The “New” Organization

1. The “New” Organization What is driving the changes in strategic design/structure of today’s organization? What are the dimensions of change? Where are we in the “transition” process? Who’s winning? Losing? Key Challenges for the 21st Century … Rapid Technological change Hyper competition Altered work relations New business models Evo S. Hariandja, Industrial Engineering Department, Bina Nusantara University, 2004 D0074-Perancangan dan Pengendalian Organisasi (Organization Design & Control)

2. Changing forms …THE 1990’S Old/Traditional Tall hierarchy Narrow Single job Individual task Rules, standards Job specific First-line manager Top-down Done by manager Specialized function Upward, linear By seniority By grade Fixed Time Low Homogeneous etc. New/Transformed Flat hierarchy Broad Job rotation Teamwork Ongoing learning Broad skills Team facilitator Shared Done by team Team function Lateral, flexible By skills & org needs By results Flexible Initiative High Diverse etc. Organization Job design Job assignment Structure of job Process of work Training Supervision Decision making Scheduling Quality Control Career Paths Promotions Pay Hours Commitment Participation LaborForce etc.

3. Contrasting Organizational Forms • Old Model • Bounded • Hierarchical • Fixed (rules and procedures) • Homogenous • Home-Based • New Model • Networked • Flat • Flexible • Diverse • Global

4. Contrasting Views Of The Corporation Characteristics Organization Focus Style Source of Strength Structure Resources Operations Products Reach Financials Inventories Strategy Leadership Workers Job Expectations Motivation Improvements Quality 20th Century The Pyramid Internal Structured Stability Self-sufficiency Atoms-physical assets Vertical integration Mass production Domestic Quarterly Months Top-down Dogmatic Employees Security To compete Incremental Affordable best 21st Century The Web or Networks External Flexible Change Interdependencies Bits-information Virtual integration Mass customization Global Real-time Hours Bottom-up Inspirational Employees and free agents Personal growth To build Revolutionary No compromise

5. Framework For Taking Action In The New Organization Adapted from Managing for the Future by Deborah Ancona et al, MIT-Sloan School, 2005

6. Framework for Organization Design* Specialization principle Product-market strategies Co-ordination principle Corporate strategy Knowledge & competence principle Organization Design People Control & commitment principle Constraints Innovation & adaptation principle Fit drivers Good design principles *Adapted from Designing Effective Organization by Michael Goold & Andrew Campbell, John Wiley-2002

7. Nine Tests for Organization Design* Specialist cultures test Market advantage test Difficult links test Parenting advantage test Redundant hierarchy test Organization Design People test Accountability test Feasibility test Flexibility test Fit tests Good design tests *Adapted from Designing Effective Organization by Michael Goold & Andrew Campbell, John Wiley-2002

8. A Taxonomy of Unit Roles* *Adapted from Designing Effective Organization by Michael Goold & Andrew Campbell, John Wiley-2002

9. A Taxonomy of Unit Roles* *Adapted from Designing Effective Organization by Michael Goold & Andrew Campbell, John Wiley-2002

10. A New Display Bringing out Different Roles* Overlay unit Parent Business unit Core Resource unit Shared service unit Sub-business Business function Project unit *Adapted from Designing Effective Organization by Michael Goold & Andrew Campbell, John Wiley-2002

11. Making Design Decisions* Define design criteria Proposed New design Take current design Create design concepts and select some for testing Clarify, test, and refine the option Finalize the chosen design *Adapted from Designing Effective Organization by Michael Goold & Andrew Campbell, John Wiley-2002