HRM9705M Organisational Design & Development
Introduction
Organisational design (OD) is arranging necessary work effectively and efficiently from high priority to low in order to achieve business goals while offering high-quality customer and employee experience (Shrestha et. al. 2019). While organisational development (ODV) is the planned and systematic change in operations and values of the employee to ensure the overall growth of the company. The present report discusses both OD and ODV where the first part is the reflective analysis of own development during the module and the second part is the report that discusses the organisational design and its benefits.
A) Reflective Essay
The reflective analysis enables one to get knowledge about own strengths and weaknesses in learning, experience, beliefs, values, and behaviour. The present module helps me to understand the subject which I believe is very useful for my knowledge and future endeavour. This module improves my employability by developing several skills which I acquire systematically. The following are describing learning skills from this module:
Human resource management and its impact on the organisation: Role of HRM in the company and their ability to add values as well as form part of the overall business decision-making process (Daft, 2020). The module enables me to get knowledge about the role of HRM and its importance in decision-making which inspires me to learn more about HRM and its various areas. I learn that HRM is a very comprehensive area that significantly contributes to and supports business functions and their value additions are extremely important for business profitability and competitiveness. This knowledge helps me to learn basic concept about HRM and encourage me to strengthen my knowledge.
Human resource development: I learn how HRM can achieve success to implement the overall strategy of the business carefully and considering the development of its people and process. From this topic, I learn that HR not only involves people management but also, they have to take care of processes and their effective implementation. I learn more about the process like performance management designs, pay structure strategies, learning and development, training, recruitment, and control strategies in the portfolio of HR which is very crucial to run the business successfully (Cohen et. al. 2019). Further, their approach to managing people, fulfilling their needs, keeping them motivated, retention strategies, and more are very important for employee development and are valuable assets for the organisation.
Organisational development: I get the knowledge that appreciates the relationship between OD and other HR practices and disciplines. Moreover, understanding how to use models to diagnose an organisation’s effectiveness. Is very important lesson I learned from this module is that organisational development is very important and how HR supports OD and vice versa. Moreover, I learn about various principles of OD and how it uses by businesses as per their requirement and standard as well as customisation scopes. Further, I acquire knowledge about diagnosis models which helps in organisations effectiveness (Dubey et. al. 2021). I believe that this information helps me to achieve a desirable job in a recognised organisation as it is the basic principle that every company wants to know from their employees.
Organisational designs: I learn how to diagnose whether the organisational design is the optimal response to change in business circumstances. An organisation works in a dynamic environment and an adaptable firm gets long-term success. Thus, it is very important to get knowledge about organisational design whether it is viable to change and able to quickly respond to the business environment or not. It improves my knowledge about the external business environment and how it affects business operations along with the importance of effective design that helps to face these outside and unpredictable challenges (Tomaskovic-Devey and Avent-Holt, 2019). This knowledge is important for my future career and improve my skills in market trends and designs.
Influence: I learn the skill and ability to implement tools and techniques in this module to maintain stakeholder buy-in. Stakeholder management is very important and companies demanded people who have knowledge and experience of stakeholder management.
Problem-solving: It is the most basic skill that every organisation seeks from their employees as well as it is important for academic learning. Through this skill, I get able to identify issues and develop practical and feasible solutions.
Commercial awareness: I learn to develop my understanding of the commercial aspect of business and how it affects HRM and OD initiatives that can be utilized. This module increases my knowledge about commercial aspects of business which is essential to learn to achieve a desirable career and designation (Kondalkar, 2020). Moreover, it enables me to leverage market opportunities if I have sound commercial awareness. This knowledge enables to analyse of the impact of commercial aspects on HRM and OD which is important in the decision-making and implementation process.
I develop several skills during the module. However, there are many things that I still need to know and get expert knowledge. Thus, I have to focus on continuous learning and acquire new knowledge and experience that helps me in the course as well as in the future.
B) Report on organisational design
Organisational design refers that how an organisation is structured to implement its strategic plan and achieve its goals. It means that suitable organisational design determines by the organisation’s strategy. The organisational design creates the best structure for the execution of strategy related to the external environment and the organisation’s unique internal competencies, leadership style, strengths, and weaknesses (Bratton, 2020). However, there are no organisational design best practices as every firm has different requirements and sectors that choose the design and even can change the designs as per their needs and goals. Organisational design is the conceptual framework that aims to diagnose their current state and establish a unique identity, purpose, value, and culture which helps to thrive. Further, it aims to visualise future positions that will succeed. There are four types of organisation designs: diagnostic, transformational, experimental, and flexible. All designs have sub-designs which makes them complex. For the present study, a diagnostic model has been chosen.
Diagnostic model
It is the most usable organisational model and the creator of this model moves from industrial age hierarchical model to a flatter and more responsive age (Anderson, 2019). Organisations have various priorities and issues in their design and thus, understanding the diagnostic model help to choose the accurate tool for the business. There are several design models from which McKinsey’s 7s model is chosen.
