This document discusses organizational design and the importance of fitting an organization's structure to its context. It outlines five basic organizational configurations: simple structure, machine bureaucracy, professional bureaucracy, divisionalized form, and adhocracy. Each configuration aligns with different environmental contexts in terms of stability, complexity, and other factors. The key message is that an organization's effectiveness depends on coherence between its structure and context, not on assuming all organizations have the same design.

1. ORGANIZATION DESIGN:
FASHION OR FIT
GROUP 8 (SECTION D)

2. ROADMAP
1. Why organizations fail?
2. Components of an organization
3. Context of an organization
4. Five basic Configurations
5. OD – a diagnosis tool?
6. Fashion Vs fit

3. MAIN PROBLEM IN ORGANIZATIONAL
DESIGN
• Assumption that all organizations are alike
• Ex: A hospital or an University has a totally organizational
design when compared to a factory floor
• Assumption that effectiveness drives design and
coherence amongst the components when it’s
other way round

4. COMPONENTS OF ORGANIZATION
• Take Strategic Decisions w.r.t.
Top management organization
Operating core • Basic work of an organization
Middle line • Intermediate management
• Operational Design of core activity of
Technostructure organization
• Every other service other required for an
Support Staff organization

5. ILLUSTRATION OF COMPONENTS IN A
RESTAURANT
Owner- Top Management
Watchman, Cashier, sweeper –
Head Chef - Technostructure Manager – middle management
Support Staff
Cooks, Waiters – Operating core
Note: Not all organizations need all these parts.

6. CONFIGURATION AND CONTEXT
Organization
Structure
c
o
h
e Organization
r
e Effectiveness
n
c
e
Organization Context

7. PARAMETERS OF CONTEXT
• Size & Age
• Technological Dependence
• Environmental factors
• Simple/Complex
• Stable/Unstable
• Power
• External
• Internal

8. PARAMETERS OF STRUCTURE
• Standardization
• Formalization
• Hierarchy

9. 5 CONTEXTS – 5 STRUCTURES
Context
Mutual
Direct Supervision Standardization of Standardization of Standardization of
Adjustment ex: an
ex: Small grocery work ex: assembly skills ex: outputs ex: Car
airplane
store line hospital, school company
manufacturer
Structure
Machine Professional Divisionalized
Simple Structure - Adhocracy - no
bureaucracy - bureaucracy – form – middle line
CEO distinctions
technostructure operating core managers

10. FEW EXAMPLES
Simple Structure – Sharmaji canteen
Machine bureaucracy – Mc Donald’s
Professional bureaucracy – MDI
Divisionalized form – Godrej
Adhocracy – Intel

11. EXAMPLES FROM CASE STUDIES
Simple Structure – Celestial Seasonings,
Machine bureaucracy – Acme
Professional bureaucracy – Omega
Divisionalized form - ABB
Adhocracy – W.L.Gore and associates

12. SIMPLE STRUCTURE
• Characteristics
• Less standardization, formalization
• Minimal planning, training or liaison
• Very less middle management
• They buy than make
• Advantages
• Lean and flexible
• Operates in dynamic and complex environment

13. • Highly centralized – rapid innovation in simple kind happens
• Not suitable for complex innovation
• Generally young and small
• They often die young because of heavy obsession of its
leaders
• Under severe pressure organizations revert back to this
structure

14. MACHINE BUREAUCRACY
• Off spring of industrialization
• High standardization – low skilled, highly specialized
jobs
• Elaborate administration with many analysts which
in turn leads to horizontal decentralization
• Conflicts out of rigid departmentalization and
hierarchy is required to oversee it

15. • Stable environment or stabilize the environment
around by vertical integration
• Size drives organization to bureaucratize and vice
versa
• Mass production
• External controls encourage bureaucratization and
centralization
• Ex govt agencies

16. • Dull and repetitive work, alienated
employees, obsession with control, massive size and
inadaptability

17. CONCLUSION
A configuration according to the context of the
organization should be chosen but competency that
contrasts its configuration should not be expected