ORGANIZATIONAL DESIGN

Nicola Melluso

Instructional goals

In today’s volatile world, organizational design is an everyday, ongoing activity and challenge for every executive, whether managing a global enterprise or a small work team, both in the private and public sector. Globalization, worldwide competition, deregulation, digital transformation and ever-new technologies drive the ongoing reassessment of the organization. New organizational forms challenge old ways of organizing for efficiency and effectiveness. Yet, organization still require a formal design, keeping in mind its fundamental ingredients: goals, tasks, decision-making, communication, knowledge and incentives.

Prerequisites

Basic knowledge of business economics and management.

Intended learning outcomes

Knowledge and understanding: The course will offer key theoretical tools to analyze and design the organization and its demands for change in today’s volatile world. Students will acquire knowledge of the fundamental aspects of organization design, which span from the formal structure, goals and strategies, to managing people, leadership, information and knowledge, along with the up-to-date approaches to study organizations. In acquiring the theoretical bases of the organization design, students will be challenged to integrate multiple sources of information (such as: models, research papers, business cases, etc.), in order to build up the ability to critically reason on organizational issues, as well as, to actively research creative solutions. Applying knowledge and understanding: The students will be able to apply the aforementioned sets of knowledge and tools to: • Assess the organizational architecture. • Reflect on issues related to the many aspects of organization design. • Solve organizational problems that can be adopted in different strategic and environmental contexts. In order to build up such skill set, practice sessions will be devoted to the analyses of business cases, relevant research papers, in-class exercises and group discussions. Making judgements: We expect students to be able to analyze organizational architecture, in its many fundamental aspects, to demonstrate an in-depth critical understanding of the scope and challenges of organization design. Students are furthermore expected to be able to discuss and evaluate key issues related to organizational design and organization studies. Throughout the whole course, students will be invited to adopt a critical approach to the topics, to ask crucial questions and to find new and creative solutions. Communications Skills: This course will give the students the possibility to acquire major terms and concepts in order to communicate their ideas, critiques and proposals in the most effective and appropriate way, as well as the ability to interact in operational contexts through specialist knowledge, by integrating diverse sources of information. Learning skills: This course will contribute to empower learners giving them the tools to determine the best possible solutions to organizational problems, to critically evaluate the theoretical models, and acquire independent and critical thinking. Additionally, the course is aimed at developing the ability to search and integrate multiple information, to establish the critical links between research and practice, as well as between theory and its applications.

Course Contents

In this course, we will deal with organizational design as a managerial approach to demands for change in the organization. The theoretical basis is the multi-contingency and information processing approach and its application in defining the contingencies of organization design. In applying this model, we will take into consideration multiple contingencies and their strategic and organizational fits: a fit is a match between the organization and its environment, strategy, technology, management style or knowledge, and information structure. This perspective provides management with an opportunity to assess the organization design and change it regularly. In analyzing all these contingencies, we will focus on the processes and mechanisms, both at the individual and organizational levels. Finally, we will focus on the new perspectives to study organizations – such as organizational neuroscience - by analyzing its benefits and downfalls in organizations studies and by adopting a critical perspective.

Reference Books

• Attending students  course slide and notes  mandatory readings* and cases used during the course (listed on a week-by-week bases). • Non attending students:  mandatory readings/cases* used during the course (listed on a week-by-week bases).  Supplementary reading/cases*, listed on a week-by-week bases (i.e., supplementary readings are mandatory for non-attending students)  Richard M. Burton, Borge Obel, Dorthe Dojbak Hakonsson (2020). Organizational Design: A Step-by-Step Approach (4th Edition). 2020. *Readings that can be made freely available by the instructor will be uploaded as pdf files on the LUISS Learn page of the course on a week-by-week basis. Some readings/cases cannot be made freely available and must be purchased. You can find the course pack to purchase all the mandatory and supplementary reading at the following link: https://hbsp.harvard.edu/import/1260261

Teaching Methods

During the course, the following teaching methods will be applied: • lectures • individual assignments • working groups and case studies • keynote speakers’ presentations • group assignments Practice sessions integrate the theoretical lectures with the analysis of business cases and discussions, exercises and reflection on relevant papers. Students will be required to join practical training sessions and analyze or discuss, individually or within small groups, case studies/readings focused on the resolution of organizational problems that can be adopted in different strategic and environmental contexts. These sessions are useful to evaluate student's ability to put into practice the methods of organizational design and analysis acquired during the lectures.

