7LD01 Organisational Design and Development focuses on the principles of organisational design and development to help achieve strategic goals and support organisational success. It explores how change affects organisational structures and considers the process of managing change, where adjustments to structure, processes and people must work together for success. It also looks at how change impacts employees’ working lives and the strategies used to engage staff and other stakeholders in successful implementation. In addition, the unit encourages reflection on the personal skills, techniques and behaviours needed for effective organisational design and development.
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Assessment Questions
Learning Outcome 1: Understand the concepts and theories underpinning organisational design and development.
AC 1.1 Critically evaluate the theoretical basis of organisational design and development.
Organisational design and development (OD&D) draws on a rich and evolving theoretical tradition spanning contingency theory, systems thinking, socio-technical systems theory, and behavioural science. Critical evaluation requires understanding both the contributions and limitations of these theoretical foundations (Cheung-Judge and Holbeche, 2021).
Contingency theory, associated with Lawrence and Lorsch, argues that there is no single optimal organisational structure; rather, the most effective design is contingent upon environmental complexity, organisational size, technology, and strategic direction. This perspective has been influential in moving OD&D away from prescriptive, one-size-fits-all models towards diagnostic approaches that match design to context. However, critics argue that contingency theory can be overly deterministic, underplaying the role of managerial agency and strategic choice in shaping organisational form (Stanford, 2022).
Systems thinking, foundational to both organisational design and development, views organisations as open systems comprising interconnected subsystems that interact with their environment. Senge’s (1990) Fifth Discipline popularised systems thinking in management, while models such as McKinsey’s 7S framework, the Burke-Litwin causal model, and Galbraith’s Star Model operationalise systems thinking by mapping the interdependencies between strategy, structure, people, processes, and culture. The CIPD (2024) emphasises that organisation design theory treats organisations as systems where change in one area causes effects in others, requiring holistic rather than piecemeal intervention.
Socio-technical systems (STS) theory, originating from the Tavistock Institute, argues that optimal organisational performance requires joint optimisation of social and technical subsystems. This perspective has gained renewed relevance in the context of digital transformation and AI adoption, where the interaction between technology design and human work organisation determines organisational effectiveness. Contemporary applications of STS theory inform job design, team-based working, and the creation of high-performance work systems (Holbeche, 2023).