McKinsey’s 7s Design model
This model was developed in the 1980s by the McKinsey consulting group and focuses on the interconnectedness of seven key elements of the organisation. The model recommends that these elements need to be aligned and mutually reinforcing in order to achieve organisational effectiveness. Regarding, data collection and analysation of the company get supported by the chosen diagnostic model. These seven elements assess through different methods like surveys, interviews, and focus groups. The collected data can be analysed to identify gaps and misalignment areas between the elements. For instance, if the analysis shows that the organisation has a centralised structure but actually it is a decentralised decision-making system, it indicates misalignment between system and structure (Leitão et. al. 2019). At the same time, if analysis proves that employees lack the necessary skills to execute the strategy, it could show misalignment between skills and strategy elements. However, this model oversimplifies organisational design complexity. The organisation operates in a dynamic and constantly evolving environment where they interact between seven elements which can be complex. Although, this model is a very useful and well-known framework to collect and analyse relevant organisational data to support organisational design. It is noted here, that these seven elements divide into two main elements: hard and soft. Hard elements are easily influenced and identifiable by leadership and management while soft elements are those that are culture-driven and intangible (Spector, 2019). The following are describing seven elements of the McKinsey model and its suitability to collect and analyse organisational data to support chosen design.
Figure 1: McKinsey’s 7s framework
(Source- McCoy, 2023)
Hard elements
Strategy: The strategy element is the detailed plan that the organisation makes for successfully implementing the change and gaining competitive advantages. Well-designed strategy is aligned with the other six elements of this model and it is reinforced by a strong vision, mission, and values. It defines how the company will compete in the market. Moreover, it allows the company to formulate an action plan to achieve a sustainable competitive edge. In other words, strategy is the plan to generate profit and achieve competitiveness. In order to collect relevant organisational data that helps in design, strategy reveals all information (McCoy, 2023). As in the strategy element, a company plan how they maximise their profit deals with competitive pressures and deal with changing customer demands, expectations, preferences, and tastes. Collecting data about these areas and analysing it to find the suitability regarding organisation design, can be initiated by exploring strategies.
A company’s strategy reveals its future position, the organisational potential to manage change, stakeholders, and external causalities. However, the strategy element is very complex and these questions are very basic to get the entire organisation knowledge. In order to collect and analyse data, a strategy element is suitable but not sufficient to get detailed knowledge. Additionally, the organisation often changes its strategies as per external market trends (Leithwood and Louis, 2021). For example, organisations allow work remotely in the Covid-19 situation and small firms close their operations to save infrastructure costs. In such a situation, basic strategies are not sufficient to get knowledge about designs.
Structure: Structure refers clear chain of command to control confusion and chaos. The structure is a simple but vital element as it makes sense of employee accountability within the organisation. It is the way in which a company is an organisation and builds responsible and accountable relations that make an organisational chart. Moreover, it is the way to organise business functions. Structure helps to create an organisational chart depicting the chain of command. In order to identify structure patter and collect data, some areas can be analysed. For example, how teams are divided, what is the company hierarchy, how many activities assigned to various departments, the level of autonomy in decision-making within several departments, and lines of communication implicit or explicit (Kanter, 2019). In order to collect organisational data and analyse them, the structure reveals valuable insight. These areas show the organisation’s capacity to react in a challenging situation, HRM practices and approaches, and communication strategies.
HRM approach determines the organisation design and development because it supports the main business operation. Hence, the structure is a useful element to evaluate the chosen design. However, it is a very comprehensive area and the information size would be larger to analyse which creates chances of errors. Further, it may change and modify as per the changing requirements. Therefore, it could not be the only element to evaluate organisation designs.
Systems: These refer to business processes and operational processes employed to fulfil a business’s daily activities. An organisation’s SOPs (Standard operation process) include workflows, practices, and approaches that directly affect decision-making and productivity (Migdadi, 2019). Further, the system entails the technical and business infrastructure of the company that establishes the decision-making chain and workflows. It is the decision framework, procedure, and process that determine how the firm does business. Employees use standard procedures and activities to complete their daily job. In order to get information about organisational designs, systems are the most useful area. However, it is not easy to get data about how the organisation works as it differs per the type of job every department within an organisation does and even it varies as per the team leader and the project type. Although, basic data about how the system work can be collected to evaluate the design.
For example, what are the main systems which maintain performance, how systems are evaluated and controlled, and what benchmarks are used to keep systems on track (Gechkova and Kaleeva, 2020)? This information enables us to get knowledge about employees’ and leaders’ approaches to getting their job done appropriately. In order to diagnose the organisation design, systems are the best area to get relevant information. Additionally, it is viable for the diagnostic design and easy to know because employees and leaders use them on a daily basis.
Soft elements
Style: It refers to the management style prevalent in the company that determines the level of employee satisfaction, performance, and productivity. The attitude of senior employees in a company establishes a code of conduct through their way of communication, symbolic strategy-making, and collaboration that create management styles for leaders (Cox et. al. 2019). In other words, it is the way senior leaders manage the company and the value they present to stakeholders. In order to know about the style, some factors need to evaluate like does the company have effective leadership, do employees at each level feel satisfied with their work, and do managers micro-manage or macro-manage. However, each leader has a different style to handle their teams which is difficult to recognize. Employee productivity and satisfaction level are the criteria to know about their leadership style whether autocratic, democratic, transformational, charismatic, or participative.
