Designing Organizations: Strategy, Structure, and Process at the Business Unit and Enterprise Levels

Designing Organizations: Strategy, Structure, and Process at the Business Unit and Enterprise Levels

Jay R. Galbraith

Language: English

Pages: 352

ISBN: 1118409957

Format: PDF / Kindle (mobi) / ePub

This Third Edition of the groundbreaking book Designing Organizations offers a guide to the process of creating and managing an organization (no matter how complex) that will be positioned to respond effectively and rapidly to customer demands and have the ability to achieve unique competitive advantage. This latest edition includes fresh illustrative examples and references, while the foundation of the book remains the author’s popular and widely used Star Model.

  • Includes a comprehensive explanation of the basics of organization design
  • Outlines a strategic approach to design that is based on the Star Model, a holistic framework for combining strategy, structure, processes, rewards, and people
  • Describes the different types of single-business, functional organizations and focuses on the functional structure and the cross-functional lateral processes that characterize most single-business organizations.
  • Features a special section on the effects of big data on organization design, and whether or not it will result in a new dimension of organizational structure

Highlighting the social technologies used to coordinate work flows, products, and services across the company, this new edition of Designing Organizations brings theory to life with a wealth of examples from such well-known companies as Disney, Nike, IBM, and Rovio (Angry Birds) to show how various kinds of organization designs operate differently.














Strategies Not all single-business strategies are alike. Different singlebusiness strategies lead to different types of functional organizations. Michael Porter (1985) identified two types of business strategies: low cost and differentiation. Using the differentiated strategy, a company pursues low costs but invests in brands, new products, and other features to differentiate the business from competitors. Later, Treacy and Wiersema (1997) described two ways to differentiate a business: customer

enlisting lateral processes, it becomes capable of forming new product teams, customer teams, and process teams for reengineering. The business is therefore flexible, no matter the issue at hand. Lateral processes can also create costs. The decentralized decisions may not be better than those of top management, for example, and the people at the front lines may not have the perspective and experience of top management. These costs can be minimized, however, by making the organization’s total

implementation. In this chapter, we examine a product differentiation strategy where product and other advantages do not last very long. The company uses an organization design that I called “reconfigurable” (Galbraith, 1997). Others have called the design an example of dynamic capabilities (Barreto, 2010) where the company combines and recombines its capabilities to create advantages. The company uses a functional structure as its foundation and then employs extensive lateral processes to

dimension is the central tool underlying this capability. It is the planning and budgeting process for allocating resources across the portfolio of minibusiness units. • External networking with partners to expand the capabilities that can be combined in creating new advantages. The same behavioral skills of cooperation, conflict management, and influence without authority that are used in internal networking are indispensable in managing external networks. The final element is a top management

easy design task—a straightforward box. But the new engineers have to design the whole restaurant by themselves: the structure, the HVAC, plumbing, and electrical systems to meet the building specifications on a challenging schedule. The engineers have to prove that they can become Leonardos. Depending on the company workload and the engineers’ performance, the new engineers may do from one to three of these projects under the supervision of an experienced engineer. This person runs the

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