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Organization Design

Organization Design
Creating Strategic & Agile Organizations

July 2018 | 352 pages | SAGE Publications, Inc
To thrive in today’s rapidly changing, global, dynamic business environment characterized by constant change and disruption, organizations must be able to adapt and innovate to maintain their competitive edge. Organization Design: Creating Strategic & Agile Organizations prepares students to make smart strategic decisions when designing and redesigning organizations. Structured around Galbraith’s Star Model™, the text explores five facets of organization design: strategy, structure, processes, people, and rewards. Author Donald L. Anderson distills contemporary and classic research into practical applications and best practices. Cases, exercises, and a simulation activity provide multiple opportunities for students to practice making design decisions.

Includes an innovative organization design simulation activity that puts students in the role of a design practitioner!

About the Author
Chapter 1: Introduction to Organization Design
Organization Design Defined

Organization Design Is a Set of Deliberate Decisions

Organization Design Is a Process

Organization Design Assumes a Systems

Approach to Organization

Organization Design Is Based on the Organization’s Strategy

Organization Design Encompasses Multiple Levels of Analysis

Organization Design Is More Than Organizational Structure

Organization Design Is an Interdisciplinary Field of Research and Practice

History of Organization Design

1850s to Early 20th Century

1910s to World War II

Post–World War II to 1960s

1970s and 1980s

1990s and 2000s

The Case for Organization Design Today

Design Affects Performance

Design Is a Leadership Competency

Today’s Organizations Experience Significant Design Challenges

Today’s Focus on Agility Is a Design Issue


Questions for Discussion

For Further Reading

Chapter 2: Key Concepts and the Organization Design Process
Key Concepts of Organization Design

The STAR Model of Organization Design

Alignment, Congruence and Fit

Contingency Theory and Complementarity

Tradeoffs and Competing Choices

Reasons to Begin a Design Project

Performance Is Suffering Because of Misalignment

The Strategy Changes

There Is a Shift in Environment or External Context

There Are Internal Changes to Structures, Functions, or Jobs

The Organization Has Made One or More Acquisitions

The Organization Expands Globally

There Are Cost Pressures

There Is a Leadership Change

Leaders Want to Communicate a Shift in Priorities

The Design Process

Scope, Approach, and Involvement

Top Down

Bottom Up

Deciding Who Is Involved

Design Assessments and Environmental Scanning

Design Assessments: Gathering Data

Using the STAR Model as a Diagnostic Framework

Environmental Scanning: STEEP and SWOT

Evaluating the Current Design

Evaluating Alignment in the Design

Evaluating Strategy/Task Performance and Social/Cultural

Factors in the Design

Goold and Campbell’s Nine Design Tests

Design Criteria and Organizational Capabilities

Benefits of Design Criteria

How to Develop and Use Design Criteria in the Design Process


Questions for Discussion

For Further Reading


Case Study 1: The Supply Chain Division of Superior Module Electronics, Inc.

Chapter 3: Strategy
Why Strategy is an Important Concept for Organization Design

What is Strategy?

Sustainable Competitive Advantage

Activity Systems and Strategic Tradeoffs

Types of Strategy

Porter’s Generic Strategies

Treacy and Wiersema’s Value Disciplines

Miles and Snow’s Strategy Typology

Stuck in the Middle

Key Concepts

Porter’s Five Forces Model

Core Competencies

Blue Ocean Strategies and the Strategy Canvas

New Trends in Thinking About Strategy


Questions for Discussion

For Further Reading


Chapter 4: Structure
Connecting Strategy and Structure

How Strategy Influences Structure

How Structure Influences Strategy

Dimensions of Organization Structure

Departmentalization or Groupings

The Purpose of Department Groupings

Structure Options

Advantages and Disadvantages of Structure Types

Principles of Structure

Shape/Configuration: Span of Control and Layers

Distribution of Power: Centralization/Decentralization

Division of Labor and Specialization

Connecting Strategy and Structure: Revisited


Questions for Discussion

For Further Reading


Chapter 5: Processes and Lateral Capability
Lateral Capability: The Horizontal Organization

Why Developing Lateral Capability Is So Difficult

Benefits and Costs of Lateral Capability

Forms of Lateral Capability


Shared Goals, Processes, and Systems


Integrator Roles

Matrix Organizations

Getting the Level of Lateral Capability Right

How to Decide Which Form to Use

Governance Models and Decision Authority

Governance and Planning Processes

Decision-Making Practices

Enablers for Successful Lateral Capability


Questions for Discussion

For Further Reading


Case Study 2: Collaboration at OnDemand Business Courses, Inc.

