Organisation Design 101 - Best Practice (PowerPoint PPT Slide Deck)

This PPT slide outlines various organizational structure types that can be adopted based on specific design criteria. It categorizes these structures into 5 distinct types: Functional, Product, Market, Geographical, and Process. Each structure type is briefly described, highlighting its primary characteristics and the contexts in which it is most effective.

The Functional structure is centered around the activities or functions within the organization, such as sales or R&D. This type is typically suited for smaller organizations or those with a single product line. The Product structure, on the other hand, organizes the company by product lines and is designed for efficiency at scale. It emphasizes the importance of product-focused strategies, especially in environments with multiple products targeting different customer segments.

The Market structure is organized around specific markets or customer segments, allowing for rapid adaptation to changing market dynamics. This structure is particularly beneficial for organizations that need to respond quickly to customer demands. The Geographical structure is relevant for companies expanding into new territories, organizing operations based on geographical areas to leverage local advantages.

Lastly, the Process structure is described as the newest organizational design, focusing on workflows and processes rather than traditional functional hierarchies. It aims to streamline operations and reduce cycle times, making it an attractive option for organizations looking to innovate.

Overall, the slide serves as a foundational overview for executives considering how to align their organizational structure with strategic goals. Understanding these types can guide decision-making in designing an effective organizational framework.

An organizational structure is pivotal for aligning various attributes within a company to effectively execute its strategy and realize its vision. This PPT slide illustrates how the organizational structure serves as a central coordinating mechanism that integrates key elements such as people, core capabilities, systems, shared values, and style. Each of these components plays a critical role in ensuring that the organization operates cohesively.

The diagram emphasizes that the organizational structure does not merely exist in isolation; it coordinates the interaction among these elements. For instance, the people within the organization must align with the core capabilities and systems in place. This alignment is essential for the execution of the overarching strategy. The structure also reflects the shared values and style of the organization, indicating that these cultural aspects are integral to how the organization functions.

The arrows labeled "coordinates" and "reflects" suggest a dynamic relationship between the organizational structure and these elements. The structure is both a facilitator and a mirror of the company's ethos and operational approach. This dual role underscores the importance of carefully designing the organizational structure to ensure it supports the strategic goals of the organization.

For potential customers, this slide serves as a reminder that a well-defined organizational structure is not just a framework, but a strategic asset. It can drive performance and foster an environment where all parts of the organization work in harmony towards common objectives. Understanding this relationship can guide leaders in making informed decisions about organizational design and alignment.

This PPT slide titled "Business Definition" outlines a framework for determining how many distinct businesses exist within an organization. It emphasizes the importance of evaluating shared attributes among customers, costs, competitors, and competencies. The left side of the slide presents a scenario where businesses share the same customers, cost structures, competitors, and competencies, leading to the conclusion that they can be classified as "One business."

Conversely, the right side illustrates a scenario where businesses differ in these aspects, suggesting they should be treated as "Separate businesses." The slide effectively communicates that the degree of shared characteristics directly influences the classification of business segments.

The section titled "Why is business definition important?" highlights critical insights. It indicates that understanding whether segments are more profitably operated as a single entity or as separate businesses is essential. This distinction can significantly impact strategic decisions, particularly in contexts like mergers, acquisitions, or market entry strategies.

The slide also points out that defining business segments helps identify what drives profitability within an industry. This understanding serves as a foundation for strategic analysis and informed decision-making.

Overall, the slide presents a structured approach to business classification, offering valuable insights for executives considering organizational design and strategic alignment. It encourages a thorough evaluation of shared characteristics to optimize operational efficiency and profitability.

This PPT slide titled "Principles of Functional Alignment" presents a framework for understanding how organizations can optimize their functional structures. It emphasizes that each organization is unique, and any theoretical application must consider its specific context. The slide is divided into a matrix that categorizes functions based on 2 axes: the potential to combine functions and the skill competency of those functions.

The vertical axis ranges from "High" to "Low" regarding the potential for process sharing and value chain sharing. The horizontal axis similarly ranges from "High" to "Low" in terms of skill competency. This creates 4 quadrants that guide decision-making:

1. High Potential to Combine Functions with High Skill Competency: This area suggests that organizations can benefit significantly from integrating functions, leading to enhanced customer service and shared best practices.

2. High Potential to Combine Functions with Low Skill Competency: Here, organizations may still find value in combining functions,, but they must be cautious about the skill gaps that could hinder effectiveness.

