The Strands That Connect: An Empirical Assessment of How Organizational Design Links Employees to the Organization

Article excerpt

How do organizations link employees to their cultures? What role does organizational design play in bonding employees to the organization? How can management link employees to an organizational culture when employees have a well-established ethnic or sociodemographic culture? These questions continue to be important because of three familiar forces: global competition, labor shortages, and technological change, which have come together in the last 10 years to increase the need for organizations to focus on people as the critical resource. Using a 4,000-respondent database from a validated organizational behavioral questionnaire, the authors find the answers to their linkage questions.

How do organizations link employees to their cultures? What role does organizational design play in bonding employees to the organization? How can management link employees to an organizational culture when employees have a well-established ethnic or sociodemographic culture? To explore these questions, this study identifies the statistically significant relationships between organizational design and employees in 12 organizations and explains how and why these relationships exist.

These questions continue to be important because of three familiar forces: global competition, labor shortages, and technological change, which have come together in the last 10 years to increase the need for organizations to focus on people as the critical resource. Recognizing that people are the most critical resource in organizations, management must create a common culture that aligns employees to a common goal of the moment while retaining the flexibility to shift to new, more pressing goals demanded by volatile markets (HRPS SOTA/P, 1997).

This article discusses the impact of linking employees to the organization by examining:

1. Types of organizational designs

2. How organizational designs are used to support strategy

3. What are links from organizational design to the individual employees

4. How these links impact different ethnic groups of employees

From a broader perspective, this article examines how executives use organizational design (the macro level) to influence employee behavior (the micro level).

Theoretical Background

This study builds on the theoretical alignment and flexibility concepts of organizational contingency theorists (Galbraith et al., 1993; Lawler, et al., 1995; Nadler, et al., 1995; Overholt, 1996; Nadler, 1999). Recent studies of the HR function (Wright, et al., 1997) also support the need for and the validity of using organizational flexibility and alignment as valid constructs within the organization and its subsystems; however, these are not just academic constructs. Executives have become increasingly comfortable with using this type of thinking as they apply it to global business issues at the turn of the millennium.

Strategic alignment and congruency are the key concepts as outlined by the first contingency theorists (Burns & Stalker, 1961; Emery & Trist, 1965). Simply stated, the major principle of this theoretical base is that organizations must be aligned and congruent to maximize competitive advantage. Alignment and congruence are fluid phenomenons, continuously changing and shifting to fit an ever-changing environment. Organizations that are aligned with their environment and congruent are more efficient and effective. Consequently, the role of executives in any organizational function is to enhance the organization's alignment and congruence.

The basic tenets of open systems theory applied to organizations state that organizations:

1. Are living systems that are ever-changing and adapting to their external environment

2. Are dynamic internally, with all subsystems anticipating, responding, or reacting to changes within the organization

3. Organize around their corporate survival strategy, exploiting and filling niche(s) in the markets

4. …