Assessment Method

ATTENDING STUDENTS – to qualify as an attending you are supposed to attend at least 70% of the sessions, as registered via the Luiss app at the beginning of each session; you are assessed through a variety of methods with the aim to evaluate your understanding (analytical and critical) of the key concepts of the course. The use of AI-based tools is encouraged and favoured to support your learning processes, with the understanding that this course enables you to develop and refine skills to govern such tools and therefore you will attend practice and exam sessions where AI is not allowed and practice and exam sessions where AI is allowed (see below). Your final grade is based on: • Participation and Contribution (10%) – engagement in group discussions and class activities. • Midterm Assignment 1 (25%) – an in-class individual written exercise focused on an organizational design challenge faced by an organisation. Students are not allowed* to use any AI-based tools. • Midterm Assignment 2 (25%) – an in-class individual written exercise focused on an organizational design challenge faced by an organisation. Students are allowed to any AI-based tools following the instructions provided by the course leader and the TAs. • Group Assignment (10%) – Case discussion on an organizational design challenge. Students are not allowed* to use any AI-based tools. • Final Exam (30%) – it consists of an individual, oral discussion on the key themes and concepts illustrated during the course with the course leader and the TAs. NON-ATTENDING STUDENTS: the final grade will be based on a final oral exam (60%) as well as on a written exam (40%) on the extended version of the programme. For the written exam, students are not allowed* to use any AI-based tools. *Exams in which the use of AI-based tools is not allowed will be carried out using the Safe Exam Browser. The use of the software is mandatory. All the instructions for download and installation are available at: https://www.luiss.edu/istruzioni-per-installare-safe-exam-browser. In case of issues during installation, students can get in touch with the IT infrastructure.

Thesis assignment criteria

Master thesis assignment is based on a project proposal elaborated and presented by the student. The project (2/3 pages) must include: • Table of contents • Abstract • Main references •In case of experimental thesis: research questions and experimental design proposal. For an experimental thesis, only quantitative research design will be considered. It is advised to present the project proposal a minimum of 6 months before the planned graduation session. Preferred themes are listed in the section “Thesis Assignment” of the Luiss Learn page of the Organization Design course.

Week 1

THEORY SESSION: • Introduction and general overview of the course. • Designing an organization: the multi-contingency approach to organizational design – diamond model. • Goal & Scope of the organization • Strategy • Analysis of the environment PRACTICAL SESSION: In class exercise – via business case analyses and group discussion - on the analyses of the goal, strategy, and environment of different organizations. WEEK’S MANDATORY READING(S): • Kotter, J., 1995. Leading Change: Why transformation efforts fail. Harvard Business Review: 59-67 https://hbr.org/1995/05/leading-change-why-transformation-efforts-fail-2 SUPPLEMENTARY READING(S): • Laureiro-Martinez, D., Brusoni, S., Canessa, N., & Zollo, M. (2015). Understanding the Exploration-Exploitation Dilemma: an fMRI Study of Attention Control and Decision-Making Performance. Strategic Management Journal, 36(2), 319–338. https://doi.org/10.1002/smj.2221

Week 2

THEORY SESSION: The structure of the organization, organigram and overview of the main organizational forms: • Simple organizations • Functional organization • Divisional form • Matrix form • Pros & cons PRACTICAL SESSION: Face-to-face group discussions, exercises, and practical trainings on the concept of fit in the organizational design in domestic and MNC. WEEK’S MANDATORY READING(S): • Donaldson, L., & Joffe, G. (2014). Fit - The Key to Organizational Design. Journal of Organization Design, 3(3), 38. https://doi.org/10.7146/jod.18424 SUPPLEMENTARY READING(S): • Burton, R. M., Obel, B., & Håkonsson, D. D. (2015). How to get the Matrix Organization to Work. Journal of Organization Design, 4(3), 37. https://doi.org/10.7146/jod.22549

Week 3

THEORY SESSION: New Forms of Organization (1): • Organizing and self-organizing • “Spaghetti Organization” • Agile organizing PRACTICAL SESSION: Face-to-face group discussions, exercises, and practical training. WEEK’S MANDATORY READING(S): • Foss, N. J. (2003). Selective intervention and internal hybrids: Interpreting and learning from the rise and decline of the Oticon spaghetti organization. Organization Science, 14(3), 331–350.https://doi.org/10.1287/orsc.14.3.331.15166 • Spotify's Agile Model: “Scaling Agile @ Spotify” https://blog.crisp.se/wp-content/uploads/2012/11/SpotifyScaling.pdf? • Kao, J. J. (1995). Oticon. Harvard Business Review Press https://www.hbs.edu/faculty/Pages/item.aspx?num=13282 SUPPLEMENTARY READING(S): • Rigby, D. K., Sutherland, J., & Takeuchi, H. (2016). Embracing Agile. Harvard Business Review, 94(5), 40-50. ttps://hbr.org/2016/05/embracing-agile

