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The Roles of Organization Design in Proper Business Management

Organization design is a process of creating roles and designing reporting relationships in an organization. It is a guided process that integrates people and technology within the organization management and is aimed at improving the collective responsibility in the handling of duties thus ensuring success in achieving set objectives (Roberts, 2008). The management and other workers design the organization goals after which teams are created to ensure the set objectives are all achieved. The teams are required to follow systematic procedures and critically analyze the environmental factors that would hinder the accomplishment of the set goals.

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Principles of setting organization design

The organization design is based on the hierarchical principle. In this concept, organizations are managed through a bureaucratic system in which duties, authorities, and responsibilities are passed downwards. The organization’s policies are passed from the top management to the subordinates under the guidance of departmental heads who supervise different activities at every level in the organization. The principle encourages specialization as workers are assigned responsibilities in areas where they own technical skills such as sales, accounting, and event production. Every employee within the organization reports to the higher authority in the hierarchy. However, the principal faces many challenges such as oppression of workers in lower ranks hence low morale in accomplishing the set goals. These factors arise due to putting different workers from different cultural backgrounds together to achieve common goals as the differences might hinder the organizational work ethics and workers’ commitment to achieving the set goals.

The design process

The process begins with strategy creation which involves the establishment of guidelines to accomplish the set organization goals. The management derives strategy from the organization’s mission and vision as well as statements of purpose which defines the organization’s philosophy of existence (Roberts, 2008). The strategy enhances unity within the organization by enabling stakeholders to work towards achieving the set organization goals. After this, workers are grouped and assigned responsibilities to accomplish within a specific period and ensuring that every objective is achieved.

Roles of organizational design

Organizational design plays a major role in achieving the set objectives of an organization. It helps the stakeholders to concentrate their efforts towards attaining the organizational objectives by specializing in activities they are well suited to and those that would ensure prosperity and customer loyalty. First, it promotes innovation within the organization. Innovation entails the successful introduction of new methods of carrying out activities within an organization that is meant to add value to the product already in the market (Mackernzie, 1986). It includes the synthesis of knowledge from the original concept to add relevant value to the new products of the organization. Due to greater specialization in various organizations, workers are assigned duties in departments they are well suited to due to their skills and experience. As a result, they can create new ideas that would ensure the achievement of the goals and objectives. Similarly, they can create new ideas on the best production methods, product branding systems, and even best methods to market their products. These inventions are brought about by changes in technology and are later put into operation under the guidance of the manager who ensures their full implementation for the sake of future prosperity according to the mission, vision, and direction (Burton, 2006). The inventions enable the organization to withstand the challenges brought about by stiff market competition that might make it lose brand loyalty.

Promotion of social responsibility

Business organizations are endowed with various responsibilities within the organization itself and society. Organization design ensures these responsibilities are achieved by assigning every stakeholder his/her duties to accomplish in an effort the meet the set goals and maximization of the organization’s values. The design ensures that the organization maximizes the shareholder’s revenue by rising beyond the environmental barriers and ensuring workers are paid their dues promptly to motivate them towards achieving the organization’s goals. In enhancing social responsibility, the design encourages the employment of the society members into the organization, improving public image through accepting consumer associations, charging acceptable prices on their products, and ensuring maximum use of resources to avoid wastage (Mackernzie, 1986). These strategies enable the organization to operate in a friendly environment in which both the society members and the organization enjoy using the products thus increase in sales of the organization’s productivity.

Ensuring improved product quality

Organization design enables the business to make proper use of the Six Sigma technique. This technique ensures effective communication between customers, shareholders, and even employees. It ensures improved production methodology and aims at eliminating defects and inefficiency in production by indicating performance level that culminates in reliability and value addition to the services rendered to customers. Since the design ensures specialization according to skills possessed by workers, they can put much effort into areas such as production, sales, and finance among others (Roberts, 2008). As a result, departments associated with production and customer services can undertake research activities towards high-quality production of goods and services that ensure customer satisfaction. Similarly, they can undertake blending and branding of the organization products thus assuring the consumers of high-quality products and easy identification of products hence the organization can compete effectively in the market.

Improvement in the quality of management

A properly designed structure of workers’ responsibilities and well-defined reporting techniques are essential in improving the quality of management in an organization. Managers are considered the role models in any organization as workers tend to copy their commitments towards achieving the organization’s goals (Burton, 2006). Organization design through specialization ensures that the duties of top management are not pegged on issues such outside the organization but rather on general supervisory of activities going on within an organization. As a result, the management has to establish proper evaluation and reward systems for workers who commit themselves most towards the achievement of organization goals. The rewarded workers get motivated and work harder towards retaining the reward that could be monetary or not. This promotes the spirit of hard work and full commitment to the organization’s duties among workers as they compete against each other in meeting organizational goals. As a result, accountability, transparency, and loyalty to the organization are encouraged leading to profit maximization.

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Proper utilization of organizations assets

An organization’s assets are for its own needs. These assets include business strategies, organization data, organization’s confidential information, equipment, employee time, and vehicles among others. The strategic design ensures maximum utilization of these assets as well as frequent renovation to ensure continuity in organization activities (Burton, 2006). The management has the responsibility to protect the organization’s assets from vandalism and ensures that the assets such as equipment and vehicles are used for valid organization purposes. Through the clear separation of duties and responsibilities, organization design enables workers to protect every asset in their departments as this reduces expenses on repair costs and channels the money to other duties.

Encouraging financial management and investment

For an organization to achieve its goals there must be financial stability. The finance department must keep records of expenses incurred within a given period of operation while implementing the organization’s goals. The design promotes accountability over the use of organizational resources such as finance by ensuring that every department accounts for its expenses at the end of the financial period. Also, the design provides for the investment of extra capital in the stock market (Mackernzie, 1986). The remaining capitals are sold to the public in terms of shares during the Initial Public Offer (IPO) and are used to measure the country’s economic development. The design, therefore, allows for accountability in financial handling leading to expansion in a business capacity.

Organizational design is therefore the major determinant of the prosperity of any organization. This is because it incorporates skilled workers whose ideas are shared all over the organization and assigns individuals to implement the various policies created by them( Burton, 2006). The design also promotes the incorporation of technology into the management and production systems thus enabling companies to produce high-quality goods and services to satisfy customer needs hence prosperity of the organization.


Burton, R. (2006).Organizational design: a step-by-step approach.Cambridge: Cambridge University press.

Mackernzie, K. (1986).Organizational design: the organizational audit and analysis technology, Communication and information science. New York: Ablex Publishers Corporation.

Roberts, J. (2008).The Modern Firm: Organizational Design for Performance and Growth. United Kingdom: Oxford University Press.

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