Impact of organization design on performance

Abstract

Most organizations have a structure amongst functional, divisional or hybrid. Each one has different hierarchy, leadership and ownership structure and thus bears a direct impact on the satisfaction and performance of employees of the organization in specific and the organization itself at large. This report studies the impact that various organization design structures have on performance. Three organizations namely, ITC having hybrid structure, ZS having divisional structure and iD Fresh having functional structure were studies and employee interviews and secondary research was conducted. It was found that by a clear margin, the employee performance and satisfaction was more in hybrid and divisional structure and the firms performed better too as a whole. Finally the impact of Covid-19 was also briefly analysed and it was again found that ZS with a functional structure led by example and had the highest satisfaction amongst employees and saw minimal impact on its business even in the wake of the pandemic. These findings were also backed by secondary research and a McKinsey report on employee experience and business functions. Lastly, a limitation of this study is that while all the organizational structure were studies, a sample size of one organization per structure might be small and some organizations might be doing innovative things within themselves. Hence the observations though provide an interesting insight, might not be necessarily co-related and this is a caveat which should be borne in mind while applying the findings of this report.