Decision Tools Included on the CD-ROM ix
Introduction xi
The Authors xv
1 Fundamentals of Organization Design 1
The Star Model: A Framework for Decision Making 2
Strategy 5
Organizational Capabilities: Translating Strategy into Design Criteria 6
Structure 8
Processes 16
Rewards 21
People 22
Design Principles 23
Requisite Complexity 23
Complementary Sets of Choices 23
Coherence, Not Uniformity 24
Active Leadership 24
Reconfigurability 24
Evolve, Do Not Install 24
Start with the Lightest Coordinating Mechanism 25
Make Interfaces Clear 25
Organize Rather Than Reorganize 25
2 Designing Around the Customer 27
Customer-Centric Strategies 28
What Is Customer-Centric? 28
Strategy 29
Structure 29
Process 30
Rewards 30
People 30
The Drive Toward Customer-Centricity 31
Customer-Centric Strategies 33
Customer Profitability and Segmentation 36
Customer-Centric Organizations 38
Strategy Locator: How Customer-Centric Do You Need to Be? 38
Customer-Centric Capabilities 41
Customer-Centric Light 42
Customer-Centric Medium 49
Customer-Centric Intensive 57
3 Organizing Across Borders 69
Levels of International Strategy 71
Level 1: Export 71
Level 2: Partner 72
Level 3: Geographic 73
Level 4: Multidimensional Network 73
Level 5: Transnational 73
Design Considerations: Geographic 74
Geographic Example: Cemex 76
Structure 76
Processes 83
Rewards 87
People 87
Design Considerations: Multidimensional Network 89
Strategy 90
Structure 91
Processes 95
Rewards 100
People 101
Design Considerations: Transnational 103
Strategy 104
Structure 104
Processes 105
Rewards 107
People 107
4 Making a Matrix Work 109
What Is a Matrix? 110
Strategic Reasons to Use a Matrix 112
Challenges of a Matrix 113
Matrix Design 116
Structure 116
Processes 126
Rewards 134
People 137
5 Solving the Centralization--Decentralization Dilemma 141
Corporate Center Strategy 143
Understanding the Business Portfolio 144
Portfolio Diversity 145
Organizational Implications of the Business Portfolio Strategy 147
Role of the Corporate Center 149
Size of Corporate Staff 151
Centralization and Decentralization 152
Definitions 152
Strategic Reasons for Centralization 154
Strategic Reasons for Decentralization 156
Predictable Problems of Centralization 158
Predictable Problems of Decentralization 160
Making an Explicit Choice 161
Getting the Best of Both: A Balancing Act 163
Structure 165
Processes 167
Rewards 171
People 171
6 Organizing for Innovation 173
Innovation Strategies 175
Sustaining Innovation 176
Breakthrough Innovation 176
Innovation Capabilities 178
Innovation Process 178
Portfolio Management 180
Balancing Separation and Linkage 180
Designing for Breakthrough Innovation 181
MeadWestvaco Specialty Chemicals Division 182
Structure 184
Processes 190
Rewards 196
People 199
7 Conclusion 203
Appendix: Decision Tools 207
Bibliography 245
Index 249
How to Use the CD-ROM 255

Designing Your Organization is a hands-on guide that provides managers with a set of practical tools to use when making organization design decisions. Based on Jay Galbraith s widely used Star Model, the book covers the fundamentals of organization design and offers frameworks and tools to help leaders execute their strategy. The authors address the five specific design challenges that confront most of today s organizations: Designing around the customer Organizing across borders Making a matrix work Solving the centralization and decentralization dilemma Organizing for innovation