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

This PPT slide outlines 5 organizational structure types: Functional, Product, Market, Geographical, and Process. The Functional structure focuses on activities like sales or R&D, suitable for smaller organizations or single product lines. The Product structure organizes by product lines for efficiency, emphasizing product-focused strategies in multi-product environments. The Market structure adapts to specific customer segments, enabling rapid response to market dynamics. The Geographical structure organizes operations based on regions, leveraging local advantages during expansion. The Process structure prioritizes workflows over traditional hierarchies, streamlining operations and reducing cycle times, appealing to innovative organizations.

An effective organizational structure aligns key elements such as people, core capabilities, systems, shared values, and style to execute strategy and realize vision. It serves as a central coordinating mechanism that integrates these components, ensuring cohesive operations. The structure coordinates interactions among these elements, requiring alignment between people and core capabilities for successful strategy execution. Additionally, it reflects the organization's shared values and style, indicating the importance of cultural aspects in functionality. The arrows labeled "coordinates" and "reflects" illustrate the dynamic relationship between organizational structure and these elements, emphasizing its role as both a facilitator and a mirror of the company's ethos. A well-defined organizational structure is a strategic asset that drives performance and fosters harmony towards common objectives, guiding leaders in organizational design and alignment decisions.

This PPT slide presents the "Principles of Functional Alignment" framework for optimizing organizational structures. It features a matrix with 2 axes: potential to combine functions and skill competency. The vertical axis ranges from "High" to "Low" for process and value chain sharing, while the horizontal axis indicates skill competency. The matrix creates 4 quadrants: 1. High potential to combine functions with high skill competency, suggesting significant benefits from integration. 2. High potential to combine functions with low skill competency, indicating caution due to skill gaps. 3. Maintain separate functions with high skill competency, emphasizing the need for specialized skills. 4. Maintain separate functions with low skill competency to avoid inefficiencies. Key insights include maximizing value through alignment, customer focus, best practice sharing, and cost management within risk constraints.

This PPT slide outlines a framework for classifying distinct businesses within an organization based on shared attributes among customers, costs, competitors, and competencies. When businesses share these characteristics, they can be classified as "One business." Conversely, differing attributes suggest they should be treated as "Separate businesses." The degree of shared characteristics influences business segment classification. Understanding whether segments should operate as a single entity or separately is critical for strategic decisions, particularly in mergers, acquisitions, or market entry strategies. Defining business segments also helps identify profitability drivers within an industry, serving as a foundation for strategic analysis and informed decision-making.

This PPT slide presents a framework for defining business units based on cost sharing and customer sharing, key factors in determining the optimal number of businesses within an organization. The matrix is divided into 4 quadrants representing different strategic positions regarding cost sharing and market differentiation. The upper left quadrant indicates that high customer sharing can lead to differentiation or niche positioning. The adjacent quadrant highlights the potential for cost leadership through separate businesses for cost efficiency. The lower half introduces separate businesses that can operate independently or bundle offerings while sharing resources. The right side discusses substitution, where a single business offers alternative products to meet similar customer needs. An exercise prompts participants to categorize various businesses within the matrix, fostering critical thinking about product positioning within this strategic framework.

The RAID analysis framework defines roles in decision-making with 4 categories: Recommend, Agree, Input, and Decide. The "Recommend" role is responsible for proposals, accounting for approximately 80% of the decision-making process. The "Agree" role can sign off on proposals, but only intervenes in exceptional cases, requiring resolution by the primary decision-maker, thus ensuring accountability. The "Input" category includes individuals providing consultation, expected to challenge decisions and enhance the process by incorporating diverse perspectives. The "Decide" role is held by the formal decision-maker, who resolves conflicts and manages staff, emphasizing the importance of authority and time commitment. The RAID framework clarifies decision-making roles, enhancing organizational efficiency and responsibility.

This PPT slide outlines a structured approach to organizational design, focusing on alignment with strategic objectives. It includes 3 components: developing strategy, designing vertical structures, and designing horizontal processes. "Develop strategy" emphasizes formulating a "winning strategy" based on market conditions and organizational capabilities, typically during the annual strategy planning cycle. "Design vertical structures" analyzes internal diversity, considering single versus multiple products or services, and prioritizes key design criteria to determine suitable departmental structures. "Design horizontal processes" integrates lateral processes into the vertical structure, fostering information sharing, enhancing decision-making, and ensuring organizational flexibility. This interconnected framework supports agility and responsiveness, aligning design processes with strategic goals.