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The management challenge of flexibility may be observed through looking into the managerial repertoire of flexible capabilities. Since increasing the speed and variety of managerial capabilities proves to be a challenging goal, the firm will not be able to fully utilize its flexible capabilities without an appropriate organizational design. We thus examine flexibility's organization design challenge through identifying the organizational conditions that are necessary for utilizing the flexibility mix. Since the potential for flexibility is determined by the existing organization design, there is a need to determine whether redesigning the organizational conditions is required. The focus of this chapter is thus rooted on examining the organizational barriers to flexibility.

This introductory chapter begins with brief a discussion of how we are trapped by behaviour patterns that exist at all levels of organizations. Traps are created when the problems to be solved are likely to be upsetting and threatening to all concerned. These Traps inhibit effective problem solving and inhibit the detection and correction of errors. It then sets out the purpose of the book, which is to examine the advice of thought leaders writing about organizations and their management. It focuses on three topics: leadership, culture, and organization design. An overview of the subsequent chapters is presented.

As shown through the narrative about BOC's Industrial Gases Division, companies have to adjust to changing environments by being open to innovation, new technology, and collaborating enterprises through undermining geographic boundaries. While competition has evidently become more intense across all industries and business sectors, the need for companies to work on their competitive advantage arises. However, it is also important to note that the methods of attaining such competitive advantage also changes and organizations cannot merely rely on traditional procedures. This chapter introduces how “organizational capabilities”—the ways in which organizations structure and motivate—has proved to be one of the most fundamental sources of competitive advantage. Managers have to understand how to effectively utilize their competitive strengths and that designing organizations is a continuous process.

In the early 1980s, General Motors attempted to implement the GM-10 program, which entailed gathering resources from various aspects of the corporation and establishing a single unit concerned with the entire process of producing new mid-sized cars to address the increasing competition in the market. However, the company seemingly proved to be incapable of pulling off such a setup since those that comprise GM are protective of its own bounds and resources. Chaos resulted from the attempts that GM made at reconstructing the company into two major groups. As this chapter identifies the mistakes made by GM, it examines the implementation of organization designs, specifically those that address the issue of managing organizational culture.

This chapter discusses an approach to issues of organization design that helps to develop an integrated perspective dealing with a variety of organizational forms. These include hybrid structures such as matrix organization, as well as standard functional and divisional forms of organization. The chapter first examines the role of synergy and complementarity in coordinating resources. It then looks at the problems involved in the decomposition of various strategies into different organization designs. The chapter also reviews some problems posed by the multinational enterprise for organizational design and examines the matrix solution in this context.

Significant changes that redefine the competitive environment have driven various organizations to re-examine their organization designs and flexible capabilities. Since an ideal flexible form has yet to be determined and described, managers in contemporary firms have proceeded with different organizational experiments even without models or theories. However, firms in today's hypercompetitive environments have continued to develop and identify new advantages that result in a temporary disequilibrium. New organizational forms are needed so that opportunities may be explored and utilized effectively, strategic focus must be easily changed, and values and norms have to be considered. From the framework illustrated in the previous chapter, we identify three optimal organizational forms that link the competitive environments with effective organization designs and flexibility types.

The chapter starts with a historical outline of organization design featuring the following trends: • Contingency and configuration • The Simonian design tradition • Institutional organization design • Cognitive, situated, and generative approaches • Systemic approaches from business economics. Next, the chapter turns to an analysis of future trends, based on three proposals. The first concerns the growth of design thinking, which although containing a host of proposals for organization design change, it is so far not seen as an organization designing trend. Second, the trend of managerial choice and action as the focus of organization design is brought back from classical organization theory but with a new twist, that is, the role of the manager is now split into three separate but integrated activities—strategizing, designing, and managing. Third, it is proposed that the turn in some management literature towards language and meaning would become the focus of managerial action under the new design-inspired paradigm.

