Key Concepts of Organizational Design

1869 WordsAug 2, 20108 Pages
Running head: KEY CONCEPTS OF ORGANIZATIONAL DESIGN Key Concepts of Organizational Design Creativity, Innovation, and Organizational Design Key Concepts of Organizational Design An important part of organizational theory is organizational design. It is important to change management within the organization and shapes the organization’s culture, leading toward the achievement of reaching its goals. Organizational design becomes more complex as the company experiences growth. In this paper, I will provide some key concepts of organizational design and its importance, assessing the relationships between strategy, structure, and process in organizations and the relationship between organization design and decision-making…show more content…
170), “Multidivisional structure is a structure in which support functions are placed in self-contained divisions.” Self-contained division is “a division that has its own set of support functions and controls its own value-creation activities.” A multidivisional structure can provide large organizations with several advantages to include increased effectiveness within the organization, more control, and growth. Like other structures, certain problems are associated with multidivisional structures, though most can be controlled, they cannot be eliminated. Some disadvantages of a multidivisional structure are communication problems, the relationships between corporate and division, transfer pricing, divisional coordination problems, and bureaucratic costs. A geographic divisional structure is available when control problems are a function of geography. Geographic Divisional Structure Jones (2004, p. 179) describes Geographic Divisional Structure as “a divisional structure in which divisions are organized according to the requirements of the different locations in which an organization operates.” A geographic structure is effective when organizations experience growth to a national level from a local market. Galbraith, (2002, p. 36) states the kinds of strategies executed best by this basic structure as: ← Low value-to-transport cost ratio ← Service delivery on site ← Closeness to customer for delivery or support ←

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