Summary Report

Organizational design is why we get the tasks given at work. It is why companies decide to make competitive changes. And ultimately, it is why companies succeed or fail. 

We heard this concept from Professor Desai within the first minute of the first lecture. Team C later discussed and agreed that we all thought the statements were hyperbolic at the time. We believed that organizational design was an element, one of many, within the puzzle of managing a successful organization.

Over the semester, we have learned that organizational design is much more than we initially understood. It is a collection of strategies an organization either intentionally implements or passively falls into. Before this course, many of us believed strategies had to be planned. We have come to understand that strategies are simply actions taken to achieve a specific goal. The nuance is that the organization may not even realize those actions taken to achieve a goal. It could be something the organization fell into over time, perhaps because they neglected to be proactive. Let us consider a few examples. 

Imagine an innovative company that emerges onto the market. They proactively take an analyzer with innovation strategy, but over the years of inaction, they slip to a defender strategy and eventually get acquired by another company (Burton et al. 30-34). One company that falls into this scenario is Xerox. They invented the first personal computer but became a household name with their copying machine. While the digital revolution occurred, Xerox stayed still and did not innovate, pushing them into the defender strategy. The irony is that the disruptive product they emerged onto the market with, the personal computer, is primarily to blame for the obsolescence of the Xerox copier (Fifty Brands that Failed to Innovate). 

We can also look at the paradox of success. This concept serves as a reminder that companies frequently go between cycles of being more innovative and less innovative. The theory states that these companies often hire more specialized talent as they become more successful. The organization, overall, becomes more vertically differentiated and takes on a divisional organizational structure. When this happens, innovation and long-term performance typically suffer. To this point, we are classifying what occurred at Xerox. However, the theory continues. To course-correct, the organization must deploy effective integration tactics and become more of a functional organizational structure. This aims to inspire more creativity and innovation within the organization. Examples of companies that experienced the paradox of success are Microsoft and Sony. Xerox and Kodak are among those who needed to adjust appropriately to correct the course and remain successful, but they did not.

We share this detail to build the foundation of the larger concept of organizational design that we took away. This learning goes beyond subject-matter concepts and spans across business and into our daily human existence- now, look who is being hyperbolic. 

Balance is the ultimate requirement for success.

Whether functional success, enterprise success, or life success, the ability to pivot and rebalance oneself is integral to survival. Change is inevitable. It is the only thing that will remain constant and never go away. While departments, organizations, and people do not need to immerse themselves in every change around them, they must remain flexible. Following an emerging trend too soon might end your business. On the other hand, ignoring an emerging trend might also end your business. An example of the latter occurred at Facit, a company that made mechanical calculators. Knut Haanaes shared that within "six months, they went from maximum revenue to being gone." This resulted from not latching on to the emerging automated calculator (Haanaes). 

Being too vertically differentiated is a risk when the thing you do is in an evolving market. However, being horizontally differentiated indefinitely will keep your organization from scaling exploitation. The concept of whether to focus on exploitation or exploration is discussed further in our module 2 discussion. The Paradox of Success shares that focusing too much on efficiency, which typically is categorized as a "good" thing, could be harmful.

In our module three discussion, we examine the benefits of having a well-planned organizational structure that can quickly accommodate a major organizational pivot. We discuss how the Boy Scouts of America shifted their structure to allow girls into their organization. This feat could have disrupted their progress, but it did not because of the Boy Scouts' proactive nature.  

For individual contributors, stubbornness toward a specific idea or way of doing things can harm your career. Within our module eight discussion, we prove that employees must adapt to technological advancements referencing information learned from Nadjia Yousif. She shared that 70% of jobs require at least intermediate-level technical skills (Yousif). If you are an individual who is resistant to technological advancements, you will have to hope either that your work falls into the 30% or navigate yourself to a new position that does. 

Cultural and political forces impacted the general environment of business as a whole. The creation of corporate social responsibility emerged as a solution for businesses' neglect of the stakeholders involved in and surrounding their operations. Many large organizations have realized the need to implement a strategy around a new market expectation of how their business is to be conducted. While some may argue in favor of the Milton Friedman approach to business, where the business's sole purpose is maximizing shareholders' revenues, the market thinks differently. These expectations have caused firms to rebalance their focus to a broader range of stakeholders, not just shareholders. In module seven, we show how Merck's values and corporate social responsibility strategy have one of our team members feeling great about working for the pharmaceutical giant. While in module 9, we explore the effects of the general environment surrounding AECOM's expansion into new markets.

