A Comparison offive popular Organization

Design Models

April 2012

Organization Design Models- A comparison

Organization Design is not an exact science. The success of any approach lies in making the design exercise logical and objective.

Over the years, many models have been developed for understanding the various elements of Organization Design. The objective has been to provide a framework to understand the intricacies of organization design.

We present here five most popular models for Organization Design with their benefits and limitations

We hope that knowing the benefits and limitations of each model assists you in making the right choice for designing your organization

Source: Guide to Organisation Design: Creating High-Performing and Adaptable Enterprises By Naomi Stanford, John Wiley& Sons, 2007

McKinsey’s 7S Model

Benefits• Description of important organizational elements.• Recognition of the interaction between the elements.

Limitations• No external environment (input) /throughput /(output) element•No feedback loops•No performance variables.

Published by Waterman & Peters in 1980s, this is the most

commonly accepted model. Its popularity lies in the fact that both hard elements and soft

elements have been considered and their interactions are firmly

established

Galbraith’s Star Model

People

Strategy

Structure

ProcessesRewards

Behavior

Performance Culture

Benefits•Description of important organizational elements•Recognition of the interaction between the elements

Limitations• Does not “call out” some key elements including inputs/outputs culture

Developed by Jay Galbraith in 1960s, the star model is widely

accepted because of the approach that seamlessly links

competitive advantage to strategy to structure , people , lateral processes and reward

mechanisms

Weisbord Six Box Model

PurposeWhat business are we

in?

PurposeWhat business are we

in?Relationships

How do we manage conflict among

people?With technology?

RelationshipsHow do we manage

conflict among people?

With technology?

StructureHow do we divide

up the work?

StructureHow do we divide

up the work?

LeadershipDoes someone keep the

boxes in balance?

LeadershipDoes someone keep the

boxes in balance?

Helpful MechanismHave we adequate co-

ordinating technologies

Helpful MechanismHave we adequate co-

ordinating technologies

RewardsDo all needs tasks have incentives?

RewardsDo all needs tasks have incentives?Environment

Benefits• Includes some diagnostic questions in each box• Requires the purpose to be stated

Limitations• Focus on some elements may lead to overlooking of others

Developed by Marvin Weisbord in the 1970s, this model gives attention to issues such as planning,

incentives and rewards, the role of support functions ,internal competitions among organizational units, and the delegation of authority, organizational control, accountability and performance assessment

Informal Organization

Informal Organization

Formal Organization

Formal Organization

PeoplePeople

WorkWork

Nadler and Tushman’s Congruence Model

Benefits•Easy to follow •Allows for discussion of what comprises informal & formal organizations•Boxes must be congruent with each other

Limitations• Few named elements may lead to wheel spinning or overlooking of crucial aspects.

InputStrategy,

Resources, Environment

InputStrategy,

Resources, Environment

OutputIndividual, team and

organizational performance

OutputIndividual, team and

organizational performance

Developed by David A Nadler and M L Tushman in the early 1980s, the basic

principle of this model is that an organization's performance is derived from four elements: tasks, people, structure, and

culture. The higher the congruence, or compatibility, amongst these elements, the

greater the performance.

Mission & Strategy

Mission & Strategy

StructureStructure

Task requirements and individual

skills

Task requirements and individual

skills

Organization culture

Organization culture

SystemsSystems

Individual needs and values

Individual needs and values

Burke-Litwin Model

Benefits• Includes feedback loops• “Calls out” more qualitative aspects(e.g. motivation)

Limitations• Very detailed • Difficult to grasp at a glance

Developed by Burke & Litwin in 1992, this model shows the various drivers of change and ranks

them in terms of importance. The model is expressed diagrammatically, with the most

important factors featuring at the top. The lower layers become gradually less important.

Individual and Organizational Performance

Individual and Organizational Performance

MotivationMotivation

Work unit Climate

Work unit Climate

Management Practice

Management Practice

LeadershipLeadership

External Environment

External Environment