By M. Isi Eromosele

The success of modern organizations greatly relies on getting the right information to the right people at the right time. This is where design plays a critical role. Each design creates a different pattern for collecting and disseminating information throughout the organization.

The key is finding the information processing design that is best suited to a particular organization’s information processing needs. These needs vary radically from one organization to the other or even from one business unit to the next within the same firm.

The critical variable is the interdependence, the degree to which a group’s effectiveness is determined by its ability to share information with another group. There are two primary blocks used to achieve the desired level of information processing effectiveness: grouping and linking.

Grouping

Grouping is the most basic form of organization design, aggregating certain personnel, jobs, functions or activities into discrete business units. While grouping can optimize information processing within a group, it could also create barriers that impede smooth interactions with other groups.

Realistically, there are only three fundamental ways of grouping personnel and their jobs:

• Grouping by activity organizes personnel by the kind of work they do, defined by skills, discipline or function
• Grouping by output combines personnel on the basis of the product or service they are engaged in producing, regardless of their specific job
• Grouping by user or customer organizes personnel and their work on the basis of who will be the end users of their product or service

There is clearly some correlation between structural groupings and the kind of strategy to which each is best suited:

• If your strategic intent is to gain competitive advantage, then activities-based grouping will probably be the most effective since it avoids duplicative operations
• If your strategy is based on product differentiation, then grouping based on output makes the most sense because it focuses information and resources on product innovation
• If your strategy involves getting close to the customers and focuses on market segmentation, then customer-based grouping obviously makes the most sense

Each decision about grouping is important. However, the selection of a grouping method for the top management of the organization is the most crucial because it dictates where the flow of information will be facilitated and where it will be impeded at each successive level of the organization.

Linking

Linking involves the construction of devices connecting separate groups that have to coordinate their work. Groups within organizations must have some way to share and act upon essential information.

Unlike groupings, which have a finite number of variables, linking mechanisms can assume a variety of forms, depending upon the organizational setting. Common linking mechanisms include:

• Liaison roles. These linking mechanisms are generally assigned to trusted and respected individuals, in addition to their normal responsibilities
• Cross-unit groups. These devices can take the form of standing and ad hoc committees and they can focus on processes, output or customers, or any combination of the three
• Integrator roles or departments. These mechanisms introduce general management functions into the linking processes. Integrators are responsible for making sure the processes work
• Matrix structures. This involves linking through hierarchy, the most expensive, extreme and difficult to manage of all the linking mechanisms. Nevertheless, the complexity of modern organizations, particularly multinationals has made matrix structures fairly common in today’s business environment.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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