Organizational Design Article Analysis - Research Paper Example

The Future of Organizational Design The Future of Organizational Design In “The Future of Organizational Design” written by Jay Galbraith (2012), the author predicted that the current trends of organizing at multi-functional levels is leading into an imminent birth of the practice of a new organizational design involving a fifth dimensional matrix called the Big Data. This type of strategic organizational design will be useful in shaping the structure at the enterprise, business unit, region, or functional levels.

The strategic organizational design is based on the philosophy of “structure follows strategy” by Chandler which involves a socio-technical systems approach or a top-up type of design methodology. Over the years, organizations apply the three main phenomena of organizational structure such as the process of concatenation, the law of requisite variety and the enabling of technologies. The first phenomena encompass the constantly swelling complexity and interdependence of organizations as new tactical emphases are being added then incorporates them into their structure.

On the other hand, the law of requisite states that “as the number and variety of relevant entities in the stakeholder environment increases, the number and variety of units inside the enterprise must increase in order to manage these entities.” (Galbraith, 2012, p.3). Big companies evolve from having a single direct sales unit to deal with customers to the creation of multi-market channels to reach customers and various channel partners as these companies advance to mass production and mass market economy.

Lastly, enabling technologies implicates the utilization of modern technology in designing, making and storing products. For instance, product designs saved in software can be downloaded and printed at the point of demand which can take full advantage of customization and reduce expensive supply chains (Rifkin, 2011). The 20th century gave birth to the fourth dimension of organizational design called the Fourth Pillar as large business corporations expanded and organized into the multi-divisional structure.

From the original two-dimensional structure of companies where business units function and report directly to the CEO, global business expansion led to the use of a three-dimensional organization, adding other countries or regions to the equation. Eventually, multi-national firms recognized the need to focus on customers, therefore adding it as well in the organization. IBM and Procter & Gamble exemplify this four pillar structure as global functions, global business units and regions, and global customer units report separately to their CEO.

As companies start to aggregate their independent databases to accommodate the multifunctional matrices of the organization, they would need to gather and combine these databases on a central unit where they can create new and valuable perceptions from numerous data with the help of analytical search engines and algorithms, hence the birth of a fifth dimension called the Big Data. Future organizations will be using additional information-processing capacity through a centralized mechanism that can escalate the capacity of its hierarchy to process more information, as well as through a decentralized interdependence by engaging lateral systems of management.

In addition, resource allocation and priority system will also be improved. Big Data is considered by as the next frontier for innovation, productivity and competition of enterprise organizations. The necessities produced by the development, expansion and competition of business firms dictate the future of strategic organizational design. As companies formulate new ways to innovate their products and services, the functions and scopes of their organizational structure also changes. These variations lead to modifications or additional units to accommodate the demands of the different business and customer channels.

Nevertheless, the future of organizational design responds to the interdependence and continual relationship of increasing complexity shaped by the demands of new and prevailing organization strategies.ReferencesGalbraith, J.R. (2012). The future of organizational design. Journal of Organizational Design. 1(1), 3-6. doi: 10.7146/jod.2012.1.2Rifkin, J. (2011). The third industrial revolution: How lateral power is transforming energy, the economy and the world. New York, NY: Palgrave Macmillan.