Our hypothesis is that balance is the ultimate requirement for success. Sharing this, we must evaluate if there are any cons to leaving our reader with this definitive message. Our primary concern is that balance should not exist for balance's sake. Said differently, everything does not always need to be in balance. There is nuance behind everything, and perspective is everything. 

If you observe an organization from a macro perspective, you can see that balance does not need to exist in every department. Instead, the organization could be balanced by having some departments run exploitatively while others are more explorative. Balance can be achieved in the aggregate- it does not need to exist within every faction. 

While organizations manage their internal balance, they are impacted by fit between components of Burtons contingency model (Burton et.al. 9). The fit of the organizational components may need to be attended to at the organizational level or at the department level to ensure that a balanced approach can be maximized by the fit across organizations design. 

Throughout this discussion, you will find ten module assignments that integrate concepts learned within the Designing Effective Organizations course. These concepts are then applied to a variety of different organizations. Some organizations are small, while most are large. Many are international, but a few operate only domestically. We used lectures, textbooks, TED Talks, and independent study as reference materials. Our broad scope is very intentional. To examine our learnings throughout the course properly, we should go wide with the organizations we choose and the research we conduct.

To our surprise, when we discovered our hypothesis, we couldn't help but find the irony. We came to this learning by taking a balanced approach. 

#1/10: Module 1, Lecture

Netflix is a well-known company in the streaming industry that revolutionized how people consume entertainment. They initially started as a DVD rental service that rivaled Blockbuster, but Netflix was able to adapt to the changing landscape and not only survive the transition to streaming but become an industry leader (Organimi). They accomplished this by changing their hierarchical structure from a conventional hierarchy to a more flexible organizational design.  

In the early years of Netflix (1997-2007), they primarily focused on mail DVD rentals. They had a traditional vertical hierarchical structure with a clear chain of command and vertical differentiation (Organimi). It was not until 2007, when they launched their streaming platform that they really began to take off and needed to change their organizational structure. As with most technology companies, quick decision-making, and the ability to adapt to market dynamics is critical if you want to survive, and a vertical hierarchy may not be the best structure. A tall hierarchy company in the technology industry tends to have communication problems, more bureaucratic costs, and motivation problems (Jones 237).

Netflix decided to change its organizational structure when it shifted to streaming to have a more agile approach that provides employees with more autonomy, leading to creativity and innovation. With over 12,000 employees (US News), their current structure is a flatter hierarchy of only five levels (Organimi). They utilize more of a team structure instead of rigid departments, which are more like cross-functioning teams that focus on specific projects or goals (Organimi). The teams bring together individuals with diverse experiences to help foster creativity and innovation. This approach enables faster decision-making, enhances agility, and helps attract and retain top talent.  

It is a decentralized structure that allows employees to make quick decisions and be more responsive. Fewer layers of approvals enable teams to act quickly on opportunities and respond to changes faster. They can adjust their strategies and processes faster based on real-time data and feedback. This type of structure helps with employee engagement and motivation when they feel valued and responsible (Jones 127). It increases accountability and builds a culture of trust and freedom.  

A challenge that comes with a flat hierarchy and so many employees is the span of control for the managers (Jones 119). With only five levels within the whole organization, that puts a lot of people reporting to each manager. To help prevent overloading of the managers, Netflix emphasizes a self-management and peer feedback approach. Employees are expected to manage their time, workload, and priorities, while managers act more as coaches and facilitators than traditional supervisors (Databahn). They provide guidance and support to employees but ultimately trust them to manage their work and time. This helps increase employee engagement and ownership and improve decision-making, but it requires a high level of maturity, trust, and self-discipline.  

Adopting a flatter, more flexible organizational structure has yielded positive results for Netflix. Not only has their subscription base continued to grow, but their quality content production and innovation have kept pace with viewership. If they did not change to a flatter structure when they did and focus more on streaming, then they would have followed the path of Blockbuster to bankruptcy. Instead, they focused on innovation, agility, and empowerment of their employees to cultivate a creative culture that has been able to withstand many new competitors and an ever-changing landscape.  

