ICS

Organizational design - basic design
of one company

Serbia

The visionary aspect of those who deal with this doctrine must be at a very high level, but at the same time, experts in this field should be familiar with a number of other scientific areas in order to compile this "simple picture" and allow the company to develop in the long term.

First of all, the stability of the organizational structure leads to the stability of the company, and in this regard the way in which it will be formed, it should fully satisfy this requirement. Secondly, the organizational structure should enable the smooth development of the company, and in that sense it should, in its stiffness, discover and define the levels of flexibility within which it can be expanded or narrowed. Thirdly, the organizational structure should be financially and functionally justifiable, taking into account the activity of the company. If these two aspects are not met, the company will not be able to work or develop.

Sustainable organizational design should respect very important postulates. In the first place there are the identification and listing of all business functions performed by one company. By grouping these business functions, the organizational design process leads to the formation of key organizational units of work. The first check, at this level, should be in "measuring the strength" of functional and administrative tasks. Although the theory claims to be an ideal model 80:20, in practice, by satisfactorily applying a well-established relationship, the ratio of 70% is functional compared to 30% of administrative business functions. As these functions are distributed, in accordance with the nature of the job, both within profit and within cost centers, this organizational designer should take into account the balance of profit and cost centers in the final definition of organizational units that will be described in the structure.

The second step is defining the level of responsibility and decision making, which creates the number of organizational levels of work or hierarchical levels in the organizational structure as a product. In order to check whether the defined organizational levels are optimal, it is desirable that the persons in charge of organizational design use an optimal relationship of managerial and executive positions, which should be 20%: 80%. If it is determined that this relationship varies considerably (up to 5%) from the optimum in favor of managerial positions, this unambiguously indicates that the structure has more levels than what it needs and what it can bring.

And the third and final step is to define jobs and job descriptions. When defining job descriptions it is necessary to pay attention to their clarity and transparency, since the application of no job described in the job description would not be called into question. The relationships that define this work segment indicate that the job description should contain 80% of the functional jobs of the workplace, 15% of the accompanying activities that the workplace carries and 5% of the general elements most often defined by the law that describes this field more closely.

So, things are not so simple, especially if you have in mind that a badly organized organizational structure can ruin the system of functioning of a company. The next time you think the chart you're looking at is simple, check again. You may have seriously missed something, and maybe you will not have time for it anymore.

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Author: Ilenija Vukosav, Senior Expert in World Bank Projects in the Field of Organizational Design and Legal Issues in Public Sector Reform, she has developed and studied numerous models of organizational forms, designs and matrix structures of the organization during her career so far, she authored numerous texts and works on the topic organizational design and active lecturer in this field, lives and works in Serbia