Week 4

THEORY SESSION: New Forms of Organization (2): • Helix • Teams of Teams • Holacracy PRACTICE SESSION: 28.02 – Session Group 1 – Exam (no AI) 28.02 – Session Group 2 – Exam (no AI) WEEK’S MANDATORY READING(S): • Puranam, P., & Håkonsson, D. D. (2015). Valve’s Way. Journal of Organization Design, 4(2), 2. https://doi.org/10.7146/jod.20152 • Bernstein, E., Bunch, J., Canner, N., & Lee, M. (2016). Beyond the Holacracy Hype. Harvard Business Review, July-Agust. https://doi.org/10.1002/qua.560220720 • Sanner B. & Burdenson S. (2018). The Truth about Hierarchy. MIT Sloan Management Review. https://sloanreview.mit.edu/article/the-truth-about-hierarchy/ SUPPLEMENTARY READING(S): • De Smet, A., Kleinman, S., & Weerda, K. (2019). The helix organization. McKinsey Quarterly, October, 1–10. ttps://www.mckinsey.com/business-functions/organization/our-insights/the-helix-organization this paper can be downloaded by creating a free account • Sisney, L. (2014). An Inside Look at Holacracy https://organizationalphysics.com/2014/03/09/an-inside-look-at-holacracy/

Week 5

THEORY SESSION: New Forms of Organization (3): • Crowd-open organizing • Crowd-based organizing • Pros and cons of crowd-based organizing PRACTICE SESSION: Face-to-face group discussions, exercises, and practical training. WEEK’S MANDATORY READING(S): • Giustiniano, L., Griffith, T. L., & Majchrzak, A. (2019). Crowd-open and crowd-based collaborations: Facilitating the emergence of organization design. In Research in the Sociology of Organizations (Vol. 64, pp. 271–292). Emerald Group Publishing Ltd. https://doi.org/10.1108/S0733-558X20190000064017 • Afuah, A., & Tucci, C. L. (2012). Crowdsourcing as a Solution to Distant Search. Academy of Management Review, 37(3), 355-375. ttps://doi.org/10.5465/amr.2010.0146 SUPPLEMENTARY READING(S): • Hofstetter, R., Suleiman, A., & Herrmann, A. (2017). HRB. Rethinking crowdsourcing. https://hbr.org/2017/11/rethinking-crowdsourcing

Week 6

THEORY SESSION: New Forms of Organization (4): • Ecosystems PRACTICE SESSION: Face-to-face group discussions, exercises, and practical training. WEEK’S MANDATORY READING(S): • Jacobides, M. G., Cennamo, C., & Gawer, A. (2018). Towards a theory of ecosystems. Strategic Management Journal, 39(8), 2255–2276. https://doi.org/10.1002/smj.2904 • Kramer, M. R., & Pfitzer, M. W. (2016). The ecosystem of shared value. Harvard Business Review, 94(10), 80-89. https://hbr.org/2016/10/the-ecosystem-of-shared-value SUPPLEMENTARY READING(S): • Birkinshaw, J. (2019). Ecosystem businesses are changing the rules of strategy. Harvard Business Review. https://hbr.org/2019/08/ecosystem-businesses-are-changing-the-rules-of-strategy • Jacobides, M. G. (2019). The Delicate Balance of Making an Ecosystem Strategy Work. Harvard Business Review. https://hbr.org/2019/11/the-delicate-balance-of-making-an-ecosystem-strategy-work