#2/10: Module 2, TED Talk by Edward Tenner

Richard Burton explains that shaping how a company is structured is an ongoing process. "Organizational design is an everyday, ongoing activity and a challenge for every executive, whether managing a global enterprise or a small work team" (Burton et al. 3). It involves making both small routine changes and occasionally big ones. This is something for more than just top-level executives; it affects everyone in the company. Globalization, tough competition worldwide, less government control, a greater focus on sustainability, political risks, and always-changing technology like digitalization, artificial intelligence, robots, and machine learning push companies to keep redesigning themselves, says Burton. 

But what does all this mean? Efficiency, as defined by the dictionary, is getting the most done with the least effort and expense. So, organizational structure aims to help a company reach its goals and help workers do their jobs well and quickly. Being effective means focusing on what the company produces and how much money it makes, while efficiency looks at how resources are used and how much things cost.

In Module 2, Professor Desai emphasized that while making a good organizational structure is not easy, a well-designed one leads to considerable success, making money, happy employees, and satisfied customers.

Executives everywhere want workers who can get things done fast, meet deadlines, and handle pressure in a fast-changing work world. Efficiency is the top priority. "Efficiency is a primary focus on inputs, use of resources, and cost" (Burton et al. 17). 

However, is there a downside? What is the cost of being efficient? 

Sometimes, being too efficient can backfire. Let us look at the supply chain department within the General Electric family of companies as an example. GE is a large international company in many global markets: Energy, Healthcare, research, and Aerospace. GE Healthcare's supply chain department is set up to help workers do their jobs well and quickly. This department aims for digital transformation and better data use. They have started a team to focus on using digital tools to work better. They have bought software and digital tools to help workers be more efficient. But not everyone is ready for this big change. Some workers are having difficulty adjusting to new technologies, and some feel overwhelmed. Like many others, the company cares a lot about getting things done quickly and cheaply. They should focus on simplification first before they go to optimization and understand that this process takes time. "Structural changes or design changes can on paper be effective immediately, but to implement a complete organizational redesign involves much more and will take time," says Burton. 

In his TED Talk, "The Paradox of Efficiency," Edward Tenner says that being too obsessed with efficiency can make us less efficient. In today's world, technology, data, and algorithms are super important. However, if we focus too much on efficiency, it can actually hurt us. Tenner suggests we consider seven ways to be inefficient in a good way:

Take the scenic route: Sometimes, getting a little lost can help.

Get up and do things yourself: In a world of smart devices, sometimes it's better to do things ourselves.

Learn from mistakes: Mistakes can teach us valuable lessons.

Embrace challenges: Sometimes, doing things the hard way is worth it.

Value diversity: Having people with different backgrounds helps us adapt to change.

Plan for backup: Have a plan B in case things go wrong.

Embrace a little inefficiency: Sometimes, following a less direct path can be the best way forward (Tenner).

#3/10: Module 3, Burton Chapter 1

The Boy Scouts is an organization that was founded in Britain in 1908. Robert Baden-Powell took several fragmented organizations functioning as youth military and religious-based throughout England and merged them into a unified youth organization that provided education and recreation while simultaneously providing a civil defense watch and training ground for the next generation of military and civilian leaders ("Research Guides: Boy Scouts of America (1910-1922): Topics in Chronicling America: Introduction"). The organization aims to prepare young people to make ethical and moral choices over their lifetimes by teaching a core set of values. The global organization must help foster and support wildly diverse cultural backgrounds and societal beliefs while driving for international unity in the full vision of the organization ("The Boy Scouts of America's Mission, Vision, Aims, and Methods - Troop Leader Resources").  

The Boy Scouts are organized by an international body coordinating efforts globally and organizing events where different international groups can meet Scouts from other parts of the world. This World Organization of the Scout Movement (WOSM) governs and guides 170 national scouting programs ("World Organization of the Scout Movement | WOSM"). Within the various countries, there may be regional or cultural subsets that must be accommodated or managed. As of 2019, the Boy Scouts allowed girls to join the organization and rebranded as Scouts BSA.   

