W02- Academic Article

An article written by E. Craig McGee and Kathy Molloy entitled, “Getting Results Through Organization Design,” (2003) illustrates how to determine when organizational redesign is needed and how to achieve redesign. The article begins with a fictional CEO of a fictional company in a scenario that may be familiar for many of today’s leading companies. The article stresses that flexibility is key to organizational design, especially in the scenario given. Throughout the article, the authors select areas of the company and explain how the area could benefit from a new design. The authors also provide important elements that may signal a need for redesign.   Below is the fictional case example provided by McGee and Molloy:

“Jack Clausen, CEO of GreatSnack, Inc., a 45 year-old mid-size snack-food company, has just learned that his company has been replaced as the top performer in sales and market share in the industry, a position his company has held for the last 5 years. What is worse, the challenging company, ReadySnack, is a relative “upstart”, having entered the market only 3 years ago! While Jack knew that GreatSnack was seeing some decline in a couple of key sectors, Jack thought, along with other experts, that sales would rebound as the economy improved. Instead, ReadySnack had achieved gains no one thought possible by way of leveraging its current distribution network into new market niches and the rapid introduction of new products. Jack had been meeting with his senior team all day trying to understand the roots of this troubling situation, and determine an effective strategy.”

While the authors provide specific points to redesign an organization they do not apply an exact theory as described in the week’s readings. Each of the readings discussed the different types of organizational design. Whether it is a centralized system, decentralized system, organization as an organism or the star model, there are many different ways to organize an organization.  McGee and Molloy (2003) did not present a clear, concise solution to the case example but rather provided a roadmap to follow. 

McGee and Molloy (2003) reference a study in which four important elements for management practices were identified. The elements were identified as strategy, culture, structure and execution.  These four elements are similar to the five components of Jay Galbraith’s “Star Model.”   Culture replaces people and rewards, while execution replaces processes. These elements are the main areas in an organization that require attention when focusing on organization design or redesign.  Each of these elements needs to be able to collaborate with the other in order to achieve a flexible organization, hence the reason for Galbraith’s “Star Model.”

Gareth Morgan describes organizations as organisms which allows for a scientific look at organizational design. This theory would indeed help the fictional case example presented earlier. Had the fictional CEO Jack kept this theory in mind, he would know that his company constantly needed to grow and develop. The company had been using the same theories and practices that had been in place in the nineties. While the old saying “If it isn’t broken, don’t fix it,” may apply in some instances, it certainly does not belong in business. Organizations need to be prepared for change at all times. This is where the importance of cross-training becomes a necessity. By ensuring that each department has knowledge of the way the other departments work, the need for change can be seen sooner rather than later.

Overall, change is something that is inevitable. There is no way to predict the changes that can occur in the business world. However, by implementing a clear organizational design early on, an organization can be prepared to incorporate this change quickly. The Star Model allows for flexibility. The fictional CEO, Jack, could implement a theory and prepare for future changes. By preparing for future changes, Jack would be able to stay at the top and foresee the moves of his competitors by developing the very procedures and products that they are. The key in organizational design is to remain flexible and to always be prepared for change.

References:

Galbraith., J.R. (2011). The Star Model, pp. 1-6

Galbraith, J.R. (2002). Designing Organizations, pp. 73-90

McGee, C., & Molloy, K. Getting results through organization design, Creating High Performance Organizations, 2008

Morgan, G. (1998). Images of Organizations: Executive Edition, pp. 35-67

Worley, C. & Lawler, E. (2006). Designing Organizations that are built for change, MIT Sloan Management Review, 48(1), pp. 18-23