The 4 Main Ingredients for Organizational Design

4 INGREDIENTS FOR ORGANIZATIONAL DESIGN

mechanistic structure is needed. Indeed, the organization will be task oriented, considering people only the

meaning to achieve goals and the technological complexity is very high and, therefore, previously

programmed. The main focus of the organization will be exploiting the current resources to implement only

incremental changes.

Moreover, the task orientation of the organization will affect the behavior that people will provide. Since the

organization is a complex setting of diversity, there is a strong need of integration in order to avoid conflicts

and achieve goals faster and more smoothly. Therefore, people will be grouped in different subunits,

according to their capabilities. In this way, the team members have the chance to get to know each other

and slowly integrate their differences through the internalization of certain norms and values that will

coordinate and monitor their behavior. Mutual adjustment becomes, so, the main integrating mechanism.

Nevertheless, they slowly will develop a subunit orientation, the tendency to see one’s role from the time

frame, job and personal interconnection under its own perspective. If the group cohesiveness is very strong

than another drawback might arise: the groupthink. The latter is the set of faulty decision-making that arises

when the group members will discount negative information to arrive a unanimous agreement. This can be

the effect of the internal social network, when people working in a group create a strong friendship which

tend to reduce the overall productivity. The more friends you have around the more you will be concerned

about them, and you’ll tend to reduce your own productivity to align it with one of your friends.

However, in order to protect the organization from the subunit orientation, a CONTROL SYSTEM will be

employed. Control is the process of monitoring activities and their performance, ensuring that their interests

and effort is aligned to the one of the organization. The aim is to achieve the predetermined goals.

Moreover, the diverse control mechanisms affect the motivation and the behavior of people. It is important

to create a fit among people and monitoring, example: giving a performance pay reduces the need of

monitoring directly their actions. Sometimes, direct supervision of top managers can destroy internal values

and norms and worsen performance.

There are 3 mechanisms: market, organization and clan.

Market mechanism controls the market transactions. Complete and short-horizon contrasts can

 be signed.

Organizational mechanism is about the internal control of the organization, monitoring how

 people allocate their effort and how they manage situations.

The clan mechanism is based on the social dimension and it is tied to the high human commitment resource

management. Both are the goal to create a culture that emphasises cooperation and collaboration, based on

trust and deep involvement. A manager, in order to create a clan, has to analyse the abilities and the

experiences of people.

To accomplish this task, it’s necessary the use of the economy of specialization, based on the cluster analysis.

This method is used to group people according to their similar CAPABILITIES, SKILLS AND KNOWELDGE.

Moreover, managers have 3 methods to study the “internal availability of competences”:

1. Stock of competences

2. Learn the effect of organizational tasks on people’s abilities

3. Combinative capabilities: these are all available intangible resources that an organization has. It must

be able to create strong fits among people’s abilities and organizational technology, exploiting the

result of the combination.

This analysis is called Zero Base Review framework, a study that uses the bottom-up strategy. Indeed, it

starts mapping all the activities inside the organization for them arriving to the organizational structure, by

studying the interdependences among activities in order to group the ones that are share the have the same