A global organization with a diverse participant base must look critically at the objective it wishes to accomplish while determining how to divide tasks to make a globally consistent program that is inclusive and tailored to meet each regional need. Communication and command structures must be established to allow for effective and efficient operations coordination (Burton et al. 6). Every organization must perform this critical evaluation as a basic step in becoming an organization, regardless of whether it is a commercial or volunteer-type organization (Burton et al. 4)

The Scouts BSA approach to organization is fairly unique. As a group that focuses on developing and training leaders, they begin at a low level, with each group of 5-10 scouts forming a patrol. Each patrol has a Patrol Leader who serves as the manager for the group and reports upward in the organization. Each patrol member takes orders directly from their Patrol Leader. Thus, a chain of command is established. The various patrols report to a single Senior Patrol Leader who is responsible for coordinating the patrols to accomplish a shared goal. The Senior Patrol Leader reports to the Scout Master and relays information from the patrols while receiving general instructions on what needs to be accomplished. The Senior Patrol Leader then relays the vision to the Patrol Leaders and delegates tasks to each patrol to balance work and achieve goals. Collectively, the patrols and the Scout Master form a Troop, the primary functional unit within scouting. The Troop typically serves a town or portion of a town and captures the local customs and culture to form a unique group of individuals. Using Burton's Multi-Contingency Model (Burton et al. 8-10), the organizational design basis consists of the following: 

Goals and Scope: To prepare young people to make ethical and moral choices over their lifetimes by instilling in them a core set of values ("The Boy Scouts of America's Mission, Vision, Aims, and Methods - Troop Leader Resources"). 

Strategy: Produce a social organization with a strong tradition of community service and a focus on outdoor recreation. 

Environment: A market filled with other activities and distractions but a society needing disciplined youth. 

Configuration: A hierarchical structure with semi-autonomous low-level organizational units with common goals but unique operational habits. 

Task Design and Agents: As an organization, tasks are performed at several levels, and executing those tasks at the lower levels is intended to develop the individual's skills further. As Burton says in Chapter 6, "The individual's knowledge is the basis for what they can do." Tasks performed are intended to broaden the knowledge basis. Where youth participants cannot perform tasks, the organization assigns responsibilities to a higher leadership level.

Leadership: Largely volunteer in nature, the leadership would be based on local community values and report up a chain of command to a central leadership core that made broad decisions on policy and values while letting each unit operate largely as they saw fit. 

Climate: As a recreational activity, there was little competition other than sports and leisure. Society was very receptive to the values and the individuals completing the program. 

Coordination and Control: A central governing body setting policies, distributing communications, and coordinating core functions such as fundraising, advertising, community outreach, and camp facilities. This body trickled down to tiers of local coordinating bodies and ultimately to the local units while needs and feedback were sent back up the chain. Handbooks, periodicals, and newsletters initially formed the backbone of communication systems but have been updated with electronic systems.

Incentives: Rank systems for the core of the incentive program, but the experiences and knowledge gained in activities also provide a strong incentive. 

Given the youth focus of Scouts BSA and the frequent travel involved, the patrols are rarely at full strength, and the patrol capabilities are potentially diminished. The Senior Patrol Leader has the authority to combine patrols and re-assign the members to help balance the load. This dynamic structure allows the Troop to adjust quickly to changes while additionally providing the Senior Patrol Leader with leadership responsibility and authority that closely matches those in a corporate or other command structure.   

There may be a reason to combine troops with low levels of scouts into a single combined troop for a specific occasion or challenge. Under these conditions, the rank system comes into play, and the Senior Patrol Leader with the highest rank must assume command of the patrols in their Troop along with those of the partner Troop. The institutional controls of a common set of core values, a consistent command structure, and a rank system that instills confidence in the attained knowledge and experience of near-peer leadership allow the Scouts to fall into the modified system without conflict or confusion. The Scout Master of the combined Troop knows that the Senior Patrol Leader will still consistently carry out instructions and manage the scouts as if they were part of the same Troop. 

One significant exception to this setup exists. With the arrival of girls in the Scouts BSA organization, it became necessary to segregate girls into their own Troops. The same structure exists, and the girl Troops can merge with boy Troops with a caveat that campsites and sanitary facilities must be separate (Trumbull).   

