food product. The candy division would
have an entire staff (e.g., HR, fi nance and operations staff), while the frozen foods
division would have an entirely different staff (e.g., HR, fi nance and operations
staff). The divisional structure provides more focus and fl exibility on each division’s
core competency and allows for more coordination than the functional structure.
In a divisional structure, however, there is less interaction between employees
with similar technical career paths; there are no centers of excellence. A divisional
structure can also result in a loss of effi ciency and duplication of effort because each
division needs to acquire the same resources.
Divisional
The work of one organization is divided by output.
Senior Leader
Product A&B
Employees
Product A
All Functions
Employees
Product B
All Functions
12 © 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
Vertical and Horizontal Structure (Matrix)
As a solution for some of the issues found in the functional structure, matrix
structures are sometimes used. A matrix structure combines the functional
structure with the divisional structure and creates a dual-command situation. An
example of a matrix structure would be a clothing manufacturer that divides work
and employees by function, but also arranges employees to have accountability to
a geographical manager. The major advantage of the matrix organization is that it
creates a functional and divisional partnership, and the intent of the structure is
to focus on the work more than the people. The common disadvantage for matrix
structures is that it is hard to manage. The matrix structure also requires greater
interpersonal competency by organizational staff. These disadvantages can be
exacerbated in situations where the matrix goes beyond two-dimensional (e.g., a
function’s employees report to two different managers) to multi-dimensional (e.g., a
function’s employees report to more than two different managers).
Matrix
The work of one organization combines a functional and divisional structure.
Senior Leader
Work Specialization A
Senior Leader
Product A
Employees
Work Specialization A
& Product A
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D. 13
Open Boundary Structures (Hollow, Modular and Virtual)
More recent trends in structural forms remove the traditional boundaries of an
organization. Structures using this “boundary-less” concept include the hollow,
modular and virtual organizations (Anand & Daft, 2007). Please note that in the
following charts, distinctions between organizations and size of work are depicted
through the use of “encompassing” boxes and alterations to the size of individual
graphics.
Hollow structures divide work and employees by core and non-core competencies.
Hollow structures are an outsourcing model. The organization maintains its core
processes internally but outsources non-core processes. Key to this model is that
work processes are the point of decision. For this model to succeed, incentives must
be aligned between the organization and the outsourcing organizations. Hollow
structures are most effective when the industry is price competitive and there
are enough choices for outsourcing. An example of a hollow structure is a sports
organization that has its HR functions (e.g., payroll and benefi ts) handled by outside
organizations.
Consideration of organizational environment remains crucial in open boundary
models. For example, some industries cannot outsource non-core processes due
to government regulation (for example, health insurance organizations may face
considerable problems in outsourcing Medicare processes). In some cases, the
potential for outsourcing may have to be negotiated with a union.
Hollow
The work processes of one organization are split between
internal employees and outsourced organizations.
Senior Leader
Organization A
Employees
Organization A
Core Competency Process
Employees
Outsourced Organization
Non-Core Competency Process
14 © 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
Modular structures differ from hollow organizations in that components of a
product are outsourced. Modular structures may keep a core part of the product
in-house and outsource non-core portions of the product. An example of a modular
structure is a headwear manufacturer that outsources hat knitting, purchases the
pre-shaped hat and then applies specialized embroidery in-house before placing the
headwear on the market. Modular structures can help with effi ciency and speed
and may lead to increases in quality. For the modular structure to be an option, the
product must be able to be broken into chunks.
In a modular structure, risk occurs if the parent organization removes itself from the
quality check on the end product or if the outsourced organization uses a second
outsourced organization. In those cases, the reputation of the parent organization
may be compromised if the product quality is jeopardized and the name of the
parent organization appears on the product.
Modular
The work product of one organization is split between
internal employees and outsourced organizations.