Getting knowledge about style is difficult but it reveals the organisation design in a true manner because leadership and management styles create design and determine future development (Suwanda et. al. 2022). Further, micro or macro management is challenging to know because it cannot be revealed through data, documentation, or any recorded files. Also, sometimes employees even do not know that they are being micro-managed by their leaders because it gradually becomes the culture.
Staff: It represents the talent pool, size of the workforce, and their motivation to do work in the firm. It considers how they are trained and get rewarded within the company. It includes talent management and human resources activities like recruiting, selection, compensation, and training. It is very important in the organisational design as employees’ skills, experience, dedication toward the organisation, and motivations to work for the company, determine the overall design. Diagnose staff includes: whether the company has an adequate number of workforces, what the critical position is that is empty, and whether are there any gaps in competencies (Pospisil and Zavodna, 2022). HRM is a very important function that supports the main business and manages people as well as processes. Further, HRM plays a vital role to maintain a balance between all departments, keep all employees motivated, and fulfil their needs that reflect on their performance and productivity.
There are several HRM theories used by the organisation as per their specific requirements. Collecting and analysing information about these theories, practices, and approaches enables to evaluate the design and potential of the company as well as their competencies and competitiveness. However, it is a wide area that includes many activities like recruitment, selection, learning, training, induction, controlling, compensation, performance management, retention, and many more. Hence, it is difficult to collect data about staff elements.
Skills: It refers to the ability of the employee to complete the task. A research report states that around 45% of employees report that the skill gap leads to low productivity (Razmi et. al. 2020). Skill gap overburdened employees who have experience and they have to take their co-worker’s slack. It is crucial to identify the skill gap and make effective training programs for employees to reduce the gaps. Skills build the competencies and capabilities of the business that help the employees to achieve their goals. Moreover, it is the company’s ability to perform which is usually defined as a competency framework that aligns them from organisation competencies to individual skills, knowledge, and abilities. Hence, skills related to the core competencies of the company to employee efficiency.
Therefore, collect data about the required skills for the company to get success, identify gaps in the required skills, and skills control and monitoring approaches (Salihah et. al. 2022). However, it is a very dynamic and sensitive area to collect and analyse data because every employee posse’s specific skills and abilities that collectively bring a similar outcome but from a different approach. Hence, data collection and analysation from this perspective interfere with the final outcome and the evaluation process because inconsistent data create an irrelevant outcome. Thus, it is suitable to diagnose organisational design but it cannot use solely.
Shared Values: These are the values that navigate a company. While executing change management strategies, organisations expect modification in behaviour from their employees, which is possible in strong culture and high values. The mission, vision, values, and objectives build the foundation of every organisation and play a crucial part to align all core elements to maintain effective organisational design (Sukartini et. al. 2020). It is the core of the seven models that reflects in other elements. The official mission statement, employee’s alignment with the official mission statement, fundamental values for the firm, and characteristics of the company’s culture reveal the shared values of the organisation. It is the best-suited element to collect and analyse organisational data to support the diagnosis design. However, it differs as per the organisation type, size, values, and the industry type. The base of values does not tend to change but it can modify according to the external environmental conditions.
Thus, it is very crucial to get data about an organisation’s shared values and diagnose them to evaluate the design. Although, it reveals the designs and the potential to sustain in the future (Odeh, 2021). Since it is the important element among the seven elements, and so, it should be considered crucial in the entire organisation design, and data collected about value should be precise and effective.
As per the model, it is essential for elements to remain balanced and reinforce each other so the organisation can achieve its goals and ensure sustainable development.
Advantages of model
McKinsey’s model helps various parts of the company to act in a synchronised and coherent manner. Moreover, it allows for effective monitoring of the impact of changes in core elements (Kumar, 2019). It is considered a longstanding theory with various companies adopting the model over time like Nokia, MacDonalds, and many more. It helps to balance crucial elements rather than focusing only on structure and strategy. It can be profitable during acquisition and merger to bring functional elements and processes to the same page. This model helps to implement regulations, strategies, and policies designed by business leaders. Additionally, it uses to develop analytics to track change impacts.
Disadvantages of model
McKinsey’s model does not involve an action plan for change management as it is a static evaluation to balance organisational elements. There are some critics of this model that its emphasis is inward and does not consider external factors which also influence these elements (Awaludin and Abdillah, 2022). Moreover, it does not explicitly describe the effectiveness and performance of the organisation. It is also known as a long-term model, and with the change of business nature, it remains unadopted the change. This model was criticised for being specific to recognise a gap in strategy and its implementation.
McKinsey’s 7s model is a relevant, viable, and best-suited model to collect and analyse organisational data to support the diagnostic design and it effectively reveals organisation development and design (Melinda and Wagianto, 2021). It includes all those elements that collectively form the designs and lead to development.
Conclusion
The present report concluded that McKinsey 7s model under diagnostic design is the best-suited and relevant model to collect and analyse organisational data. However, it does not include external factors that affect the business operations. Although, this model has several benefits that help to evaluate organisational designs, HRM processes, change management, and organisational development.
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