Using Organizational Architecture To Lead Change

The term organizational architecture refers to the structure and form by which a business operates. All types of businesses, from marketing firms to corporate restaurant chains, operate under this concept. Read on to learn more about organizational architecture as it applies to businesses. Organisational Architecture is “a theory of the firm, or multiple firms, which integrates the human activities and capital resource utilisation within a structure of task allocation and coordination to achieve desired outcomes and performance for both the short run and the strategic long run”.

In building a business, it’s no denying that doing what we desire would result in a good impact of the business. Doing what we are capable of and what we’re skilled in, therefore it would be easier for us to understand things we didn’t know before since it’s the business we always desire.

Effective leadership involves more than developing and communicating the right strategic vision for the company. To encourage employees to carry out the corporate vision, companies must ensure consistency among the following three main components of their “organizational architecture:”

• The allocation of decision-making authority (that is, who in the organization gets to make what decisions)
• Performance measurements systems (for evaluating the performance of individuals as well as business units)
• Reward systems (the reward for success, both financial and otherwise, and the consequences of failure)

Reference:

Brickley, J., Smith, C., Zimmerman, J., & Willett, J. (2009). Using organizational architecture to lead change. Journal of Applied Corporate Finance, 21(2), 58-66.