Organizational architecture
Encyclopedia
Organizational architecture has two very different meanings. In one sense it literally refers to the organization in its built environment and in another sense it refers to architecture metaphorically, as a structure which fleshes out the organizations.
  • Organizational architecture or organizational space
    Organizational space
    Organizational space describes the influence of the spatial environment on the health, the mind, and the behavior of humans in and around organizations. It is an area of scientific research in which interdisciplinarity is a central perspective...

    : the influence of the spatial environment on humans in and around organizations.
  • Organizational architecture or organization design
    Organization design
    Organization design can be defined narrowly, as the process of reshaping organization structure and roles, or it can more effectively be defined as the alignment of structure, process, rewards, metrics and talent with the strategy of the business...

    : the creation of roles, processes, and formal reporting relationships in an organization.


Organizational space describes the influence of the spatial environment on the health
Health
Health is the level of functional or metabolic efficiency of a living being. In humans, it is the general condition of a person's mind, body and spirit, usually meaning to be free from illness, injury or pain...

, the mind
Mind
The concept of mind is understood in many different ways by many different traditions, ranging from panpsychism and animism to traditional and organized religious views, as well as secular and materialist philosophies. Most agree that minds are constituted by conscious experience and intelligent...

, and the behavior
Behavior
Behavior or behaviour refers to the actions and mannerisms made by organisms, systems, or artificial entities in conjunction with its environment, which includes the other systems or organisms around as well as the physical environment...

 of humans in and around organizations (Mobach, 2009). It is an area of research in which interdisciplinarity
Interdisciplinarity
Interdisciplinarity involves the combining of two or more academic fields into one single discipline. An interdisciplinary field crosses traditional boundaries between academic disciplines or schools of thought, as new needs and professions have emerged....

 is a central perspective. It draws from management
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...

, organization
Organization
An organization is a social group which distributes tasks for a collective goal. The word itself is derived from the Greek word organon, itself derived from the better-known word ergon - as we know `organ` - and it means a compartment for a particular job.There are a variety of legal types of...

 and architecture
Architecture
Architecture is both the process and product of planning, designing and construction. Architectural works, in the material form of buildings, are often perceived as cultural and political symbols and as works of art...

 (Dale en Burrell, 2008) added with knowledge from, for instance, environmental psychology
Environmental psychology
Environmental psychology is an interdisciplinary field focused on the interplay between humans and their surroundings. The field defines the term environment broadly, encompassing natural environments, social settings, built environments, learning environments, and informational environments...

, social medicine
Social medicine
The field of social medicine seeks to:# understand how social and economic conditions impact health, disease and the practice of medicine and# foster conditions in which this understanding can lead to a healthier society....

, or spatial science
Spatial science
Spatial Science is an academic discipline incorporating fields such as surveying, geographic information systems, hydrography and cartography. Spatial science is typically concerned with the measurement, management, analysis and display of spatial information describing the Earth, its physical...

. In essence, it may be regarded as a special field of expertise of organization studies and change management (people) applied to architecture. This perspective on organizational architecture is elaborated in organizational space
Organizational space
Organizational space describes the influence of the spatial environment on the health, the mind, and the behavior of humans in and around organizations. It is an area of scientific research in which interdisciplinarity is a central perspective...

.

Organization design or architecture of an organization as a metaphor provides the framework through which an organization
Organization
An organization is a social group which distributes tasks for a collective goal. The word itself is derived from the Greek word organon, itself derived from the better-known word ergon - as we know `organ` - and it means a compartment for a particular job.There are a variety of legal types of...

 aims to realize its core qualities as specified in its vision statement. It provides the infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...

 into which business processes are deployed and ensures that the organization's core qualities are realized across the business processes deployed within the organization. In this way organizations aim to consistently realize their core qualities across the services they offer to their clients. This perspective on organizational architecture is elaborated below.

Content

According to most authors organizational architecture is a metaphor, like traditional architecture it shapes the organizational (some authors would say the informational) space where life will take place. It also represents a concept which implies a connection between the organizational structure
Organizational structure
An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its...

 with other systems inside the organization in order to create a unique synergistic system which will be more than just the sum of its parts.

