Taxonomy of Organizational Design Models and Organizational Performance

Abstract

Organizational design irrespective of a particular operating model attempts to define the relationships among organizational people, jobs, and departments. It is therefore, a matter of grouping of jobs into functions and divisions. To this important extent, organizational structure is the vehicle through which managers can coordinate the activities of the various functions or divisions to fully exploit their skills and capabilities through integration. Organizational design in terms of structure, departmentalization, differentiation and function is central to organizational performance because when people who perform similar jobs are grouped together, they can learn from observing one another and thus become more specialized and can perform at a higher level in the organization. On the other hand, span of management is an important issue in managerial taxonomy because of the need for attention to the ability and capacity of both the physical, mental, psychological, and emotional requirements of both managers and subordinates in the drive for performance. Thus, effective organizational design goes beyond structures, functions or architecture to embrace the organizational culture and philosophy regarding employees and their job requirements. It involves selecting a combination of organizational system, suitable technology, and control mechanisms that are appropriate for an organization to pursue its strategy most effectively and leading to organizational performance, which means overall performance in terms of quality, profitability, employee and customer satisfaction. The literature review technique of the exploratory research design was adopted for this study, and a positive association was found between organizational design and organizational performance. This investigation was not exhaustive mainly due to lack of current relevant literature. Further study could therefore, examine the relationship between Weberian theory of bureaucracy and organizational performance in the changing management world. This study recommends that organizational leadership should encourage free flow of communication in their organizations to enhance organizational performance.