The design of internal structures in an Organization is formed by its organization and work processes. This design is named the Management System and may be certified according to international standards, e.g. ISO 9001. Activities inside the Organization refines available assets into value for external stakeholders.
Good designs of the Management System take into consideration both external aspects to the Organizations as well as internal strengths and weaknesses. The performance of an Organization, viewed by customers and owners, describes the effectiveness of the Management System. Internal performance, as viewed by managers and staff inside the company, describes the efficiency of the Management System.
In order to create a good design of the Management System you have to include 5 top level considerations and develop a solution in the Management System Architecture. I use the term Design Layer for these 5 top level considerations.
- The Organization has to find a position in the selected External Environment.
- It has to identify a Business Logic that matches the behavior of major stakeholders in the external environment.
- The Organization has to design a Value Creation Chain that enables customers to make use of products and services in the most convenient way.
- Responsibilities have to be distributed in Organization Structures
- Relevant Controls should be applied.
Note that the design layers may be easily understood using terms from a company with product, market, customer, etc. But it is equally relevant for e.g. public administrations, nonprofits or any other type of Organization.