Conventionally organizational architecture consists of the formal organization
Formal organization
Formal organization is a fixed set of rules of intra-organization procedures and structures. As such, it is usually set out in writing, with a language of rules that ostensibly leave little discretion for interpretation...

 (organizational structure
Organizational structure
An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its...

), informal organization
Informal organization
The informal organization is the interlocking social structure that governs how people work together in practice. It is the aggregate of behaviors, interactions, norms, personal and professional connections through which work gets done and relationships are built among people who share a common...

 (organizational culture
Organizational culture
Organizational culture is defined as “A pattern of shared basic assumptions invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and internal integration" that have worked well enough to be considered valid and therefore, to be taught to...

), business processes, strategy
Strategy
Strategy, a word of military origin, refers to a plan of action designed to achieve a particular goal. In military usage strategy is distinct from tactics, which are concerned with the conduct of an engagement, while strategy is concerned with how different engagements are linked...

 and the most important human resources
Human resources
Human resources is a term used to describe the individuals who make up the workforce of an organization, although it is also applied in labor economics to, for example, business sectors or even whole nations...

 because what is an organization if not a system of people. The table shows some approaches to organizational architecture.
Nadler & Tushman (1997) Merron (1995) Galbraith (1995) Henning(1997) Churchill (1997) Corporate Transitions International (2004)
Vision, strategic goals and strategic management Strategy The role of the organization Strategy
Informal organization Organizational culture Reward systems Reward systems Organizational culture Organizational culture
Formal organization Organizational structure Organizational structure Groupings Organizational structure Organizational structure
Business processes Processes and lateral links Business processes and work design
Human resources Human resources Human resource development Communication


The goal of organizational architecture is to create an organization which will be able to continuously create value for present and future customers, optimizing and organizing itself.
Some under organizational architecture understand building blocks which are mandatory for the growth of the organization. To design an organization means to set up a stage where the drama of life will take place.

Approaches to organizational design

There are various approaches to organizational architecture including
  • (1986, 1991, 2004) - Kenneth D. Mackenzie
    Kenneth D. Mackenzie
    Kenneth D. Mackenzie - management consultant,business theorist on Organization theories,Organization design processual models,organizational leadership, multi-level research and theauthor of Organizational Hologram....

  • (1992, 1993) - David Nadler & Michael Tushman.
  • - Organizational Architecture by David Nadler, Marc C. Gerstein and Robert B. Shaw.
  • (1993, 1995) - Designing organizations using the Star Model
    STAR model
    In statistics, Smooth Transition Autoregressive models are typically applied to time series data as an extension of autoregressive models, in order to allow for higher degree of flexibility in model parameters through a smooth transition.Given a time series of data xt, the STAR model is a tool for...

     as developed by Jay Galbraith
  • Benjamin's Layered Model of organizations.
  • The Organizational Adaption Model by Raymond E. Miles and Charles C. Snow.
  • (1995) - Richard M. Burton & Børge Obel
    Børge Obel
    Børge Obel is head of the Interdisciplinary Center for Organizational Architecture at Aarhus School of Business and Social Sciences, Aarhus University.Obel is also is currently a professor at EIASM in Brussels, Belgium...

  • (2004) - Richard K. Daft
  • (2001) - Ralph Kilmann
  • (2005) - The Tricord Model - Designing organisations from a Whole Systems Perspective

Characteristics of effective organizational design

Some systems are effective and efficient whereas others are not. Successful systems may be attributable to the skill exercised in designing the system or to the quality of management practised during operations, or both. Successful systems are characterized by their simplicity, flexibility, reliability, economy, and acceptability. Simplicity, flexibility, and reliability tend to be a function of design, whereas economy and acceptability pertain to both design and operations. Numerous relationships exist among these characteristics; for example, simplicity will affect economy and possibly reliability. Moreover, management must reach a compromise between economy and reliability, and between technical efficiency and organizational climate. The balance reached will determine whether short- or long-run objectives are optimized.
  • Simplicity


An effective organizational system need not be complex. On the contrary, simplicity in design is an extremely desirable quality. Consider the task of communicating information about the operation of a system and the allocation of its inputs. The task is not difficult when components are few and the relationships among them are straightforward. However, the problems of communication multiply with each successive stage of complexity.

