1. A Comparison offive popular Organization Design Models April 2012
2. Organization Design Models- A comparisonOrganization Design is not an exact science. The success of anyapproach lies in making the design exercise logical and objective.Over the years, many models have been developed for understandingthe various elements of Organization Design. The objective has been toprovide a framework to understand the intricacies of organization design.We present here five most popular models for Organization Design withtheir benefits and limitationsWe hope that knowing the benefits and limitations of each model assistsyou in making the right choice for designing your organization Source: Guide to Organisation Design: Creating High-Performing and Adaptable Enterprises By Naomi Stanford, John Wiley& Sons, 2007
3. McKinsey’s 7S Model Published by Waterman & Peters in 1980s, this is the most commonly accepted model. Its popularity lies in the fact that both hard elements and soft elements have been considered and their interactions are firmly establishedBenefits Limitations• Description of important organizational • No external environment (input)elements. /throughput /(output) element• Recognition of the interaction between •No feedback loopsthe elements. •No performance variables.
4. Developed by Jay Galbraith in Galbraith’s Star Model 1960s, the star model is widely accepted because of the Strategy approach that seamlessly links competitive advantage to strategy to structure , people , lateral processes and reward mechanisms People Structure Rewards Processes Behavior Performance CultureBenefits Limitations•Description of important • Does not “call out” some keyorganizational elements elements including inputs/outputs•Recognition of the interaction culturebetween the elements
5. Developed by Marvin Weisbord in the 1970s, this Weisbord Six Box Model model gives attention to issues such as planning, incentives and rewards, the role of support functions ,internal competitions among organizational units, and Purpose the delegation of authority, organizational control, What business are we accountability and performance assessment in? Relationships How do we manage Structure conflict among How do we divide people? up the work? With technology? Leadership Does someone keep the boxes in balance? Helpful Mechanism Have we adequate co- Rewards Do all needs tasks ordinating Environment have incentives? technologiesBenefits Limitations• Includes some diagnostic • Focus on some elements mayquestions in each box lead to overlooking of others• Requires the purpose to bestated
6. Nadler and Tushman’s Congruence Model Developed by David A Nadler and M L Tushman in the early 1980s, the basic principle of this model is that an organizations performance is derived from four elements: tasks, people, structure, and culture. The higher the congruence, or Informal compatibility, amongst these elements, the Organization greater the performance. Output Input Individual, Strategy, Formal Work team and Resources, Organization organizational Environment performance PeopleBenefits Limitations•Easy to follow • Few named elements may lead to•Allows for discussion of what wheel spinning or overlooking ofcomprises informal & formal crucial aspects.organizations•Boxes must be congruent with eachother
7. Developed by Burke & Litwin in 1992, this model shows the various drivers of change and ranks Burke-Litwin Model them in terms of importance. The model is expressed diagrammatically, with the most important factors featuring at the top. The lower External layers become gradually less important. Environment Mission & Organization Strategy culture Leadership Management Structure Practice Systems Work unit Climate Task requirements Individual needs and individual and values skills Motivation Individual and Organizational PerformanceBenefits Limitations• Includes feedback loops • Very detailed• “Calls out” more qualitative • Difficult to grasp at a glanceaspects(e.g. motivation)