Within the SME sector it can be common to manage an organization using informal structures, but this can lead to an increased risk of non-compliance with legislation and best practice.

Within the SME sector it can be common practice to manage an organization using informal structures, but this can lead to an increased risk of non-compliance with legislation and best practice. Org design should be implemented in order to complement new strategies and processes that organizations have implemented in response to changes in their operating environment (for example new legislation).

What does Organizational Design involve?  It is a set of principles that inform the process of designing an organization’s operating model – it’s structure, processes and systems. It is a way to create an organizational structure that aligns with the overall strategy, goals and culture.

Organizational design should be implemented in order to complement new strategies and processes that organizations have implemented in response to changes in their operating environment.

Organizational design should be implemented in order to complement new strategies and processes that organizations have implemented in response to changes in their business model or the operating environment. By formalising the structure of your organization, it contributes towards organizational agility and responsiveness, while also increasing employee satisfaction and reducing costs. 

A re-design of your organizational structure helps an SME achieve its objectives by providing a framework for decision-making, communication, coordination and control within the organization. All things that can only be good for the Board of Management reports.  It also provides a mechanism through which employees can contribute effectively towards achieving organizational goals.  This allows for greater corporate governance as it enhances efficiency and productivity creating openness and transparency. 

Organizational design contributes towards organizational agility and responsiveness while also increasing employee satisfaction and reducing costs.

The aim of organizational design is to ensure that the organization’s structure and systems are aligned with its strategy and objectives. Organizational design can be used to help an SME meet its goals in various ways:

• Increased employee satisfaction. A well-designed organizational structure increases employee satisfaction, which will lead to increased productivity, loyalty and commitment from staff members and volunteers. In addition, it may help reduce turnover rates as well as the cost associated with replacing employees who leave.

• Increased agility/responsiveness. When an SME has a better understanding of what they want to achieve and how they plan on doing so, they will be able to react faster when faced with unexpected challenges or opportunities. 

SMEs need to consider key factors such as strategy, goals and culture when engaging in organizational design projects.

• Strategy: An organization’s strategy should be well-defined, in order to ensure that its organizational design aligns with the vision and mission of the organization.
• Goals: Organizational goals are critical for ensuring that your project achieves its intended outcomes. You should take time to identify both short-term (i.e., one or two year) and long term (i.e., five year) goals before embarking on any organizational change initiative.  We can advise on that if you need help at this point.
• Culture: Organizational culture refers to how people behave within an organization; it’s often defined by shared values, beliefs, norms and behaviours among employees and volunteers within an organization. An understanding of current culture will help you create effective solutions for improving future performance, by enabling new ways of working together across teams who may currently have different priorities or priorities that conflict with each other’s goals.
• People: Employees and volunteers play a key role in shaping organizational culture so it’s important they have a voice when designing new processes or systems – especially if these involve changes which affect their roles.
•  Processes: Processes describe how tasks get done within organizations.

An appropriate organizational structure can help ensure SMEs comply with the law and best practices

An appropriate organizational structure can help ensure your SME has legal compliance and utilises best practices.

Positive outcomes may include;

• increase in employee and volunteer satisfaction
• reduction in costs
• increase in agility
• increase in responsiveness
• increase in productivity
• better compliance
• adherence to corporate governance

Conclusion

Organizational design is a critical practice for the SME sector and can help organizations to meet their goals. Organizations should consider key factors such as strategy, goals and culture when engaging in organizational design projects.

Get in touch today to discuss your operating model and learn how we can help create a formalised structure. info@allagi.ie