Additional layers of command and coordination are in place above these low-level groups to provide guidance. The organization more closely resembles a traditional hierarchy and corporate structure in these upper levels ("World Organization of the Scout Movement | WOSM"). 

This organization setup was specifically tailored through careful thought and research to function almost exactly how the Special Forces operate within the armed services. By creating a highly adaptable unit with localized leadership and common guiding principles, the Scouts BSA has created an organization that can adapt to any challenge. Units can be scaled up or down based on environmental variables to face unknown challenges. Through this structure, the individual scouts learn about designing their organizational structure, planning for challenges, and managing groups of individuals toward a unified goal. Coupled with a shared vision, the very design of the organization achieves the goal of teaching kids how to be leaders and valuable members of society.   

#4/10: Module 5, Burton Chapter 8 

The Colorado Education Initiative has existed for 12 years as a non-profit organization serving schools and school districts across Colorado. The organization grew through the support of national philanthropic organizations such as the Bill and Melinda Gates Foundation. These large national funders supported the organization in growing quickly and forming a product division model organization with little integration across divisions (Jones 177). As national funders began to urge the organization to move to more sustainable funding and began to reduce and eventually discontinue funding, a lack of diversification threatened the organization's ability to stay open. As a result, the organization shrank from around 50 employees to under 20. The organization's new leadership focused on entrepreneurship and innovation to keep the organization viable and relevant in the marketplace. At this point, the organization's goal was to build credibility in the consulting and philanthropic grant funding markets. To build credibility with clients and funders, the organization developed a focus on effectiveness or a focus on outputs, products, or services rather than the use of resources (Burton et al. 17). With a limited runway, the leadership took a bet on building a diversified portfolio of work rather than a conservative efficiency approach that might have slowed the slide into bankruptcy because the efficiency of resources used would have led to a lack of risk-taking and innovation. When organizations focus on efficiency, their design focuses on a defender strategy, which, according to Burton, focuses less on new ideas and innovation (Burton et al. 32). This strategy resulted in a limited share of the market and limited visibility in the philanthropic community.  

As the company shrank, the organization's leadership made bets on team members that, they believed, would function well in a more entrepreneurial command and control strategy. For the organization to build its reputation and develop the quality of its services and relationships in the market, the team would be organized in a market model of coordination. This meant organizational behavior was managed and organized primarily through norms and values rather than highly regulated rules and structures. Decision-making about approaches, strategies, and selection of clients was highly decentralized. The services provided to clients were also designed in small teams that were made up of team members from across the organization. As Burton describes, "sub-units police themselves and/or work with other sub-units as driven by informal norms" (Burton et al. 161). This approach to coordination in the organization relied on a culture of ownership and trust across teams and individuals. The information processing systems within the organization relied on agent-based information processing in which team members would connect based on relationship, trust, and opportunity (Burton et al. 167). 

The strategy of this organization succeeded as the services were tailored to the client's needs, and relationships were built with clients and philanthropic organizations in the field. The organization has now doubled in size, developed more targeted markets, and developed a more balanced portfolio of philanthropic and earned revenue. As this organization grows, its senior leadership is working to move to more formalization but seeks to maintain a decentralized decision-making structure. This would call for the organization to strive to develop an organizational coordination and control design that aligns with the mosaic structure. According to Burton, the mosaic model creates coordination and control systems that are not identical across the organization (Burton et al. 163). Ideally, this model will allow the organization to differentiate formalized structures and rules based on the pace and scope of the organization. This model provides teams that manage projects with unique types of contracts by leveraging unique rules and structures that best support their work. 

As an organization like the Colorado Education Initiative grows, changes, shrinks, and grows again, changes to the organizational structure are not the only consideration in the organization's design. Developing a fit between the organization's goals, strategy, and coordination and control structure is an essential design principle as they change. For CEI, engaging deeply with the organization's goals, strategy, and coordination and control design will yield much more significant results and transformation when taken together.  

#5/10: Module 7, Lecture

Merck is an American pharmaceutical company with a market capitalization of approximately $324B (Merck & Co., Inc.). In North America, the company is known as Merck, while in the rest of the world, it is referred to as MSD. The company deals in biologics, biotherapeutics, and small molecules that cover the health areas of oncology, immunology, infectious diseases, and cardio-metabolic diseases. 

