What Is Organizational Design, and Why Is It an Important

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The Answer is Answers may vary but should include such points as the following: Organizational design is a process that deals with how an international business should be organized in order to ensure that its worldwide business activities are able to be integrated in an efficient and effective manner. It is essential that the structures and systems being implemented are not merely consistent with each other but also consistent with the environmental context in which the organization is operating and the strategy the company is using for competing in this international environment. The size of the organization and the complexity of its business operations must also be considered in the design of a company.
The structure of an international company (IC) must be able to evolve over time, to allow the organization to respond to change and to efficiently and effectively reconfigure the way in which its competencies and resources are integrated within and across the IC's various units. This is a major challenge for ICs, especially as their activities are increasingly dispersed across the globe as well as subject to rapid and ongoing environmental and strategic change. Failure to successfully deal with this challenge threatens the IC's performance and, indeed, its long-term survival.
The IC's strategic planning process itself, because it encompasses an analysis of the firm's external environments as well as its strengths and weaknesses, often discloses a need to alter the organization. Changes in an IC's strategy may require changes in the organization, but the reverse is also True. For instance, a new CEO may join the firm, or the IC may acquire a company in another nation or in another area of business activity. Strategic planning and organizing are so closely related that usually management treats the structure of the organization as an integral part of the strategic planning process.

What Is Organizational Design, and Why Is It an Important

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