Global Organization Design

by

Tatiana Kostova

• LAST REVIEWED: 22 April 2013
• LAST MODIFIED: 22 April 2013
• DOI: 10.1093/obo/9780199846740-0045

Introduction

The term “organization design” has been used in a variety of ways ranging from a very narrow focus on organization structures to a very broad conceptualization as a system of organization structures, processes, and people that facilitate the implementation of the organization’s strategy. The term has been used as both static and dynamic, depending on whether it captures a snapshot of an organization at a given moment in time, or whether it reflects a process of change, realignment, and reshaping of all organization design elements. In addition, research on organization design has extended beyond the boundaries of the firm including interorganizational networks. This bibliography employs the broadest definition of the term and both its static and dynamic aspect, as this allows coverage of a wider body of work.

Introductory Works

Many of the concepts related to organization design have their roots in organizational studies that preceded the emergence of the field of international management. These include, for example, the classic works Galbraith 1995, Drucker 1973, Mintzberg 1983, Lawrence and Lorsch 1967, and others who developed the key principles of organization design based on a well-articulated systems view: organization design is more than just structure; different strategies lead to different organizations; and for an organization to be effective, all the policies must be aligned with one another. While recognizing that these pieces are not specifically focused on the global organization, they have served an important foundational role and have greatly contributed to shaping research in this area. For the purposes of brevity, this section does not cover the full history of the concept but instead focuses on its application in the context of multinational companies (MNCs).

• Drucker, P. F. Management: Tasks, Responsibilities, Practices. New York: Harper and Row, 1973.

  In this landmark text, Drucker defines a number of design principles for the creation of effective organizations. He argues that structure is an essential element for the organization’s success but also that it is not an end in itself. A key managerial responsibility is to ensure consistency between organizational structure and goals.

• Galbraith, J. R. Designing Organizations: An Executive Briefing on Strategy, Structure and Process. San Francisco: Jossey-Bass, 1995.

  This is a practitioner-oriented, concise guide to designing effective organizations. It presents a wealth of examples about the role of organizational design relative to a firm’s policies, behavior, and performance, and it describes how leaders can affect processes of organizational change through effective organizational design.

• Lawrence, P., and J. Lorsch. Organization and Environment: Managing Differentiation and Integration. Boston: Harvard University Press, 1967.

  This seminal text develops further the open-systems concept by analyzing how a company’s external environment influences its pattern of organization and administration. It presents empirical evidence to support the claim that different structures are more or less appropriate to address the varying demands of the environment (technological, market, and economic).

• Mintzberg, H. Structure in Fives: Designing Effective Organizations. Englewood Cliffs, NJ: Prentice-Hall, 1983.

  In this classic guide for managers on developing effective organizational structures, Mintzberg identifies five major coordinating mechanisms (mutual adjustment, direct supervision, the standardization of work processes, input skills, and outputs) and five major parts of organizations (strategic apex, middle line, operating core, technostructure, and support staff).