7LD01 Organisational Design and Development

Business success depends on an organization’s management being effective. The success of your company can be significantly impacted in the long run by influencing organizational structure and behaviour with the appropriate people development strategies, but doing so requires knowledge of the various options available, which this course will provide.

This course will teach you

To comprehend the underlying general principles and important issues that support organizational design and development, you will critically evaluate theory and concepts in this area. The purpose and importance of organizational design and development will be discussed, along with its justification and complexity. A variety of organizational forms will be taken into consideration, and their contextual relevance will be discussed. Additionally, you will gain knowledge of various organizational development strategies and approaches, as well as how these relate to the objectives of the organization. You will also look into how human resources specialists contribute to the development of new organizational structures. Last but not least, you’ll look at ways to deal with change, including tactics for motivating employees and self-reflection on the traits and behaviours that contribute to successful implementation.

 It is suitable for those who:

• are professionals with experience
• are employed in a senior people practice position and want to hone and broaden their knowledge and abilities to influence strategy, policy, and people
• desire to influence people’s behaviour in a way that benefits a larger audience
• presently overseeing and managing practices and people in organizations

Learning outcomes

After finishing this lesson, students will be able to:

• Recognize the ideas and theories that underpin the creation and development of organizations.
• Recognize the variety of organizational design options and how they relate to the goals and objectives of the organization.
• Understanding organizational development techniques and strategies will help organizations achieve their objectives.
• Recognize organizational change responses and implementation strategies for a successful change.

Task 1

AC 1.1 Critically evaluate the theoretical basis of organisational design and development.

The assumption that people are rational and capable of making decisions that will result in the most effective organization forms the theoretical foundation of organizational design and development. Behavioural scientists have contested this theory, claiming that people are not always logical and frequently base their decisions on habit or emotion.

A number of organizational design models, including the Weber-Fayol model, the human relations model, and the open system model, have been developed using the rational choice theory. There is no one model that works perfectly for all organizations; each of these models has its advantages and disadvantages. The most successful organizations will be built on a blend of various models that take into account the particular requirements of the organization and its staff.

Based on the idea that people are not always logical and frequently base their decisions on habit or emotion, the behaviourist approach to organizational design and development. Many models, including the path-goal theory, the expectancy theory, and the equity theory, have been developed using this theory. These theories place a strong emphasis on the role that leadership, motivation, and communication play in the creation and growth of successful organizations.

AC 1.2 Examine the rationale for organisational design and development.

The process of creating and enhancing organizational structures and systems to better meet the needs and objectives of the organization is known as organizational design and development. There are many different reasons why businesses might decide to launch redesign or development initiatives. Some of the most prevalent ones are as follows:

• Improving efficiency or effectiveness: Organizational structures and systems that are outdated or no longer fit well with the company’s current strategic objectives can hamper efforts to be as efficient or effective as possible. The redesign can help to resolve such issues.
• Aligning with a new strategy: An organization’s organizational structure should change as its strategy does. An organization is not well aligned and is more likely to run into problems if it is going in a new direction while keeping its current organizational structure.
• Adapting to change: Organizational structures and systems must be able to change in response to alterations in the external environment, such as the introduction of new technologies or new laws. If they can’t, the company might be at a disadvantage.
• Dealing with growth: A company that is expanding quickly may find that its current structure is inadequate to support the expanded size and scope of the company. These problems may be addressed through a redesign.

AC 1.3 Evaluate the value and impact of organisational design and development.

Organizations can better understand who they are, how they function, and where they can make improvements with the aid of organizational design and development. It aids people in organizations in recognizing their roles and responsibilities and in coordinating their efforts with organizational objectives. When done correctly, organizational design and development can result in higher productivity, efficiency, and effectiveness. Yes, investing in high-quality organizational design and development is expensive, but the benefits can be significant. Being able to adapt quickly is essential for success in today’s business environment, which is constantly changing. To stay ahead of the curve, an increasing number of organizations are turning to experts in organizational design and development.

AC 1.4 Evaluate key contextual variables and limitations that impact organisational design and development.

The study of organizational structure and change is known as organizational design and development (OD&D). It covers both the macro-level and the micro-level, or specific organizations (i.e. the wider socio-economic context).

In addition to these ideas, there are a few significant contextual constraints and variables that affect OD&D. These consist of:

• The social and political climate
• The judicial and regulatory landscape
• Social and societal developments
• technological evolution
• Globalisation

Depending on the particular organization or context, every one of these factors has a different impact on OD&D. For instance, the design of multinational corporations is likely to be affected by globalization more than the design of small, local businesses.

When creating or developing an organization, it is crucial to take these contextual factors and constraints into account because they may have a big impact on the organization’s success.

AC 1.5 Critically appraise the contribution of cross-functional activity and stakeholder management in organisational design and development.

A crucial element of OD&D is a cross-functional activity because it guarantees that all stakeholders are taken into account and involved in the process. Stakeholder management, which guarantees that their needs are taken into account and that they are kept updated on progress, is also essential to the success of OD&D.