Week 7

THEORY SESSION: New Forms of Organization (5): • Platforms • Network Effects PRACTICE SESSION: Face-to-face group discussions, exercises, and practical training. WEEK’S MANDATORY READING(S): • Van Alstyne, M. W., Parker, G. G., & Choudary, S. P. (2016). Pipelines, Platforms, and the New Rules of Strategy: Scale now trumps differentiation. Harvard Business Review, 94(April), 54–62. https://doi.org/https://hbr.org/2016/04/pipelines-platforms-and-the-new-rules-of-strategy • Chapter 3: Principles for Designing a Successful Platform, in Parker, G., Van Alstyne, M. and Choundary, S. (2016) Platform Revolution. London: Norton, chapter 3, pp. 35-59. To buy: http://103.44.149.34/elib/assets/buku/Platfrom_revolution.pdf • Daood, A & Calluso C. (2023) What about a non-profit platform? Bringing the right sides together against food waste and hunger. Luiss Teaching Cases. https://luissuniversitypress.it/wp-content/uploads/2023/04/Calluso-Daood_cases.pdf SUPPLEMENTARY READING(S): • Zhu, F. & Iansiti, M. (2019). Why Some Platforms Thrive and Others Don't. Harvard Business Review. To buy: https://hbr.org/2019/01/why-some-platforms-thrive-and-others-dont

Week 8

THEORY SESSION: Organizing for innovation – Guest: Prof. Andrea Prencipe This session focuses on the notion of ambidextrous organizations, i.e., those organizations that manage both incremental and revolutionary changes to foster sustained innovation. It uses real-world cases to explore key concepts in organizational theory, such as routines and organizational inertia, to analyze organizational successes and failures. PRACTICE SESSION: 28.03 – Session Group 1 – Exam with AI PAIR methodology 28.03 – Session Group 2 – Exam with AI PAIR methodology WEEK’S MANDATORY READING(S): • Tushman, M. L., & O’Reilly, C. A. (1996). Ambidextrous Organizations: Managing Evolutionary and Revolutionary Change. California Management Review, 38(4), 8-29. https://doi.org/10.2307/41165852 SUPPLEMENTARY READING(S): • O’Reilly, C. A., & Tushman, M. L. (2011). Organizational Ambidexterity in Action: How Managers Explore and Exploit. California Management Review, 53(4), 5-22. https://doi.org/10.1525/cmr.2011.53.4.5

Week 9

THEORY SESSION: Managing Task & People: • Assess the task structure • Assessing people space • Automatization - deliberation trade-off • Bounded rationality – attentional resources & information processing PRACTICE SESSION: Face-to-face group discussions, exercises, and practical training. WEEK’S MANDATORY READING(S): • Calluso, C., Marino, A., Devetag, M. G., & Prencipe, A. (2024). The key role of visual coordination in the formation of collective routinized actions. Industrial and Corporate Change, dtae039. https://doi.org/10.1093/icc/dtae039

Week 10

THEORY SESSION: Leadership & Organizational Climate: • Leadership styles • Organizational Climate • Assessing the organizational climate PRACTICE SESSION: Face-to-face group discussions, exercises, and practical training leadership & organizational climate. WEEK’S MANDATORY READING(S): • Boddy, C. R., Taplin, R., Sheehy, B., & Murphy, B. (2022). Finding psychopaths in white-collar jobs: A review of the evidence and why it matters. Society and Business Review, 17(2), 217-235. https://doi.org/10.1108/SBR-05-2021-0060 SUPPLEMENTARY READING(S): • Babiak, P., Neumann, C. S., & Hare, R. D. (2010). Corporate Psychopathy: Talking the Walk. Behavioral Sciences & the Law, 28(April),174–193. https://doi.org/10.1002/bsl.925

Week 11

THEORY SESSION: Coordination, Control, information/knowledge systems & Incentives: • Designing coordination & control systems • Tacit vs. explicit knowledge • Incentive structures PRACTICE SESSION: Face-to-face group discussions, exercises, and practical training. WEEK’S MANDATORY READING(S): • Cabrera E. F. & Cabrera A. (2005) Fostering knowledge sharing through people management practices, The International Journal of Human Resource Management. https://doi.org/10.1080/09585190500083020

Week 12

THEORY SESSION: Organizational Neuroscience. Course sum-up PRACTICE SESSION: 09.05 – Session Group 1 – Group Assignment 09.05 – Session Group 2 – Group Assignment WEEK’S MANDATORY READING(S): • Healey, M. P., & Hodgkinson, G. P. (2015). 2. Toward a theoretical framework for organizational neuroscience. In Organizational Neuroscience (Vol. 7, pp. 51–81). https://doi.org/10.1108/S1479-357120150000007002 • Wells J.R. & Weinstock B. (2021) - pymetrics: Early Days - Harvard Business Review. To buy: https://hbsp.harvard.edu/product/720374-PDF-ENG SUPPLEMENTARY READING(S): • Volk, Becker (2015). 1. An Overview of Organizational Neuroscience. In Organizational Neuroscience (Vol. 7, pp. 189–211). https://doi.org/10.1108/S1479-357120150000007001