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Do you have a well-designed organization?

Michael Goold, Andrew Campbell

    Harvard Business Review
    |March 16, 2002
    PubMed
    Summary
    This summary is machine-generated.

    This study introduces a nine-test framework for evaluating and creating effective organization designs. It helps executives identify and address issues in their company structures for better performance.

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    Area of Science:

    • Business Strategy
    • Organizational Design
    • Management Science

    Background:

    • Organizational structures often evolve organically, influenced by internal politics rather than strategic planning.
    • Executives frequently recognize suboptimal organization designs but lack a systematic approach for improvement.

    Purpose of the Study:

    • To provide a practical framework for evaluating and creating effective organization designs.
    • To equip executives with actionable tests for assessing and refining organizational structures.

    Main Methods:

    • Introduction of a nine-test framework for organization design evaluation and creation.
    • Four initial 'fit' tests: market advantage, parenting advantage, people, and feasibility.
    • Five 'good design' tests: specialist cultures, difficult-links, redundant-hierarchy, accountability, and flexibility.

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    Main Results:

    • The framework offers a structured approach to diagnose and improve organizational design.
    • The nine tests cover critical aspects from competitive advantage to adaptability.
    • Repeated application of tests is recommended to manage complex interdependencies.

    Conclusions:

    • A systematic, test-based approach can overcome the challenges of organization design.
    • This framework empowers leaders to make informed decisions for better organizational functioning.
    • Effective organization design requires continuous evaluation and adaptation to ensure alignment with business goals.