For the past century or more, we have been taught to think of the design of organizations in terms of a legacy of principles left to us by pioneers such as Taylor, Fayol, and Weber. Names such as Follet, Barnard, or Elton Mayo, although admired and often cited have never made it to the compendia of organization design. So, organizations continue to be designed with a logic of command-and-control, carrot-and-stick, and make-believe ethics which cause the organizational unease often reported in the literature. In this chapter, a proposal for a set of five new human-centred logics of organization design is put forward. The proposal is the result of an investigative process which starts from the realization that a number of contemporary literature trends on management and organization reveal concerns that somehow coincide with human-centred design (HCD) principles and ideas. The new logics are: identity and identification, normative, service, effectual reasoning and interactive structure.

The Introduction deals with four issues which summarize the aims and the reach of the book. First, the realization that organizations dominate our socioeconomic landscape, with their influence and their impact on the environmental, ethical, and social issues of our age, extending to our everyday lives. Second, it focuses on the widespread dissatisfaction with the way organizations are governed and managed, the lowering of moral standards, and the increase in the toxicity of most organizational environments. Third, it suggests that the prevalent theoretical paradigm of contingency and configuration not only seems to have reached a total impasse in terms of further academic development but, more importantly, it has not succeeded in creating organizations that fulfill the needs and ambitions of ordinary people. Fourth, it proposes that design, design theory, and design culture have much to offer to organization design and should indeed constitute the basis for the new, badly needed paradigm.

This chapter is about the implementation of new or modified organization designs; therefore, it is about organization design leadership. We have opted to use the expression leaderful designing instead of design leadership, thus avoiding the complicated issue of defining and establishing the scope of leadership. Leaderful designing represents an attitude towards the design of organizations, indicating a concern with action, participation, and collective action. It shares the defining features of democratic leadership, understood not in its representative sense but in the sense of distributed leadership. The second most important aspect of leaderful design concerns meaning. Meaning is constantly created, communicated, and changed in organizations; and all participants play a role in articulating the meaning(s) of what their group members need to accomplish their tasks, however the primary meaning-makers are the managers. Managers play a crucial role in extracting or providing cues that guide behaviour and transmit cultural norms to group members.

This chapter builds on the discussions in Chapter 4 about the bridging between organization design (design as a noun) and organization designing (design as a verb). Based on the key precepts of Giddens’ (1984) social theory, it is argued that the traditional notion of organizational structure can be split into the concepts of structure and structuration and that while ‘structure’ is relatively stable, ‘structuration’ is ever changing. This allows us to talk of ‘interactive structure’ as a type of structure that changes with interaction and where the emphasis is on the monitoring of interactions between human and non-human actors, by means of multiple types of traces. Thus, rather than controlling people, with interactive structure, organizations are better able to deal with the disconnect between the formal and the informal sides of organization and take full advantage of the organizational capital to be found in one of the key characteristics of informal organization, i.e. improvisation.

The two conceptions of organization design—simultaneously historical legacy and dynamic change—create a major conundrum, identified by Simon’s (1996) as an important challenge to the design of social organizations. The solution, according to Simon, is to design without final goals, however no advice is provided about how this might be achieved. In this chapter, it is proposed that this is possible through the use of mechanisms that bridge between the past and the future of the organization’s design. The mechanisms are formative affectual contexts and design trace. Enhanced by embodied cognition theory, the notion of formative context provides a solid background for an understanding of the processes of organizational change that co-evolve with organization designing. The notion of design trace is based on the idea that organizational interactions leave a trace that can be harnessed and used to help manage the organization’s designing effort.

Organization design research is a branch of organization science that is concerned with understanding how organizations work in terms of aggregating the actions of their members towards organizational goals, and how to make organizations work better. The microstructural approach to organization design abstracts away from the variety and complexity of organizations to a few fundamental and universal problems of organizing (that relate to how they aggregate their members’ efforts), as well as a few reusable building blocks, called microstructures (which capture common patterns of interaction between members of an organization). The complexity and variety of organization designs, this approach claims, can be understood in terms of these simpler elements. I give an overview of the basic ideas of the microstructural approach, and its implications for theory, methodology and practice.