Chapter 6: People
Case 1: Coca-Cola

Case 2: AT&T

Case 3: Lafarge

Traditional Approaches to People Practices

A Strategic Approach to People Practices

Key Positions and the Differentiated Workforce

“A” Positions and Pivot Roles

Talent Identification and Planning

Talent Identification: Focus on Potential

Talent Planning, Pipelines, and Talent Pools

Career Development

The Classic View: Stages of the Career

The Contemporary View: Boundaryless Careers

Talent Development and Learning Programs

New Forms of Learning versus Formal Training

Development Through Experiences

Performance Management

Strategic Analysis and Designing the People Point

Global Considerations


Questions for Discussion

For Further Reading


Chapter 7: Rewards
Approaches to Rewards

Misaligned Rewards: When Rewards Fail

Unethical Behavior

Counterproductive Behavior

Conflict and Competition

Slower Change and Resistance

Why Designing Rewards is so Challenging


Expectancy Theory, Goal Setting, and Equity

Intrinsic and Extrinsic Motivation

Motivation-Hygiene Theory

Intrinsic Motivation and Extrinsic Rewards

Motivational Impact of Job Design

Metrics and the Balanced Scorecard

Rewards Strategy and Systems

Basis for Rewards

Types of Rewards

Designing a Rewards System That Works

Rewards, Strategy, and Other STAR Points


Questions for Discussion

For Further Reading


Case Study 3: A Talent and Rewards Strategy at EZP Consulting

Chapter 8: Reorganizing, Managing Change, and Transitions
Change and Resistance

Personal Transitions

A Change and Transition Planning Framework


Reorganizing and Transition Planning

Structure, Reporting Relationships, and Staffing

Pace and Timing

Scope and Sequencing


Feedback and Learning

Organizational Culture and Design

What Is Culture?

Understanding Culture: Competing Values Framework

Leadership and Organization Design

Leadership’s Role During the Design Process

Leadership’s Role During Change

Design and Leadership Development

Leading New Teams


Questions for Discussion

For Further Reading


Case Study 4: Reorganizing the Finance Department: Managing Change and Transitions

Chapter 9: Agility
Why Agility is Important Today

Continuous Design and Reconfigurable Organizations

What Agility Means

“Change-Friendly” Identity

Sensing Change

Agile Strategy

Zara and Transient Advantages

Rapid Prototyping and Experimentation

Agile Structure

Structure and the “Dual Operating System”


Agile Process and Lateral Capability

Agile Teams

Global Collaboration

Partnerships and Collaborative Networks

Agile People

Learning Agility

Leadership Agility

Agile Rewards

Agility and Stability


Questions for Discussion

For Further Reading

Chapter 10: Future Directions of Organization Design
Emerging Beliefs about Organizations and Design

Work Trends Create Design Challenges

Design Challenges Shape Design Process

Future Trends in Organization Design Theory and Practice

Big Data

Digital Technologies, Platforms, and Business Models

Sustainability and the Triple Bottom Line

Changes in Organization Design Practice: A Case Study of Royal Dutch Shell

The Organization Design Practitioner Role and Skills


Questions for Discussion

For Further Reading

Organization Design Simulation Activity

Part I: Strategy

Part II: Structure and Process and Lateral Capability

Part III: People and Rewards

Part IV: Reorganizing



Instructor Resource Site

Password-protected Instructor Resources include the following:

  • Test banks provide a diverse range of pre-written options as well as the opportunity to edit any question and/or insert your own personalized questions to effectively assess students’ progress and understanding.
  • Editable, chapter-specific PowerPoint® slides offer complete flexibility for creating a multimedia presentation for your course.
  • Multimedia content includes videos and web resources.
  • EXCLUSIVE, influential SAGE journal content ties important research and scholarship to chapter concepts to strengthen learning.
  • Case Notes are designed for instructors to expand questions to students or initiate class discussion.
  • Discussion questions offer suggestions for sparking class debate and dialogue.

I have used the STAR model for a long time and this textbook handles it well. I also appreciated the section on agility, and innovation.

Professor Ann Feyerherm
Organization and Management, Pepperdine U-Sch Of Bus Mgmt
August 2, 2019

The text is very good for academic practices. Highly updated.

Ms Laura Salas Arbelaez
Business Administration, Universidad Del Valle (US BU)
September 25, 2019

Great introductory resource and the create your own organization appendices were so helpful for class.

Dr Trevor Cox
Adult Education and Safety Science, University Of Central Oklahoma
August 7, 2019
Key features


  • A unique chapter on Reorganizing, Managing Change, and Transitions explores the unique challenges of changing an existing design and best practices for managing change.
  • Extensive coverage of the importance of strategy and agility in organization design not typically provided in other texts prepares students to tackle design challenges in the modern workplace.
  • An innovative organization design simulation activity puts students in the role of a design practitioner.
  • Real-world case studies and exercises provide students with practical opportunities to develop their skills and translate theory into practice.
  • The book’s blend of classic and contemporary theory reminds students of theoretical roots while bringing in fresh cutting-edge thinking and new literature reviews that other books gloss over.

Sample Materials & Chapters

Chapter 3. Strategy

Chapter 9. Agility

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