Does The Ideal Organizational Structure Change Over Time?
In 2017, business is competitive as ever and a changing consumer base as well as other factors have pushed companies to start prioritizing the design of their organization to maximize efficiency and stay competitive in the market.
So what exactly is organization design? According to Mark LaScola, founder of a global boutique consultancy, organization design is “[t]he deliberate process of configuring the informal and formal elements of a business, including value stream, structure, technologies, management mechanisms and systems, rewards, and people processes, to create a business capable of achieving its business strategy.” In order for a business to stay competitive, LaScola implies that these are the key elements that must be addressed when the business is organizing itself.
Almost all of the elements LaScola brings up are part of Galbraith’s Star Model of organizational design that was developed back in the 1960s. Specifically, Galbraith’s model references strategy, structure, business processes, reward systems, and human resource management as a path to an effective strategy for a company — all of which were encompassed within LaScola’s statement.
Especially considering how volatile the business environment is, do elements of an ideal organizational design change, or do they remain consistent over time as shown by LaScola and Galbraith’s similar theories? Is it appropriate to keep using Galbraith’s popular Star Model even though it was developed almost 50 years ago? Is it possible for companies to keep using the same organizational structure or must it constantly be shifting to stay competitive in today’s business landscape?