Organization Design, as a holistic competence area is fairly unexplored. Designing an organization is a complex undertaking. You may find books and trainings in process management, organization structure theories, target setting, project management, agile development, etc. Each of one of these competence areas can be used to create tangible building blocks in an organization design. It may be targets, processes, roles, decision points, etc. These tangible building blocks should be viewed as elements in a system.
The design of an organization cannot be understood by exploring single elements in isolation. Increased capabilities in an isolated element will not improve organizational efficiency, whatever level of perfection the element has achieved. All elements have to be optimized in relation to surrounding elements. And the sum of all such design elements of an organization has to interact with surrounding environment. We have to develop the organization as an open system. Only when we do this, we may achieve both internal efficiency and external effectivity. This is the way to build sustainable business success.
Why has so little practically useful new science been published lately? I have discussed this with friends and colleagues, working at universities and different companies. I have searched in libraries and on the internet. There are a lot of management literature, but not much is new. The fundamental models that defines our mindset are old. Not many have a system approach. If they have, they either describe the organization design at a very general level or focus one element of the organization design. The most commonly referenced theories or models I have found are:
- Management by objectives, 1954, Peter Druker
- Star model, mid 1960’s, Jay Galbraith
- McKinsey 7-S Model, 1980, Tom Peters
- Process Re-Engineering, 1990, Michael Hammer
- Business Balanced Scorecard, 1992, Robert Kaplan & David Norton
- Business Model Canvas, 2004, Alexander Osterwalder
The idea that an organization is an open system is not new in any aspect. The idea that all design elements has to work together is not new. But why can I not find modern system theories on organization design? Theories based on in depth studies and having a holistic perspective on how to build an organization. Where are the research? What are the latest theories? Where are the researchers?