Senior Leader
Organization A
Employees
Organization A
Core Piece of Product 1
Employees
Outsourced Organization
Non-Core Piece of Product 1
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D. 15
Virtual structures are collaboration organizations. Partnerships are formed
with external organizations—often competitors—that complement one another’s
competence. These structures are created to respond to an exceptional and
often temporary marketing opportunity. An example of a virtual structure is an
environmental conservancy where multiple organizations provide employees to a
virtual organization to save, for example, a historical site, possibly with the intent
of economic gain for the partner organizations. Virtual structures require increased
communication. Two potential drawbacks to virtual structures are a lack of trust
between organizations and a lack of organizational identifi cation among employees.
In the conservancy example, the lack of trust may lead to competition instead
of cooperation, and employees in the virtual structure may lack a common goal,
possibly jeopardizing the opportunity for success.
Virtual
The work and employees of two organizations are
combined to form a partnership.
Employees
Organization A
Core Competency from Organization A
Employees
Organization B
Core Competency from Organization B
Open boundary structures may add pressure to OD consultant’s decisions.
Arguably, there is more risk associated with open boundary designs. Employees in
the current structure could be adversely affected in the name of effi ciency. Because
open boundary designs represent external partnerships, if restructuring does not
lead to greater organizational effectiveness quickly, organizations may be quick to
abandon change. This would be seen as a failure for the OD consultant.
Other structures exist beyond those reviewed here. As noted with the matrix
structure, creation of a new structure may be appropriate. It is the OD consultant’s
responsibility to identify and propose the best structure to fi t a particular situation.
16 © 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
moDeLS to aPPLY StrUctUre PrINcIPLeS to orGaNIZatIoNaL
DeSIGN
An OD consultant needs models and tools to guide an initiative with a client. In
organizational design consulting, the types of information a consultant wants to
obtain and present relate to the previous content in this module. That information
helps determine the fi t of the current structure, possible redesigns and the link to
organizational strategy. Many different models and tools exist or could be created
to help with organizational design. Two of the more popular diagnostic models are
briefl y covered here.
Goold and Campbell’s Toolkit
Goold and Campbell (2002) reviewed how organizational executives make design
decisions and created nine tests of organizational design. The tests are questions
for the consultant to ask the organizational executive and for the organizational
executive to then decide whether a possible design meets the standards. Four of the
tests are related to fi t, and the remaining tests are related to good design. The tests
are summarized below.
test Key Question
market advantage Does your design direct suffi cient management attention to your sources of
competitive advantage in each market?
Parenting advantage Does your design help the corporate parent add value to the organization?
People Does your design refl ect the strengths, weaknesses and motivations of your
people?
Feasibility Have you taken account of all the constraints that may impede the
implementation of your design?
Specialist culture Does your design protect units that need distinct cultures?
Diffi cult links Does your design provide coordination solutions for the unit-to-unit links
that are likely to be problematic?
redundant hierarchy Does your design have too many parent levels and units?
accountability Does your design support effective controls?
Flexibility Does your design facilitate the development of new strategies and provide
the fl exibility required to adapt to change?
Adapted from Goold & Campbell (2002).
The Goold and Campbell tests of organizational design help balance the right
amount of hierarchy, control and process into organizational structure.
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D. 17
Galbraith’s Star Model
Galbraith’s Star Model of organizational design links strategy to structure. Five
organizational design categories included in the Star Model are strategy, structure,
processes, rewards and people. Conceptually, the fi ve categories are interrelated;
changes in one category affect another.
Star
Model
Strategy
People
Rewards
Structure
Processes
Adapted from Galbraith, 2005.
Aspects of the Star Model may be more or less important depending on the
organization. What is crucial is to ensure that the fi ve categories align with each
other.
From a practitioner standpoint, the one common theme is that it is important to
stay focused on strategy each step of the way (e.g., see Williams & Rains, 2007).
KeY taKeaWaYS From tHe oVerVIeW
1. Organizational design should be linked to strategy.
2. HR’s role in organizational design is strategic and sets the foundation for
additional HR work and processes.
3. Consider the organizational environment.
4. Open your mind to internal and external design models.
5. Use models and tools to lead the organizational design process.
18 © 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
Structured Exercise
YoUr roLe aND tHe orGaNIZatIoN
You are a consultant at a management consulting organization with expertise in
human resources. Your organization specializes in organizational design, helping
clients analyze their existing organizational design, providing alternative models, and
discussing the costs and benefi ts of each model.
