Why design matters

In designing organizations, managers determine how work is to be performed inside an organization by defining roles, processes, and formal authority relationships. In the literature, four key concepts used to explain organization design are hierarchical composition, task uncertainty, co-ordination cost, and strategy and structure alignment (the latter being a key element in contingency theory). To develop organizational models that are purposeful and future-oriented, one can make use of principles drawn from axiomatic design theory. A new organizational model may be specified by means of five design parameters: the governance model, the operating model, the resource model, the contracting model, and the social network model.