Merck's success can be attributed to its effective organizational culture. The company was recently named to the top spot of Newsweek's annual list of America's Most Responsible Companies (America’s Most Responsible Companies 2024). Merck's strong organizational culture is embedded in its corporate social responsibility (CSR). According to Merck's leadership, CSR at this company mainly focuses on sustainable value creation, including four focuses. These focuses are expanding access to health, protecting the environment, promoting diversity and inclusion in the workplace, and conducting business operations with the highest ethical standards and values.

According to the company's most recent impact report, a few years ago, Merck set a goal to have more than 100 million people access health care through its innovative strategies and partnerships by 2025. However, the company announced that it surpassed that goal in 2022. The company achieved this milestone by investing almost $14B in scientific discoveries to help address global challenges of preventable and curable diseases (Impact Report 2022/2023). Similarly, Merck has been conducting a philanthropic program called the Mectizan Donation Program for almost four decades. The objective of this program has been to donate Mectizan, a drug that treats river blindness and elephantiasis, diseases common in developing countries (Working with Partners to Achieve a Future Free of River Blindness & Lymphatic Filariasis).

In the 21st century, governments, nongovernmental organizations, and businesses are committed to combating the global climate crisis. To this end, Merck has been promoting local waste-diversion strategies, composting & recycling, and environmentally friendly procurement practices. Additionally, they have been at the forefront of promoting diversity and inclusion across the globe where the company operates. Their code of conduct lays the foundation for how the company does its business. At Merck, all employees are required to adhere to the highest ethical standards and values. The company also ensures compliance with regulatory requirements and encourages its employees to speak when there is a breach of its code of conduct (Impact Report 2022/2023). 

In the module 7 lecture we learned about the positive cultures of Ben and Jerry's Ice Cream, and Southwest Airlines. We also learned about how culture led to major stakeholder issues at NASA and Union Carbide, and the ultimate demise of companies like Enron. Having firsthand experience as an employee of Merck, I recognize that they live their values and mission. Merck has maintained its effective culture by taking a proactive approach in CSR.

#6/10: Module 8, TED Talk by Nadjia Yousif

Organizational climate depends on how a company interacts with and uses technology. If employees are not interested in using a tool to its potential or to get the most benefit, an organization's climate becomes rigid, and it creates a lot of tension and resistance to changes. "For those companies that have not yet adopted emerging technologies, tension is likely caused by the uncertainty of what it may entail" (Burton et al. 139).

The TED Talk delivered by Nadjia Yousif explores a critical aspect of organizational dynamics: the intricate relationship between the organizational climate and the effective utilization of technology. This topic has been previously discussed in our coursework. This segment sheds light on how employee engagement with and proficiency in utilizing technological tools not only shapes the organizational climate but also lowers tension caused by uncertainty and significantly impacts the organization's receptiveness to change. "The low tension in a group climate could make them less suspicious if management were to introduce emerging technologies to them." (Burton et al. 141). Here, we embark on a comprehensive exploration of strategies aimed at enhancing this pivotal relationship.

Nadjia Yousif begins by elucidating how businesses of all sizes can optimize their technological investments by empowering employees to proficiently leverage the diverse array of tools they encounter in their daily tasks. She captivates the audience with a staggering statistic: in the contemporary landscape, a substantial 70% of jobs require at least intermediate-level technical skills. This revelation underscores the critical importance of adeptly interacting with technology tailored to streamline job roles. When employees struggle to harness these technological advancements effectively, it mirrors the discord among colleagues whose interpersonal conflicts impede collaboration. However, effective cooperation remains indispensable for achieving collective organizational goals irrespective of personal differences (Yousif).

This principle of collaboration extends seamlessly to the realm of technology; optimal customer service and operational efficiency demand viewing technology as a tool and a collaborative partner akin to the team-building exercises conducted among colleagues. Yet, within my organization, GEHC, proactive measures to foster this symbiotic relationship between employees and technology are noticeably absent. We deal with many different types of technology tools, and many of their functionalities still need to be explored. The resultant complexity often dissuades individuals from looking deeper into their capabilities and getting help from AI is becoming an unavoidable necessity. This challenge resonates with the information processing hurdles delineated in the Burton textbook.