The scope of your organization’s work sometimes encompasses design or redesign of
an entire organization, but mostly the focus is at the departmental level.
The general operating model and business process for your organization is shown
below.
Your Organization’s Operating Model
Your Consulting Firm’s Model of Work
We help our clients scope, design and develop organizational design solutions.
Organizational Design Core Work
What we do
Scope Design Detailed
Design
Implement Evaluate
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D. 19
Your organization tends to manage projects using a seven-step process. A pivotal step
to your organization’s success is the internal review meeting where you share your
recommendations with other members of your organization.
Phase Involved Parties Key activities
1. Initial client discussion
■ Client
■ Assigned consultants
from your organization
■ Conversation about
organizational and
departmental needs
■ Discussion of possible
barriers to organizational
effectiveness
2. Determination of project
■ Client
■ Assigned consultants
from your organization
■ Brief recommendation to
client about goals of the
project and the work to be
completed
■ Agreement by client that there
is a project
3. Information gathering
■ Client subject matter
experts
■ Assigned consultants
from your organization
■ A review of the current state
of the organization and/or
department
■ Appropriate interviews
4. Solutions design ■ Assigned consultants
from your organization
■ Identifi cation of alternative
models
■ Analysis of advantages versus
disadvantages
5. Internal review meeting ■ All members of your
organization
■ Presentation of
client needs and
recommendations
■ Shared learning and
feedback from colleagues
at your organization
6. client presentation
■ Client
■ Assigned consultants
from your organization
■ Recommendations
presentation and document
and discussion with client
■ Agreement on solution
7. refi nement ■ Assigned consultants
from your organization
■ Changes to project
recommendation
■ Preparation for
implementation
20 © 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
cUrreNt ProjectS
Your organization currently has several client projects underway. You have been
assigned to one of those projects. As part of your work, you are expected to:
1. By using organization design models, analyze the situation associated with the
consulting engagement to which you are assigned.
2. Form recommendations for the design/redesign of the structure associated with
the particular consulting engagement.
3. Participate in the internal review meeting discussion about the recommendations,
including the similarities and differences between the consulting engagements
undertaken by each of the student groups or individual students.
For the information gathering step, prepare to brief your classmates on your
consulting engagement in two to three minutes. Explain what the client
organization does, what the client organization is interested in accomplishing
and how your organization can help the client organization. Specifi cally,
make recommendations for your client and provide support for why those
recommendations are appropriate. Following your presentation, open the fl oor for
discussion with your classmates and instructor. Your classmates and instructor will
offer supportive feedback and constructive challenges to your recommendations. The
discussion should last fi ve to eight minutes.
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D. 21
YoUr aSSIGNmeNt
1. Read the “Organizational Design: An Overview” background information.
2. Select an organization as the consulting client. This can be an organization at
which you work or an organization that you research. Use the organization’s
website, government websites and/or commercial websites such as Hoovers
(www.hoovers.com) to learn more about the organization. After collecting
as much information as you can through the Internet, consider using library
database search engines to supplement the information.
3. Collect as much information as you can to answer questions related to
the organizational design. Some of the information may include evidence
of organizational strategy, stage in the organizational life cycle, internal
environment, external environment, structural dimensions and contextual
dimensions. Use the “Organizational Design Consulting Survey” to capture
information related to your client.
4. Once you have collected suffi cient information about the organization,
brainstorm design models that might fi t with the organization’s strategy.
5. Form your recommendations about organizational design. Note the reasons
and risks associated with your recommendations. Use the “Organizational
Design Recommendation Form” to capture the recommendations for your
client.
6. Prepare your presentation for the internal review meeting. This should consist
of speaking notes (either in a text document or in graphical presentation
form) that summarize information related to the selected organization, and
recommendations and supporting evidence. You may use the “Internal Review
Meeting Preparation Form” to organize your speaking notes, or you can create
your own template.