The proper method for maintaining simplicity is to use precise definitions and to outline the specific task for each subsystem. Total systems often become complex because of the sheer size and nature of operations, but effectiveness and efficiency may still be achieved if each subsystem maintains its simplicity.
  • Flexibility


Conditions change and managers should be prepared to adjust operations accordingly. There are two ways to adjust to a changing operating environment: to design new systems or to modify operating systems. An existing system should not be modified to accommodate a change in objectives, but every system should be sufficiently flexible to integrate changes that may occur either in the environment or in the nature of the inputs. For example, a company should not use the same system to build missiles as it uses to build airplanes, nor the same system to sell insurance as the one originally designed to sell magazines. However, it should be possible to modify an existing system to produce different sizes, varieties, or types of the same product or service.

A practical system must be well designed but it cannot be entirely rigid. There will always be minor variations from the general plan, and a system should be able to adapt to such changes without excessive confusion. The advantages associated with having a flexible system will become more apparent when we consider the difficulty of administering change.
  • Reliability


System reliability is an important factor in organizations. Reliability is the consistency with which operations are maintained, and may vary from zero output (a complete breakdown or work stoppage) to a constant or predictable output. The typical system operates somewhere between these two extremes. The characteristics of reliability can be designed into the system by carefully selecting and arranging the operating components; the system is no more reliable than its weakest segment. When the requirements for a particular component — such as an operator having unique skills — are critical, it may be worthwhile to maintain a standby operator. In all situations, provisions should be made for quick repair or replacement when failure occurs. One valid approach to the reliability-maintenance relationship is to use a form of construction that permits repair by replacing a complete unit. In some television sets, for example, it is common practice to replace an entire section of the network rather than try to find the faulty component. Reliability is not as critical an issue when prompt repair and recovery can be instituted.
  • Economy

An effective system is not necessarily an economical (efficient) system. For example, the postal service may keep on schedule with mail deliveries but only by hiring a large number of additional workers. In this case, the efficiency of the postal system would be reduced. In another example, inventories may be controlled by using a comprehensive system of storekeeping. However, if the cost of the storekeeping were greater than the potential savings from this degree of control, the system would not be efficient. It is often dysfunctional and expensive to develop much greater capacity for one segment of a system than for some other part. Building in redundancy or providing for every contingency usually neutralizes the operating efficiency of the system. When a system's objectives include achieving a particular task at the lowest possible cost, there must be some degree of trade-off between effectiveness and efficiency. When a system's objective is to perform a certain mission regardless of cost, there can be no trade-off.
  • Acceptability

Any system, no matter how well designed, will not function properly unless it is accepted by the people who operate it. If the participants do not believe it will benefit them, are opposed to it, are pressured into using it, or think it is not a good system, it will not work properly. If a system is not accepted, two things can happen:(1) the system will be modified gradually by the people who are using it, or (2) the system will be used ineffectively and ultimately fail. Unplanned alterations in an elaborate system can nullify advantages associated with using the system.

Differentiation and Integration


A basic consideration in the design of organization
Organization
An organization is a social group which distributes tasks for a collective goal. The word itself is derived from the Greek word organon, itself derived from the better-known word ergon - as we know `organ` - and it means a compartment for a particular job.There are a variety of legal types of...

s is dividing work into reasonable tasks (differentiation) while giving simultaneous attention to coordinating these activities and unifying their results into a meaningful whole (integration). Two guidelines may be followed in grouping activities:
  1. Units that have similar orientations and tasks should be grouped together. (They can reinforce each other's common concern and the arrangement will simplify the coordinating task of a common manager).
  2. Units required to integrate their activities closely should be grouped together. (The common manager can coordinate them through the formal hierarchy).


