Organizational design is the process of choosing and implementing structures that best arrange resources to serve the organization's mission and objectives. The ultimate purpose of organizational design is to create an alignment between supporting structures and situational challenges. Bureaucratic (or mechanistic) organizational designs are vertical in nature and perform best for routine and predictable tasks. Adaptive or organic organizational designs are horizontal in nature and perform best in conditions requiring change and flexibility.Bureaucracy is a form of organization based on logic, order, and the legitimate use of formal authority. Its distinguishing features include a clear-cut division of labor, strict hierarchy of authority, formal rules, and procedures, and promotion based on competency. Mechanistic designs, thriving in the 1960s by Tom Burns and George Stalker when the environment was stable, are a highly bureaucratic organizational design. It was centralized with many rules and procedures, such as a clear-cut division of labor, narrow spans of control and formal coordination.The organizational design trend is now toward more adaptive organizations that operate with a minimum of bureaucratic features and with cultures that encourage worker empowerment and participation. They display features of the organic designs including more decentralized authority, fewer rules, and procedures, less precise division of labor, wider spans of control, and more personal means of coordination. They are described as relatively loose systems in which a lot of work is done through informal structures and networks of interpersonal contacts. Organic designs recognize and legitimate these linkages and give them resources they need to operate best. They are also increasingly popular in the new workplace, where the demands of total quality management and competitive advantage place more emphasis on internal teamwork and responsiveness to customers.Environment, strategy, technology, size, and people are all contingency factors influencing organizational design. Certain environments lend themselves to more vertical and mechanistic organizational designs. Uncertain environments require more horizontal and adaptive organizational designs. As for technology, including the use of knowledge, equipment, and work methods in the transformation process is an important consideration in organizational design. Although organizations tend to become more mechanistic as they grow in size, designs must be used to allow for innovation and creativity in changing environments.Strategy formulation is vital when attempting to reach a goal of superior profitability or above-average returns. The major opportunities for competitive advantage are found in cost and quality, where strategy drives an emphasis on operating efficiency and/or product or service quality; knowledge and speed, where strategy drives an emphasis on innovation and speed of delivery to market for new ideas;...
