Organisational design

Organizational design is a step-by-step methodology which identifies dysfunctional aspects of work flow, procedures, structures and systems, realigns them to fit current business realities/goals and then develops plans to implement the new changes. The process focuses on improving both the technical and people side of the business.
For most companies, the design process leads to a more effective organization design, significantly improved results (profitability, customer service, internal operations), and employees who are empowered and committed to the business. The hallmark of the design process is a comprehensive and holistic approach to organizational improvement that touches all aspects of organizational life, so you can achieve:
⦁ Excellent customer service.
⦁ Increased profitability
⦁ Reduced operating costs
⦁ Improved efficiency and cycle time
⦁ A culture of committed and engaged employees
⦁ A clear strategy for managing and growing your business

THE theme of this year’s report—“The new organization: Different by design”— reflects a major finding: After three years of struggling to drive employee engagement and retention, improve leadership, and build a meaningful culture, executives see a need to redesign the organization itself, with 92 percent of survey participants rating this as a critical priority. The “new organization,” as we call it, is built around highly empowered teams, driven by a new model of management, and led by a breed of younger, more globally diverse leaders. To lead this shift toward the new organization, CEOs and HR leaders are focused on understanding and creating a shared culture, designing a work environment that engages people, and constructing a new model of leadership and career development. In competition for skilled people, organizations are vying for top talent in a highly transparent job market and becoming laser-focused on their external employment brand. Executives are embracing digital technologies to reinvent the workplace, focusing on diversity and inclusion as a business strategy, and realizing that, without a strong learning culture, they will not succeed.

Our global research:-
Now in its fourth year, Deloitte’s 2016 Global Human Capital Trends report is one of the largest longitudinal studies of talent, leadership, and HR challenges and readiness around the world. The research described in this report involved surveys and interviews with more than 7,000 business and HR leaders from 130 countries. (See the appendix to this chapter for details on survey demographics.

Organizational design: The rise of teams
As companies strive to become more agile and customer-focused, organizations are shifting their structures from traditional, functional models toward interconnected, flexible teams. More than nine out of ten executives surveyed (92 percent) rate organizational design as a top priority, and nearly half (45 percent) report their companies are either in the middle of a restructuring (39 percent) or planning one (6 percent). A new organizational model is on the rise: a “network of teams” in which companies build and empower teams to work on specific business projects and challenges. These networks are aligned and coordinated with operations and information centers similar to command centers in the military. Indeed, in some ways, businesses are becoming more like Hollywood
movie production teams and less like traditional corporations, with people coming together to tackle projects, then disbanding and moving on to new assignments once the project is complete.
link:file:///C:/Users/admin/Downloads/Documents/Deloitte_GlobalHumanCapitalTrends_2016_3.pdf

A process for improving the probability that an organisation will be successful is known as Organisational Design.
HUL changed its Organisational Design as follows:
Flexi Time Policy: Being power of strategy flexi time was implemented across all Unilever Research Centres.It is allowing its employees flexible to work for more hours so thst they can spend mor leads toe time per day.
Organisational Heirarchy:Another cause of concern for the HURC was the high level of attrition among the entry-level scientists, who stayed with the company only for about two years. The Centre felt that it took three years for a new scientist to become adept to contribute to Unilever’s research.
HUL in the indian market is one of the most important leader in FMCG.Because of transformation of Unilever ltd from multi-domestic structure to a global matrix structure,India experienced significant organizational changes.These changes have an impact on human resource policy and structural changes in the Hindustan Unilever Research centre based in Bangalore. Increasing global orientation leads to play a major role in UNILEVER R&D department.Shifting of this strategy hift required developing world class research competencies which meant more emphasis on domain expertise without sacrificing product responsiveness as well as cross functional expertise.
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No organisation today is in a particularly stable enviroment. Even those with dominant market share must change. Nowadays, almost every organisation must adjust to the multicultural enviroment, demographical changes, immigrants and outsourcing. We said change refers to making thing different.
For example Tata Motors has rolled out a new organisation structure for its standalone entity, as the new Managing Director Gueter Butscheck seeks to engineer a turnaround at the automaker through faster and effective decision-maling and sharper customer focus.
The new flat organisation, which eliminates layers of middle management and is internally called Organisation Effectiveness, will empower business units with clear accountability and strengthen the functional leadership. It will go live on january 1,2017.
"The future is ours to shape, and we need to gear up to be future-ready," Butscheck said, while communicating in an internal circular. He said the new structure could create some uncertainty, but help in achieving its targets.
The new structure seeks to improve speed and bring simplicity and agility to the organisation. It had previously hired consultancy firms Accenture and Roland Berger to suggest ways to improve competitiveness.
The former operations chief at Airbus, who joined Tata Motors in February, said the new structure will drive fundamental changes in the way the company operates and the structure will help accelerate the urgently needed changes to "deliver on our aspirations and targets." The structures for passenger vehicle and commercial vehicle business units were defined on key principles of end-to-end accountability.