When units neither have similar orientation
Orientation
Orientation may refer to:* Orientation , a function of the mind* Orientation , a 1996 short film produced by the Church of Scientology...

s nor share their activities, the task of grouping becomes more difficult. For example, when units are similar in nature and function but are also relatively independent, the manager
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...

 must base his decision on the most appropriate way to group activities according to his past experience.

A difficult task associated with system-subsystem determination is to establish proper boundaries of operations. The more specific and distinct the goals of the operation, the easier it is to set boundaries. Other factors such as the influence of the environment, the availability of men and machines, the time schedule for design
Design
Design as a noun informally refers to a plan or convention for the construction of an object or a system while “to design” refers to making this plan...

 and operation
Business operations
Business operations are those ongoing recurring activities involved in the running of a business for the purpose of producing value for the stakeholders...

, the cost
Cost
In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost. In this...

 of alternative designs, and the particular biases of the designers must be considered when establishing boundaries.

The role of management

Designer
Designer
A designer is a person who designs. More formally, a designer is an agent that "specifies the structural properties of a design object". In practice, anyone who creates tangible or intangible objects, such as consumer products, processes, laws, games and graphics, is referred to as a...

s with imagination have the best chance to group people and machines into workable combinations having the greatest efficiency and effectiveness within the recognized constraints. Certain characteristics should be designed into an effective and efficient system — simplicity, flexibility, reliability, economy, and acceptability.

At this point, the designer must determine what has to be done to achieve the stated objective(s) and how the total task can be divided into meaningful units. Of the many possible combinations, one must be selected as that which satisfies the decision criteria better than the other alternatives. Of course, the balance between technical efficiency and the human factors that determine organizational climate should be included in making this decision. The eventual success or failure of the project is somewhat predetermined by management's attitude and the relationship between the designers and those who must implement the process.

The systems approach suggests a new role for management. In the traditional view, the manager operated in a highly structured, rigid system having well-defined goal
Goal
A goal is an objective, or a projected computation of affairs, that a person or a system plans or intends to achieve.Goal, GOAL or G.O.A.L may also refer to:Sport...

s, clear-cut relationships, tight controls, and hierarchical information flows. In the flexible (or open) systems view, the organization
Organization
An organization is a social group which distributes tasks for a collective goal. The word itself is derived from the Greek word organon, itself derived from the better-known word ergon - as we know `organ` - and it means a compartment for a particular job.There are a variety of legal types of...

 is not static but is continually evolving to meet both external and internal changes. The manager's role is to develop a viable organization, cope with change, and help participants establish a dynamic equilibrium. Leonard Sayles has expressed the manager's problem as follows:

“The one enduring objective is the effort to build and maintain a predictable, reciprocating system of relationships, the behavioral patterns of which stay within reasonable physical limits. But this is seeking a moving equilibrium, since the parameters of the system (the division of labor and the controls) are evolving and changing. Thus, the manager endeavors to introduce regularity in a world that will never allow him to achieve the ideal”.

The systems approach does not offer a prescription for making a manager's difficult and complex job easier. Rather it helps him understand and operate more effectively within the reality of complex systems. The systems approach suggests that operations cannot be neatly departmentalized but must be viewed as overlapping subsystems. In addition, it suggests that leadership patterns must be modified, particularly when dealing with professionals and highly trained specialists, and motivation must take the form of active, willing participation rather than forceful subjugation.

Systems design involves establishing project and facilitating subsystems to accomplish certain tasks or programs. In this approach, the network of human independence required to accomplish a given task is based on the shared responsibility
Moral responsibility
Moral responsibility usually refers to the idea that a person has moral obligations in certain situations. Disobeying moral obligations, then, becomes grounds for justified punishment. Deciding what justifies punishment, if anything, is a principle concern of ethics.People who have moral...

 of all members of the subsystem. In contrast, the traditional organization is geared to functional performance and the integrating force is authority. Instead of gearing participant activities to obedience to rules and closely structured behavior, the systems approach provides a basis for active cooperation in meeting task requirements. The manager is looked upon as a resource person who can help the group meet its goals and also as a source of authority and control. Thus, systems theory lends a structure by which the concepts of motivation, leadership, and participation can be applied effectively within the organization.

