A Comparison of five popular Organization Design Models

April 2012

Organization Design Models- A comparison

Organization Design is not an exact science. The success of any approach lies in making the design exercise logical and objective. Over the years, many models have been developed for understanding the various elements of Organization Design. The objective has been to provide a framework to understand the intricacies of organization design. We present here five most popular models for Organization Design with their benefits and limitations We hope that knowing the benefits and limitations of each model assists you in making the right choice for designing your organization

Source: Guide to Organisation Design: Creating High-Performing and Adaptable Enterprises By Naomi Stanford, John Wiley& Sons, 2007

McKinseys 7S Model
Published by Waterman & Peters in 1980s, this is the most commonly accepted model. Its popularity lies in the fact that both hard elements and soft elements have been considered and their interactions are firmly established

Benefits Description of important organizational elements. Recognition of the interaction between the elements.

Limitations No external environment (input) /throughput /(output) element No feedback loops No performance variables.

Galbraiths Star Model

Strateg y People

Developed by Jay Galbraith in 1960s, the star model is widely accepted because of the approach that seamlessly links competitive advantage to strategy to structure , people , lateral processes and reward mechanisms

Structur e

Reward s

Behavior Cultur e

Processe s

Benefits Description of important organizational elements Recognition of the interaction between the elements

Performanc e

Limitations Does not call out some key elements including inputs/outputs culture

Weisbord Six Box Model

Purpose What business are we in?

Developed by Marvin Weisbord in the 1970s, this model gives attention to issues such as planning, incentives and rewards, the role of support functions ,internal competitions among organizational units, and the delegation of authority, organizational control, accountability and performance assessment Structure How do we divide up the work?

Relationships How do we manage conflict among people? With technology?

Leadership Does someone keep the boxes in balance? Helpful Mechanism Have we adequate coordinating technologies Rewards Do all needs tasks have incentives?

Environment

Benefits Includes some diagnostic questions in each box Requires the purpose to be stated

Limitations Focus on some elements may lead to overlooking of others

Nadler and Tushmans Congruence Model

Developed by David A Nadler and M L Tushman in the early 1980s, the basic principle of this model is that an organization's performance is derived from four elements: tasks, people, structure, and culture. The higher the congruence, or compatibility, amongst these elements, the greater the performance.

Informal Organizatio n
Input Strategy, Resources , Environm ent

Work

Formal Organizatio n

Output Individual, team and organizatio nal performanc e

People

Benefits Easy to follow Allows for discussion of what comprises informal & formal organizations Boxes must be congruent with each other

Limitations Few named elements may lead to wheel spinning or overlooking of crucial aspects.

Burke-Litwin Model
External Environment Mission & Strategy

Developed by Burke & Litwin in 1992, this model shows the various drivers of change and ranks them in terms of importance. The model is expressed diagrammatically, with the most important factors featuring at the top. The lower layers become gradually less important.

Leadership

Organization culture

Structure

Management Practice Work unit Climate

Systems

Task requirement s and individual skills

Motivation Individual and Organization al Performance

Individual needs and values

Benefits Includes feedback loops Calls out more qualitative aspects(e.g. motivation)

Limitations Very detailed Difficult to grasp at a glance