Keeping in mind the external environment, one must keep their organisation updated. Only then can the goals be achieved, when the organisation is in sync with the changes outside of the organisation that has a direct/indirect impact over it.
In the year 2014, McDonald's corporation decided to bring about a change in the organisational structure. This was mainly because the company was planning fundamental changes to its business, as it reported one of its worst quarterly profit declines in years and a 4.1% decline in September U.S. same-store sales. The drop was the worst monthly U.S. same-store sales performance since February 2003. Hence, it was decided to remove the layers and improve their customer service by responding more and better to their tastes and preferences.

On July 1, 2015, President and CEO Mr. Steve Eastbrook introduced substantial changes in order to improve the efficiency of the global operations.Organizational culture of McDonald’s can be classified as divisional. McDonald’s business operations are divided into the following four divisions according to their geographical location:
United States, Europe, Asia/Pacific, Middle East and Africa and Other countries
Each division above possesses its own departments such as IT, finance, marketing and others. Moreover, the most recent changes in McDonald's organizational structure effective from July 1, 2015 increased the emphasis on the international markets clarifying the roles of executives responsible for growth in international markets.

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Organizational structure is the formal design of managerial hierarchies within a company, setting forth both reporting relationships and information flows. A company's organizational structure forms the base upon which operational policies are formed. Structure plays a large role in shaping organizational culture as well, and companies may find it necessary to change organizational structure to remain competitive or adapt to changes in the company, industry or marketplace.

Baker Hughes Incorporated (NYSE: BHI) announced changes to its organizational structure and senior leadership team. The changes follow the company’s May 2 announcement of its plans to capitalize on its leadership position as a product innovator by simplifying its business structure, reducing costs and enhancing its commercial strategy.

Changes include:

Baker Hughes has consolidated its previous regional operations structure into one global organization with responsibility for driving outstanding operational performance, exceptional service and sales execution, as well as delivering strong operating profits. Belgacem Chariag, who was most recently the company’s Vice President and Chief Integration Officer, will serve as President, Global Operations.

ROLLS ROYCE
“Change is a recurring phenomenon” it is a universal truth. Each and every thing in this universe has to change. Now, coming to the topic “headway due to change in the organizational design”. So, every organization also changes their structures/designs time to time.
Take the example of Rolls Royce, almost everyone knows about Rolls Royce, mostly famous for its extreme elite cars. Rolls Royce not only make cars but also engaged in the business of civil aerospace, defence aerospace, marine, nuclear, power systems. Rolls Royce introduced a new senior management structure in December 2015.
• Removal of old senior management layer marked first step in wide-ranging restructuring program.
• New high-level structured to simplify organisation, add pace and drive operational excellence and also to reduce cost.

Due to this change, Rolls-Royce will operate as five market facing businesses, with the Presidents of Civil Aerospace, Defence Aerospace, Marine, Nuclear and Power Systems reporting directly to the Chief Executive.
Also, the new structure will clarify executive accountabilities, intensify leadership focus on operational performance and allow Rolls-Royce to build on its world class engineering capabilities. It is part of a transformation program designed to make Rolls-Royce a more flexible business and generate incremental gross cost savings of £150-200m per annum, with benefits accruing from 2017.

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