Implementation is, of course, implicit in the connotation of systems design; otherwise it would be nothing more than an empty exercise. It follows that the interface between managers and systems designers is critical, and mutual understanding must be fostered to maximize returns from design efforts. The system must be tailored to the needs of the organization and adapted continually as circumstances change. In a general sense, managers
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...

 engage in systems design on a day-to-day basis when they plan activities and organize systems to accomplish objectives. Specialized staff groups have evolved to perform tasks such as long-range planning, organizational studies, and systems design. However, since managers are ultimately responsible for organizational endeavors, they should make a special effort to help ensure the development of useful systems and to make design activities an extension of the manager's role rather than a separate function.

Operating managers need to understand the organizational decision-making requirements and the information needed to support the system. Although the probability of success in implementation is enhanced considerably if management
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...

 is vitally interested in the project, technical expertise and motivation for change are more likely to be found in staff groups. The solution to the apparent dichotomy would seem to be a team approach, with specialists supporting operating managers who are responsible for the project's success. A manager might devote either part-time to such an effort or full time temporarily, if the task requires it.

A project involving an integrated system for the entire company might well require years to complete. If operating people are delegated responsibility and authority for such a project, particularly if they are delegated the authority to outline specifications, they should also maintain sufficient contact with the day-to-day operations and its attendant information
Information
Information in its most restricted technical sense is a message or collection of messages that consists of an ordered sequence of symbols, or it is the meaning that can be interpreted from such a message or collection of messages. Information can be recorded or transmitted. It can be recorded as...

 flow to retain their expertise for decision making. If the environment is dynamic or internal capabilities undergo change, it might be wise to rotate people from operations to systems design periodically, so that operating expertise is updated continually.

See also

  • Business reference model
    Business reference model
    Business reference model is a reference model, concentrating on the functional and organizational aspects of the core business of an enterprise, service organization or government agency....

  • Departmentalization
    Departmentalization
    Departmentalization refers to the process of grouping activities into departments.Division of labour creates specialists who need coordination. This coordination is facilitated by grouping specialists together in departments....

  • Enterprise Architecture framework
  • Interdisciplinary Center for Organizational Architecture
    Interdisciplinary Center for Organizational Architecture
    Interdisciplinary Center for Organizational Architecture is a research center at Aarhus School of Business and Social Sciences in Aarhus, Denmark....

  • View model
    View model
    A view model or viewpoints framework in systems engineering, software engineering, and enterprise engineering is a framework which defines a coherent set of views to be used in the construction of a system architecture, software architecture, or enterprise architecture. A view is a representation...


Further reading

  • The Spaces of Organisation & The Organization of Space -Power, Identity & Materiality at Work by Karen Dale and Gibson Burrell, 2008, ISBN 0-230-57268-5
  • Een Organisatie van Vlees en Steen by Mark Mobach, 2009, ISBN 978-90-232-4531-5
  • Organization Modeling by Joseph Morabito, Ira Sack and Anilkumar Bhate, 1999, ISBN 0-13-257552-3
  • Designing Organizations by J. Galbraith, Jossey-Bass Publishers, San Francisco, 1995.
  • A framework for managing IT-enabled change by R.I. Benjamin and E. Levinson, Sloan Management Review, Summer 1993.
  • Organizational Architecture by David Nadler, Marc C. Gerstein and Robert B. Shaw, 1992, ISBN 1-55542-443-0.
  • Arhitektura suvremenih organizacija (The Architecture of Modern Organizations) by Miroslav Žugaj and Markus Schatten, publisher Tonimir, Varaždinske Toplice, 2005, ISBN 953-7069-50-8
  • Organizational Adaption by Raymond E. Miles and Charles C. Snow, 2003, ISBN 0-8047-4840-3.
  • Burke-Litwin Model of Organization Performance by W. Warner Burke and George Litwin, Journal of Management, Vol. 18, No. 3, 523-545 (1992)
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