INSTITUT

TEKNOLOGI
DEL

TOPIK KHUSUS BIDANG MINAT

SISTEM ENTERPRISE
ORGANIZATION DESIGN

“Remember upon the conduct of each depends the fate of all.” – Alexander the Great (356 BC-323 BC), Greek conqueror
of Persia and the Near East.
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Garis Besar
Organizational Design

Organization Structure

Decision Processes

Job Design

Reward System

The People

Organization Culture
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ORGANIZATION DESIGN
ORGANIZATIONAL DESIGN

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Organizational Design
• Organizations have been a subject of study for a long time.
• The more significant organizational theories that have
emerged are: the classical theory, the human relations
theory, the organization decision-making theory, and
contingency theory.
• Modern organizational theory is influenced by all of these
earlier theories.

Source:
https://www.nasa.gov/
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Organizational Design
• Based on theories, we divide the organization design problem into
five aspects:
1. Design the organization structure
• The organization structure describes how the organization is divided into
organizational units and how they are related to each other.
2. Design the reward system
• The reward system describes how individuals in the organization are
rewarded in terms of perks, financial rewards, promotions, and prestige.
3. Design the people
• Design the people, refers not to actually designing the individuals in the
organization, but to designing the training program and the organizational
culture that dictates how they interact.
4. Design the job
• Job design involves specifying the set of tasks that constitute a job.
5. Design the decision processes
• To design the decision processes involves specifying how decisions are made,
how people are managed, and how the work is coordinated. It is process
design, but design of the managerial processes not the work processes.

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ORGANIZATION DESIGN
ORGANIZATION STRUCTURE

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Organization Structure
• The organization structure describes how the organization is divided into
organizational units and the relationships between those units.
• An organizational unit is a distinct, identifiable grouping of people.
• There can be multiple criteria for grouping; it can be by function, by
common output, or by geography.
• The purpose of grouping is that the people in the organizational unit share
common resources and work toward common measures of performance.

FIGURE 1
Four common structures.

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Organization Structure
• The organization structure is diagrammed in an organization chart.
• The Organization Chart is a diagram that shows the division of the
organization into units and the authority relationship between
those units.

FIGURE 2
Partial organization chart of cruise line.
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Organization Structure
• There is no single best TABLE 1 Comparison of Three Dominant Structures

structure for all

organizations; the structure
is contingent on the
environment, the size of the
organization, and the
enterprise strategy.

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ORGANIZATION DESIGN
DECISION PROCESSES

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Decision Processes
• Decision making is the process of making decisions and
includes the activities to identify problems, understand the
problem, generate alternatives, and select the best alternative
– i.e., make a decision.
• Designing the organizational decision process involves:
1. Designate who in the organization has the authority to make what
types of decisions.
2. Develop systems and processes to obtain the information required
for the person to make the decision.
3. Establish policies governing how the decisions are to be made.

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Who Makes Decisions?

• Where in the organizational hierarchy decisions are made is described by the
centralization of the organization.
• Highly centralized organizations tend to concentrate decision making at the top
of the hierarchy with little or no input from lower-level employees.
• Decentralized organizations delegate more decisions to be made at lower
levels.

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Information for Decisions

• Information is a key input to the decision-making process.
• Too much information is as much a problem as too little
information.
• People become overwhelmed with too much information
because it competes for their time, and a situation of
information overload can be detrimental to the decision-
making process.
• The design of the information infrastructure involves
information technology.

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Decision Policies
• Policies are the rules that guide how individual decisions are
made.
• Policies differ for routine decisions and non-routine decisions.
• For routine decisions, policies tend to be didactic, specifying rules,
procedures, and documentation to guide the decision (i.e., many retail
stores have check cashing policies that state the conditions under
which a check can be accepted from a customer.
• For non-routine decisions usually specify broad, flexible processes for
making decisions.

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ORGANIZATION DESIGN
JOB DESIGN

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Job Design
• Job design is the specification of the content of work that an
individual or group undertakes and the methods they use to
do their work.
• The goal of job design is to specify the work content of a job to
satisfy the process design requirements while simultaneously
achieving an effective fit between the person, job, and
organization.
• Job design has two dimensions:
• Breadth – the number of tasks in each job
• Depth – the degree of control the person has over the work.

