The impact of globalization and new technologies on business environment has made it vital for organisations to constantly reassess their structure. French et al (2008), stresses that an organisation should be able to design its tasks and delegate some duties so that it can achieve its mission and vision. It is necessary to explore the importance of organisational design and how it can help in understanding the behaviour of informal and formal groups.
Organisational design refers to the roles and formal reporting relationships that exist within an organisation. According to French et al (2008), it is selecting and implementing a structure for an organisation. The structure of an organisation is the assigned interrelationships and networks that exist among organizational resources (Schermerhorn, Hunt and Osborn, 2005). Organisational structure can be flat or hierarchical, bureaucratic, organic or hybrid. There are arguments that organisations are now less hierarchical in structure (Molinsky et al, 2012). In contrast, there are several who claim that the modern organisational structures are still very controlling with top-down power (Diefenbach and Sillince, 2011).
The purpose of the organisational design is to prepare a layout for which the objectives of the organisation are achieved as it is to align with the organisation’s core competencies. Organisational design has to flexible and must be in alignment with the organisation’s strategy (Goold and Campbell, 2002). When the organisational strategy changes, components of organisation design such as structures roles and functions should be realigned to cater for this change (Corkindale, 2011). If there is a misalignment of organisation design with the organisation’s strategy, the result will be frustrating as employee performance will not drive organisational goals.
Every organisation has both formal and informal structures.... [continues]
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