7. Participate in the internal review meeting. Be sure to review the “Ground
Rules for the Internal Review Meeting.”
22 © 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
orGaNIZatIoNaL DeSIGN coNSULtING SUrVeY
Use this form when collecting information about your client organization. Use those
questions that seem most relevant. You will probably be unable to answer some of
the questions.
Organizational Purpose
■ What is the mission of this organization? What are the main goals?
■ What organizational cultural beliefs support the mission and goals of the
organization?
■ How does the organization measure its success?
Organizational Passage
■ Describe the historical development of this organization.
■ How does this organization respond to risk?
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D. 23
■ Describe the balance between short-term and long-term focus for this
organization.
■ Describe how this organization approaches its external environment. How aware is
this organization of its external environment?
■ How much emphasis does this organization put on results, both short term and
long term?
Internal Environment
■ How well does this organization coordinate across functions? How is information
shared across functions?
■ What are the core processes and products provided by this organization? What
unique processes and products does the organization produce well?
■ Are there processes and products that prevent this organization from optimal
performance? If so, how?
24 © 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
External Environment
■ Describe the clients of this organization. Are there potential future clients that are
desirable for this organization?
■ What suppliers does this organization depend on to meet its mission and goals?
■ Describe the competitors of this organization. What are some industry trends?
■ Is there any regulation anticipated that will affect this organization and its
industry? Please explain.
■ Is there any new technology anticipated that will affect this organization and its
industry? Please explain.
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D. 25
Structural Dimensions
■ What activities at this organization are performed by specialists?
■ How specifi c are procedures at this organization? Does this organization use
detailed work processes?
■ How important are items such as employee handbooks, organizational charts and
job descriptions to this organization?
■ What levels of leadership have decision-making authority at this organization? Is
this organization focused on employee empowerment?
■ What is the span of control at the highest level of the organization (i.e., CEO
level)? What is the span of control for fi rst-line supervisors at this organization?
26 © 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
Contextual Factors
■ Describe any major changes that have occurred in the history of this organization.
■ Explain the ownership structure of this organization.
■ How many employees work at this organization? What fi nancial information is
available for this organization? How does this organization rank in comparison to
its competitors?
■ What are the goods and services this organization provides that support its
mission?
■ How specialized is the equipment used by this organization? Can work only be
performed sequentially? Or is simultaneous work permissible for this organization?
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D. 27
■ How is this organization structured geographically?
■ How dependent is this organization on its largest suppliers? How dependent is this
organization on its largest customers?
28 © 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
orGaNIZatIoNaL DeSIGN recommeNDatIoN Form
Use this form to record your recommendations for organizational design for your
client organization. Also, feel free to use the organizational design models presented
in the module to help defi ne your ideas for this form.
Strategic mission and goals
of client organization
Strategic gap related to
client’s current organization
design
Strategic goals of
recommended organization
redesign
recommended model for
client organization
Why is the recommended
model most appropriate?
Why are other models not
appropriate?
What are the risks
associated with your
recommended model?
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D. 29
INterNaL reVIeW meetING PreParatIoN Form
Key descriptive points about
your client organization
1.
2.
3.
Key points about your client
organization’s strategy
1.
2.
3.
other key points about your
client organization
1.
2.
3.
Your recommendation and
how the recommendation
links to strategy
1.
2.
3.
Key points supporting your
recommendation
1.
2.
3.
Respect the time limit for presenting your recommendations. Plan to present for 2-3 minutes and use an additional 5-8 minutes
to address questions from other consultants.
30 © 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
GroUND rULeS For tHe INterNaL reVIeW meetING
1. The internal review meeting is the opportunity to present your organizational
design recommendations to colleagues before presenting them to your client.
2. Prepare the presentation for the internal review meeting in advance and rehearse
it with the consideration that your colleagues do not know about your client
organization, its strategy or environment. Provide enough description so your
colleagues can offer effective feedback.
3. Respect the time limit for the presentation. Focus on key points and keep
statements direct. Try to limit sentences to fi ve to eight words. Decide what the
key messages are and reiterate those messages. Be sure your presentation pieces
align. For example, your design recommendation should be consistent with the
strategy and environmental issues you present.