Improved performance, greater efficiency, and increased adaptability to change are all advantages of effective OD&D. But it’s crucial to keep in mind that OD&D is a challenging process, and success requires careful preparation and execution. In conclusion, successful organizational design and development depend on cross-functional collaboration and stakeholder management.

Task 2

AC 2.1 Critically evaluate the range of different organisational forms.

There are many different organizational structures, each with advantages and drawbacks of their own. Matrix, flat, and hierarchical structures are the most prevalent types.

1. Top-down management is a characteristic of hierarchical structures, in which decisions are made at the top of an organization and communicated to those at the bottom. Large organizations are more likely to have this kind of structure because they require strong chains of command and distinct lines of authority. In terms of decision-making, hierarchical structures can be very effective, but they can also be rigid and slow to change.
2. Flat organizational structures have a low level of bureaucracy and few levels of management. Small businesses and start-ups frequently prefer this type of structure because it can be more adaptable and responsive to change. However, flat organizational structures can also result in less effective decision-making and occasionally cause confusion regarding who is in charge of what.
3. A hybrid of flat and hierarchical structures, matrix structures combine aspects of both. This kind of structure is frequently found in big businesses with intricate operations. In terms of coordination and communication, matrix structures can be very effective, but they can also be quite confusing and challenging to manage.

AC 2.2 Critically discuss organisational design options within a given context.

When it comes to organizational design, there are many options available, and the best choice for any given organization will depend on its unique goals and objectives. Options for an organizational design that are frequently used include matrix, functional, divisional, and networked structures. Every one of these designs has advantages and disadvantages, so it’s crucial to carefully consider which is best for the organization in question.

Making sure the structure selected is in line with the organization’s goals and objectives is among the most crucial aspects of organizational design. For instance, a functional structure might be the best choice if an organization wants to boost productivity. On the other hand, a more matrix-based structure might be more suitable if the organization’s objective is to foster creativity and innovation. When selecting a design, it is also crucial to consider the particular context in which the organization operates because this can have a big impact on which option is best. For instance, a more centralized structure may be required if an organization works in a highly regulated sector in order to comply with rules.

The effects on employees should be taken into account when choosing an organizational design. For instance, a matrix structure can be confusing and complex, whereas a functional structure may make employees feel isolated and disconnected from other parts of the organization.

AC 2.3 Compare the different approaches to implementing organisational design options.

Three main methods can be used when designing an organization:

1) Structural: This method focuses on the hierarchical structure of the organization and examines how to formalize and standardize workflows, decision-making procedures, and communication channels.

2) Behavioural: This strategy looks for ways to enhance team dynamics, cooperation, and communication within the organization by focusing on how people interact with one another.

3) The third approach is process-based, which focuses on how work moves through an organization and looks for ways to increase effectiveness and efficiency by streamlining process steps and eliminating waste.

4) You must select ONE of the three aforementioned approaches for this assignment and use it in the case study organization.

You should take into account the following when putting your chosen strategy into practice:

• The particular organizational goals and objectives that your design will aid in achieving.
• the tools necessary for implementation (e.g. time, money, people).
• the hazards of implementation and methods for reducing them.
• the implementation schedule.

5) You must write a report outlining your selected strategy and arguing why it is best for the case study organization. A thorough implementation plan that outlines the steps that must be taken, who will be in charge of each step, and the resources needed should also be included in your report.

AC 2.4 Examine the implications of organisation design for the creation of high-performance work systems.

There are a few important factors that must be considered when designing an organization in order to develop a high-performance work system.

The organization must first and foremost be able to quickly adapt to changes in the environment or market. This calls for it to be adaptable and capable of making quick decisions in order to meet changing demands.

Second, the organization’s structure needs to promote creativity and innovation. As a result, workers must be free to try new things and experiment without worrying about getting caught or facing consequences.

The organization must also be able to strike a balance between flexibility and efficiency. It must therefore find a way to complete tasks quickly and effectively without compromising its ability to alter course when necessary.

Organizations that can check off all of these requirements frequently outperform their rivals and can sustain a high level of performance over time. These are the most important considerations you need to make if you want to design a high-performance work system.

Task 3

AC 3.1 Investigate different approaches to organisational development.

Organizational development can be approached in a variety of ways, and each one has benefits and drawbacks of its own. Typical strategies include:

1. TOP-DOWN APPROACH: The top-down approach to organizational development entails creating a strategy or plan at the executive level and cascading it down to all other levels of the organization. In organizations with a clear hierarchy, like the military or the government, this strategy is frequently applied.
2. BOTTOM-UP APPROACH: The bottom-up method of organizational development involves involving staff members at all organizational levels in the formulation and execution of plans. This strategy is frequently applied in businesses where participation and employee empowerment are highly valued.
3. OUTSIDE-IN APPROACH: The outside-in method of organizational development entails enlisting the aid of outside specialists in the formulation of a plan or strategy. When an organization needs a new perspective or has few internal resources, this strategy is frequently used.
4. INSIDE-OUT APPROACH: The inside-out strategy for organizational development entails creating an internal plan or strategy before putting it into action externally. In organizations where there is a need for speed or where there is a lot of uncertainty, this strategy is frequently used.

