SUMMARY:

This article is entitled Do you have a well-designed organization?

Michael Goold and Andrew Campbell wrote it.
This article talks about nine tests you can use to analyse the effectiveness
of your design/organization. It is an iterative process where you should
look at all nine steps after each change. It doesnt actually give you any
solutions, just tells you which questions to ask.
Most executives can sense when their organizations are not working well,
but few know how to correct the situation.
Thats why the authors made this article.
1. The Market Advantage test
Does your design direct sufficient management attention to your sources
of competitive advantage in each market?
This part is important because it allows you to know if you organization is
well designed or not. In order to really take advantages from our
competitive advantages on each markets the structure of your company
needs to be well-designed.
To see if your organization is good or not, you need first to determine your
market strategy.
If you have more than one market, you also need to know if the design
allows to be enough focus on each one to be as efficient as possible.
Finally, the most important is to verify if the design supports all your key
advantages and if they are 100% efficient with this structure.
We can take the example of Samsung. This company is present on
different market like TV, smartphone and other. It has reorganised its
organization in 2009 in order to be able to react faster. Now it has one
director per division. This structure allows Samsung to use all its
competitive advantages faster and in a better way than before.
2. The parenting advantage test
In this part, the most important is to understand if the design of the parent
corporation and the design of your company allow a good transmission
between both entities.
The parent organization has to add value to the subsidiary in order to be a
good parent. It can do it by proposing some improvement (which can be
human: more employees, material: by increasing the size of the
organization helping with globalization for example or immaterial: teaching
new skills, relationship)
This test is quite interesting because it can highlight some problems
between both entities so it will permit to see where there is a problem with
the design of the organization or if the parent understands well the
organizations needs.

For example: Iliad who help Free to increase and improve its network
coverage.

3. The People test

In this part everything is around the human side. Generally when there is a
problem with something you easily think its a human problem. However it
is rarely a human problem but more a problem with the design of the
organization. If an organization is not suited to the skills and attitudes of
its members, the problem lies with the design, not the people.
In this test, the management is the quite important, you will have to verify
if every role is respected and if everyone is at the place he belongs.
Example: A top manager specialized in finance wont have to manage
marketing stuff.
Every time when you change or create a new design, it will create a looser.
You will have to identify him and to find a way to erase its influence on
other people because he could turn into a resistant, becoming a road
blocks to change.
4. The Feasibility test
Have you taken account of all the constraints that may impede the
implementation of your design?
This part aim to show you that even if you want to do some modification
about your design you will need to search before if there are elements that
can interfere with this process.
These elements can have different origin:

The government regulation: for example, if you want to install

your organization in China you will need to find a Chinese
partner and thus to adapt your organization design.
The Stakeholders interest: you will have to pay attention to
different element for this section. If your company is publicly
traded maybe you will have to obey to some rules of the stock
market. Furthermore, you will have to consider that maybe the
principal investors will want to have their say on the design.
The third point is about the information systems of the
organization. It is possible that you want to change something
about the design however, you have to ask yourself before if
the information systems of your company is adapted to its
modification. For example if your companys division where

organised by country, it will be difficult to adapt it if you want

to redesign your division around all types of product you
commercialize.
The forth and last point concern the culture of the
organization. Most of the time the problem of culture within an
organization appear after a merger. The problem is that both
companies can have a different way to work, to manage their
unit etcthis lack of coordination or unity can lead to crossdivision and managerial problems.

Introduction:
-

Do you have a well-designed organization?

Effectiveness of your design/organization
There is a problem in the design of my organization but how to fix it?

1: The Market Advantage test

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What is your market strategy?

Are you enough focus?
Do you use your competitive advantages?

e.g. : Samsung reorganization in 2009

2: The parenting advantage test
-

How is your relation with your parent organization?

Can they add value to your organization? (Human, material,
immaterial)
This test can highlight some problem between both entities.

e.g. : Iliad who help Free to increase and improve its network coverage.
3: The People test
-

Around the human side

Human problem? No, design problem!

e.g : A top manager specialized in finance wont have to manage

marketing stuff.
-

Presence of losers

4: The Feasibility test

-

Changes are not always possible

Some elements can interfere:

o
o
o
o

The government regulation:

The Stakeholders interest
Information system
The culture