Organizational Design vs Organizational Development

Is your organization well designed?

How do you know?  What does a well designed organization look like, and how does it feel to work there?  How is it different from a poorly designed one?

The answers to these questions lie in the functional structure, also known as the Organization Design, of your work place.  You’ve heard the term before, “Organization Design”.  The words are familiar to you at a high level, yet may be indistinct as to how they apply to your organization.
Although the concept has been around for ages, many HR professionals are unaware of its strategic impact, and more importantly, how Organization Design should be approached.

In this paper we will examine the concept of Organization Design (OD) and how it can work in your organization.

Doesn’t OD mean Organization Development?

While they share the same acronym, Organization Design is not to be confused with Organization Development.  In fact, these are two separate concepts. Organization Development deals with the “people” side of business performance; leadership, team dynamics, and operational effectiveness.

Organization Development is an effort that is planned, organization wide, and managed from the top.  It is intended to increase organization effectiveness and health through planned interventions in the organization’s process, using behavioral science knowledge.    It is used to change beliefs, attitudes and values in an organization.  Organization Development entails leadership coaching, effective communication strategies, and change awareness to name a few factors.

The key to recognizing the difference is to understand that Organization Development is a response to Organization Design.  In simpler terms, Organization Development deals with “soft matters”, while Organization Design is “hard”.

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Human Resource Management (HRM)

Aligning  Organizacional Structure With Business Goals

The key focus in Human Resource Management (HRM) is the identification of appropriate HR’s strategy, structure and systems within the context of value creation, that it require for the business / organization.

Both HRM and Organization Strategy (Organizational Design as well) must be aligned. Indeed, the main issue is to find out how HRM strategy adds value to the organization.

Lets see the following chat:

The HRM adds value to the business, doesn’t it?
Depends. If HRM has a strategy aligned to the business, then yes!
How is this? The HRM and their inherent area not always have been empowered enough within the Organization, in other cases, HR people don’t full understand or fullfil how to add value to the business strategy.

What methodologies HRM should have?

HRM is a field directed at interventions in the processes of human systems (formal and informal groups, organizations, communities, and societies) in order to increase their effectiveness and health using a variety of disciplines, principally applied behavioral sciences. HR requires practitioners to be conscious about the values guiding their practice and focuses on achieving its results through people.”

But that is not enough to get a HRM aligned with the business strategy

It is necesary the mastering of the following fields:
1. Stategic Planning
2. Customer satisfaction
3. Financial performance
4. Competitive advantage
5. Process Management

 

An example

Regional Airline Balanced Scorecard

Mission: Dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. Vision: Continue building on our unique position — the only short haul, low-fare, highfrequency, point-to-point carrier in America. Read More