4. Have additional information available and be knowledgeable about your client
organization. This will facilitate discussion and your ability to answer questions
posed by your colleagues.
5. When serving as a colleague for recommendations presented by others, approach
the situation as if you were a senior leader at the client organization.
6. Provide other consultants (classmates) with feedback that supports and challenges
their recommendations.
7. Remember, the goal of the internal review meeting is to develop the best
solutions for your client organization.
© 2011 Society for Human Resource Management. Steve Weingarden, Ph.D. 31
Adizes, I. (1979). Organizational passages: Diagnosing and treating lifecycle
problems of organizations. Organizational Dynamics, 8(3), 3-25.
Anand, N., & Daft, R. L. (2007). What is the right organization design?
Organizational Dynamics, 36(4), 329-344.
Bolman, L. G., & Deal, T. E. (2003). Reframing organizations: Artistry, choice and
leadership (3rd ed.). San Francisco, CA: Jossey-Bass.
Burton, R. M., DeSanctis, G., & Obel, B. (2006). Organization design: A step-bystep approach. New York: Cambridge University Press.
Corporate Executive Board. (2009). HR’s role in organizational restructuring:
Driving effective enterprise change. Arlington, VA: Corporate Executive Board.
Retrieved December 18, 2009, from https://clc.executiveboard.com/Public
/Default.aspx.
Duncan, R. (1979). What is the right organization structure? Decision tree analysis
provides the answer. Organizational Dynamics, 7(3), 59-80.
Dutrisac, M., Koplowitz, H., & Shepard, K. (2007). An executive’s guide to RObased organizational design. In J. L. Gray, J. G. Hunt, & S. McArthur (Eds.),
Organization design, levels of work & human capability (27-52). Ontario, Canada:
Global Organization Design Society.
Etzioni, A. (1964). Modern organizations. Englewood Cliffs, NJ: Prentice-Hall, Inc.
Galbraith, J. (2005). Designing organizations: An executive briefi ng on strategy,
structure, and process. San Francisco: CA: Jossey-Bass.
Goold, M., & Campbell, A. (2002). Do you have a well-designed organization?
Harvard Business Review, 80(3), 117-124.
Gottlieb, M. R. (2007). Matrix organization reloaded: Adventures in team and
project management. Westport, CT: Praeger Publishers.
Greiner, L. E. (1972). Evolution and revolution as organizations grow. Harvard
Business Review, 50(4), 37-46.
Greiner, L. E. (1998). Evolution and revolution as organizations grow. Harvard
Business Review, 76(3), 55-68.
Jacques, E. (1999). Requisite organization: A total system for effective managerial
organization and managerial leadership for the 21st century (2nd revised ed.).
Gloucester, MA: Cason Hall.
References
32 © 2011 Society for Human Resource Management. Steve Weingarden, Ph.D.
Nadler, D. A., Tushman, M. L., & Nadler, M. B. (1997). Competing by design: The
power of organizational architecture. New York: Oxford University Press.
Pugh, D. S. (1973). The measurement of organization structures: Does context
determine form? Organizational Dynamics, 1(1), 19-34.
Robinson, D. G., & Robinson, J. C. (2005). Strategic business partner: Aligning
people strategies with business goals. San Francisco, CA: Berrett Koehler.
Sandler, B. E. (1974). Annotated bibliography on approaches to organizational
design. Professional Psychology, 5(3), 353-356.
Society for Human Resource Management. (2007). The SHRM learning system:
Strategic management. Alexandria, VA: Society for Human Resource Management.
Stanford, N. (2007). Guide to organization design: Creating high-performing and
adaptable enterprises. London, England: Profi le Books.
Williams, T. C., & Rains, J. (2007). Linking strategy to structure: The power of
systematic organization design. Organization Development Journal, 25(2), 163-170.
If you are not a SHRM member and would like to become one, please visit www.shrm.org/join.
1800 Duke Street
Alexandria, VA 22314-3499

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