AC 3.2 Assess the impact that the drivers for change have on the choice of transformation strategies.

The decision on the transformation strategy can be influenced by a variety of different forces for change, such as:

• Economic factors: such as market fluctuations, inflation, or the recession
• social factors: changes in social attitudes or demographics, for example
• technological factors, such as changes in customer communication patterns or technological advancements
• political factors: such as modifications to laws or regulations
• environmental factors: such as natural disasters or climate change

The decision on the transformation strategy may be influenced by each of these change agents in unique ways. For instance, if a company’s sales are declining, it may need to implement a cost-cutting strategy in order to survive. Alternatively, a company may need to adopt a growth strategy if it wants to enter new markets.

AC 3.3 Assess the value of sources of evidence and data that support organisational development choices.

Organizational development (OD) is a process that enables organizations to perform better and accomplish their desired objectives. It involves the application of a variety of strategies and techniques, including change management, process improvement, human resource management, and leadership development.

Evidence and data from a variety of sources can be used to back organizational development decisions. These consist of case studies, focus groups, interviews, surveys, and research studies. There are benefits and drawbacks to each of these sources, so it’s critical to pick the one that works best for your particular circumstance.

The validity and dependability of a source of information are two of the most crucial factors to take into account. Validity refers to how appropriate and significant the data is, whereas reliability refers to how accurate and consistent it is. The impartiality of the source is another crucial factor to take into account. This implies that it shouldn’t be biased in any way and should present a balanced and accurate picture of the circumstances.

You will be able to select the best source of evidence or data to support your organizational development decisions once you have taken into account all of these factors.

Task 4

AC 4.1 Discuss the challenges faced by practitioners when trying to adopt holistic approaches to organisational development.

When attempting to adopt holistic approaches to organizational development, practitioners of organizational development frequently run into difficulties. This is due to the fact that many organizations are resistant to change and may not be prepared to devote the time and money necessary to put a holistic approach into practice.

To ensure that the organization’s objectives are achieved, practitioners also need to have a solid grasp of organizational dynamics and be able to communicate effectively with all stakeholders.

Last but not least, a holistic approach necessitates extensive coordination and planning, which can be challenging to accomplish in big, complex organizations.

AC 4.2 Examine the affective, behavioural and cognitive reactions to organisational change.

When changes are made in an organization, many people react negatively. They might experience fear for the future, resentment over how the change is being handled, or just resistance to anything that alters their daily routine. Understanding these responses and how they may affect a change initiative’s success is crucial.

Emotions like fear, rage, or happiness are examples of affective reactions. These may have an effect on how people feel and act during a change. For instance, a fearful person might be less willing to experiment or take chances. An angry person might attack others or sabotage the change process.

The actions people take in response to a change are known as behavioural reactions. Increased absenteeism, decreased productivity, or resistance to new policies and procedures are a few examples of this.

Cognitive reactions are people’s ideas and preconceptions about change. This may entail having the opinion that the change is unneeded or that it won’t be effective.

To effectively manage a change, it is critical to comprehend how people will likely respond to it. By explaining the need for change, including people in the decision-making process, and offering support during the transition, resistance can be overcome.

AC 4.3 Examine strategies for building employee engagement.

Organizations constantly change in order to stay successful and competitive. Employee disengagement can occur when employees find it difficult to deal with change. Therefore, it is crucial for organizations to put strategies in place to guarantee that workers stay engaged during times of change.

Making sure that workers feel involved in the change process is one way to achieve this. This can be accomplished by regularly and openly discussing the changes that are being made with the workforce and requesting their opinions.

Giving employees support and training to help them feel prepared to handle the changes is another tactic.

Finally, it’s critical to thank and honour staff members for their efforts during times of change. By doing this, organizations can develop an engagement culture that will support effective change.

AC 4.4 Justify the skills and behaviours that influence successful implementation.

A variety of abilities and attitudes play a role in the effective implementation of organizational change. These consist of:

• Effective communication is essential for ensuring that everyone involved in the change process is aware of the objectives and goals and is aware of their part in achieving those goals.
• Stakeholder management: It’s crucial to make sure that all parties involved in the process are on board with the change. This entails being aware of and attending to their needs and worries throughout the implementation.
• Change management: Ensuring that the implementation is successful requires a solid change management strategy. This entails preparing for the change, dealing with opposition, and keeping track of advancement.
• Effective project management is crucial to ensuring that the change is implemented on time and within budget, just like it is for any project.
• Strong leadership is required to guide the organization through the change and make sure that workers are inspired and involved at all times.

Related Articles:

CIPD Level 7