Organizational design models detail how a company organizes the individuals and operations within its facilities. Many different types of design models exist, with companies selecting whichever one works best for them. The different organizational design models often start with either a flat or tall structure. Then, the organization can use a design model to create specific departments within the company to accomplish activities. Owners and executives tend to drive this process in most cases, though a bottom-to-top approach may occur.
Flat organizations usually have few management layers. Companies use these organizational design models to encourage employees to take on more responsibility. A flat structure can also prevent micromanagement, with fewer managers able to control an employee’s specific actions. Owners and executives can also keep their fingers on the pulse of the company as fewer levels exist between them and the frontline workers. When left without proper supervision, however, these companies can become ineffective.
Tall organizations have many more levels of management when compared to flat organizations. More management allows for better control, though more bureaucracy is a side effect. This prevents a company from working smoothly at times as lower-level employees have to wait for certain decisions from upper management. These organizational models also have more tendencies for micromanagement if the owner allows managers to be directly involved in daily activities. The inclusion of more management positions can also increase costs to the organization.
A company often stresses three important attributes in organizational design models: excellence, people, and communication. Excellence means that poor quality or workmanship is not acceptable in a process. A focus on people helps a company work together better by creating strong relationships among workers. Communication is necessary to inform all workers about various activities in the company. In most cases, companies can experience one or all of these at some level in design processes.
Companies must also put together strong processes for implementing organizational design. Having a repeatable activity ensures that all design processes follow the same steps to success. Steps can include setting the stage, gathering data, designing the transformation, and implementing and evaluating the process. Each stage includes a different set of knowledge, skills, and abilities for completion in the best manner possible. While a company may use only internal staff, external agencies can help put together these organizational design models if necessary.