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A Comparison offive 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
McKinsey’s 7S Model
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.
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
Galbraith’s Star Model
People
Strategy
Structure
ProcessesRewards
Behavior
Performance Culture
Benefits•Description of important organizational elements•Recognition of the interaction between the elements
Limitations• Does not “call out” some key elements including inputs/outputs culture
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
Weisbord Six Box Model
PurposeWhat business are we
in?
PurposeWhat business are we
in?Relationships
How do we manage conflict among
people?With technology?
RelationshipsHow do we manage
conflict among people?
With technology?
StructureHow do we divide
up the work?
StructureHow do we divide
up the work?
LeadershipDoes someone keep the
boxes in balance?
LeadershipDoes someone keep the
boxes in balance?
Helpful MechanismHave we adequate co-
ordinating technologies
Helpful MechanismHave we adequate co-
ordinating technologies
RewardsDo all needs tasks have incentives?
RewardsDo 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
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
Informal Organization
Informal Organization
Formal Organization
Formal Organization
PeoplePeople
WorkWork
Nadler and Tushman’s Congruence Model
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.
InputStrategy,
Resources, Environment
InputStrategy,
Resources, Environment
OutputIndividual, team and
organizational performance
OutputIndividual, team and
organizational performance
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.
Mission & Strategy
Mission & Strategy
StructureStructure
Task requirements and individual
skills
Task requirements and individual
skills
Organization culture
Organization culture
SystemsSystems
Individual needs and values
Individual needs and values
Burke-Litwin Model
Benefits• Includes feedback loops• “Calls out” more qualitative aspects(e.g. motivation)
Limitations• Very detailed • Difficult to grasp at a glance
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.
Individual and Organizational Performance
Individual and Organizational Performance
MotivationMotivation
Work unit Climate
Work unit Climate
Management Practice
Management Practice
LeadershipLeadership
External Environment
External Environment