3. Maintain Separate Functions with High Skill Competency: This quadrant indicates that certain functions should remain distinct due to their specialized skills, which may not translate well into a combined structure.

4. Maintain Separate Functions with Low Skill Competency: In this case, the organization may benefit from keeping functions separate, as combining them could lead to inefficiencies.

The slide concludes with key insights on maximizing value through alignment, highlighting the importance of customer focus, internal best practice sharing, and cost management. It also notes that these strategies must operate within risk constraints, particularly regarding the segregation of responsibilities. This framework provides a strategic lens for executives to evaluate their organizational design choices.

The RAID analysis framework delineates the roles of individuals involved in critical decision-making processes. It consists of 4 primary categories: Recommend, Agree, Input, and Decide, each with distinct responsibilities and implications for management structure.

In the "Recommend" section, the emphasis is on the individual or group responsible for making proposals. This role is pivotal, as it accounts for approximately 80% of the work involved in the decision-making process. Proposals are typically approved entirely or in part by the decision-maker, highlighting the importance of this role in shaping outcomes.

The "Agree" role involves individuals who have the capacity to sign off on proposals, but only intervene in exceptional circumstances. Their power is limited, as they can veto a proposal,, but such actions require resolution by the primary decision-maker. This indicates a structured approach to accountability in the decision-making hierarchy.

The "Input" category signifies those who provide consultation on decisions. They are not obligated to have their advice followed, but are expected to challenge and drive excellence in the process. This role is crucial for ensuring diverse perspectives are considered, fostering a more robust decision-making environment.

Finally, the "Decide" role is held by the formal decision-maker, who has the ultimate authority and the power to resolve conflicts among other contributors. This position is characterized by significant time commitments and the necessity for direct reports to manage staff effectively.

Overall, the RAID analysis framework provides a clear structure for understanding roles in decision-making, which can enhance organizational efficiency and clarity in responsibilities.

This PPT slide presents a framework for defining business units based on cost sharing and customer sharing, which are identified as key factors in determining the optimal number of businesses within an organization. The matrix is divided into 4 quadrants, each representing different strategic positions regarding cost sharing and market differentiation.

In the upper left quadrant, it indicates a scenario where a single business can achieve differentiation or occupy a niche position. This suggests that high customer sharing can lead to a unique market offering. The adjacent quadrant emphasizes the potential for cost leadership through separate businesses, indicating that distinct entities may be better suited for cost efficiency.

The lower half of the matrix introduces the concept of separate businesses, which can either operate independently or have the potential for bundling. This implies a strategy where businesses can leverage their distinct offerings while still benefiting from some level of shared resources or customer bases.

The right side of the matrix introduces the idea of substitution, where a single business can offer alternative products or services that may fulfill similar customer needs. This positioning highlights the importance of understanding customer preferences and market dynamics.

An exercise is included, prompting participants to categorize various businesses within the matrix. This practical application encourages critical thinking about where specific products, such as household items and personal care products, fit within the defined strategic framework. Overall, the slide serves as a tool for executives to evaluate their business structures and make informed decisions about organizational design.

This PPT slide outlines a structured approach to organizational design, emphasizing the necessity for alignment with strategic objectives. It is divided into 3 main components: developing strategy, designing vertical structures, and designing horizontal processes.

The first section, "Develop strategy," highlights the importance of formulating a "winning strategy" that is informed by market conditions and the organization's capabilities. This strategy is typically articulated during the annual strategy planning cycle in larger companies. The focus here is on high-level business design to ensure that the organization can effectively execute its strategy and achieve its overarching vision.

Next, the slide moves to "Design vertical structures." This part stresses the need to analyze the internal diversity of the organization, considering factors such as whether it offers single or multiple products or services. It encourages prioritizing key design criteria that will influence departmental structures and selecting the most suitable structure and number of departments based on this analysis.

The final section, "Design horizontal processes," addresses the integration of lateral processes into the vertical structure. This integration is crucial for fostering information sharing, enhancing decision-making capabilities, and ensuring flexibility for future modifications. The emphasis here is on creating a more interconnected organizational framework that supports agility and responsiveness.

Overall, the slide provides a clear roadmap for organizations looking to align their design processes with strategic goals. It underscores the importance of a thoughtful approach to both vertical and horizontal structures to drive effectiveness and adaptability.