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Job Design
• Job design involves answering the following questions:
• What tasks should be put together in the same job?
• What skills and training are needed for the job?
• What decisions should the employee doing the job be allowed to make?
• What job characteristics will motivate employees to be productive, do
high quality work, contribute toward enterprise goals, and be
motivated to continuously improve individual skills and knowledge as
well as organizational capabilities and knowledge?
• Another element of job design is the ergonomics of the job.
• Ergonomics is the study of the physical demands work places
on a person’s body and how to best design the work to
mitigate any negative consequences.

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Job Design
• The output of job design is a job title and job description.
• The job description sets expectations for performance so that the employee
understands what is required of the job, how performance is rewarded,
and what the employee’s relationship to the organization will be.
• A job description includes:
• Job title.
• Job summary.
• Job tasks, responsibilities, and authorities.
• Job qualifications needed to carry out the work: education, training, certifications,
skills, experience, and knowledge required.
• Job reporting relationships such as the employee’s supervisor and any positions
that might report to the employee.
• Possible career progression, criteria and timing of performance reviews.
• Total renumeration package including salary, wage, bonus, and other benefits.
• Work location and any travel required.

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ORGANIZATION DESIGN
REWARD SYSTEM

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Reward System
• The reward system or incentive system is a formal mechanism in the
organization for recognizing employee achievement of the organization’s
goals.
• The reward system needs to let individuals know what is expected of them.
• The employees need to have the skills, abilities, resources, and support to
be able to fulfill those expectations.
• Next, the employees need to know that, when they do accomplish those
things, they will be rewarded in ways that are personally valued and
meaningful to them.
• To accomplish this, every job needs to have a goal or work standard
associated with it; the goals need to be aligned to organizational goals; the
goals need to be within the employees ability to control performance; and
management needs to monitor the performance of employees against the
goals, and provide periodic feedback to the employee.

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Compensation
• Compensation is the total remuneration paid to employees for the
work they perform. Compensation includes the wages and benefits
the employees receive (paid healthcare being the largest non-wage
benefit).
• Three dominant compensation systems are:
• Salaried workers. Salaried workers are paid a set salary for a period of
time such as biweekly regardless of how many hours they work. Many
professionals such as engineers, doctors, and managers are salaried
employees.
• Hourly workers. Hourly workers are paid a wage per hour they work. The
company must keep track of the hours worked on time cards so the
employees are compensated correctly.
• Commissioned workers. Workers on a commission are paid for
performance. Many salespeople are on commissions. They earn a base
wage (usually very low) and are paid a percentage of each sale they make.
In the service industry (waiters, taxi drivers, hotel bellboys), it is common
that tips make up the bulk of the compensation for these employees.

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ORGANIZATION DESIGN
THE PEOPLE

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The People
• Many leaders have said how the enterprise is nothing without
its people.
• An enterprise cannot “design” its people but it can decide who
to hire (and who to fire), how to train and develop people, and
to lead people.
• These tasks fall under the domain of the human resources
department in the enterprise.
• The task of the enterprise designer is to establish the
organizational infrastructure and policies to support human
resources.

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The People
• An organization needs to make the following decisions
concerning the people in the organization:
• How many people to have in the organization.
• What knowledge, skills, and expertise these people should have.
• What training to provide.
• What type of leaders to have for the organization.
• These decisions are dependent on other enterprise design
decision and also influence how other decisions are made.

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ORGANIZATION DESIGN
ORGANIZATION CULTURE

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Organization Culture
• Organizational culture is the set of values, beliefs, and norms that
are shared by people and groups in an organization and that control
the way they interact with each other and with stakeholders outside
the organization.
• Values are expressions of what the organization believes.
• Beliefs embody particular views about how the world works.
• Norms describe the behavioral manifestations of values and beliefs.

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Referensi
• R. E. Giachetti, “Design of Enterprise Systems: Theory,
Architecture, and Methods,” CRC Press, 2011.

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