The notion of treating technology as an employee is abstract and undeniably intriguing. Nurturing familiarity through dedicated exploration allows for seamless integration into workflows, thereby enhancing organizational efficiency and maximizing returns on technological investments like AI. 

Building upon Nadjia's insights, the concept of conducting regularly scheduled employee reviews centered on technology utilization emerges as a valuable strategy. Key questions posed during these reviews may encompass assessing the compatibility of existing technologies with other systems, evaluating alignment with expectations, and devising strategies for managing potential technical overload within departments. It becomes abundantly clear that an organization's design must inherently account for technology as an integral partner; failing to comprehend its intricacies hampers the organization's ability to function optimally. Encouragingly, discussions initiated with GEHC's leadership regarding these concepts have yielded a positive reception. Moving forward, I am committed to leveraging insights learned from the TED talk to devise innovative strategies for technology exploration. Moreover, I endeavor to embed these principles into various facets of organizational design, including collaboration team formation, AI software implementation, and navigating organizational change management processes.

#7/10: Module 9, Burton Chapter 3

AECOM is one of the world's largest architecture, engineering, and design firms. The company generates over $14B annually with a mix of services ranging from transportation, water, energy, environmental, healthcare facility design and construction, government services, disaster relief, and logistical services. The company operates the core AECOM brand to provide architectural and engineering services along with AECOM Capital to provide investment and real estate development. AECOM Hunt is for large-scale construction operations, including stadiums and hospitals, and AECOM Tishman is for megaprojects, including residential, mixed-use, and historic renovation projects ("About us"). 

The birth of AECOM was a conglomeration of the intellectual property and knowledge of the various engineering support services of Ashland Oil and Refining Company in 1910. The construction and engineering portions of the Ashland Oil & Refining Company were consolidated under a holding company as Ashland withdrew from the oil industry ("Who the hell is AECOM"). Ashland protected the intellectual property they had developed by sheltering the knowledge under the holding company ("AECOM Technology Corporation - Company Profile, Information, Business Description, History, Background Information on AECOM Technology Corporation"). 

Initially, the group operated in a single domain by providing services to Ashland as a single client. In 1984, Ashland purchased a company specializing in transportation and engineering services focusing on military projects, which increased the company's domain. Ashland moved back into the oil production market in the late 1980s and spun off the Architecture, Engineering, Construction, Operations, and Management (AECOM) divisions as a separate company. The new AECOM group began acquiring engineering, planning, and design firms and began growing. Each company operated independently under a single corporate holding company umbrella and provided services to clients across the United States and abroad (Celebrating AECOM at 25) ("FACT SHEET"). 

As the company expanded into new markets, it encountered unique environmental conditions such as the global political climate, demographic and cultural pressures, economic forces, and a diversified regulatory framework. The daughter companies developed as distinct vertical organizations, each dedicated to a specific environment consisting of geography, services, and client bases. The environmental factors for each business line were unique, and there was only a moderate level of interdependency between the lines.

In 2007, the company went public and consolidated all daughter companies under a unified brand name. This dramatic shift was necessary to build brand recognition for the shareholders and to streamline the company to drive efficiencies, reduce costs, enhance integration, and maximize profits. A significant benefit of this shift was the seemingly overnight market domination from a previously unknown brand that sprang, fully formed, into the global stage. In going public, the company could quickly draw large amounts of capital to purchase new subsidiaries in complimentary services or buy out competition. This type of rapid expansion was not possible using the limited resources and policy constraints of venture capital backers or banks.

Analysis of the corporate structure shows that the company is clearly multidivisional, with a fragmented task design for projects in each divisional structure (Burton et al. 124). Each division is highly specialized and, in governmental cases, compartmentalized with restricted knowledge of programs, structures, and clients.

As a global firm, AECOM is subjected to dynamic conditions worldwide. Financial cycles, pandemics, political conditions, and international finance trends weigh heavily on the company. Each division faces the challenge of competition and must be a highly competitive and efficient entity within its marketplace. Consolidations in the architecture and engineering field are frequent, and mega companies have become commonplace. Competitors draw heavy investment from venture capital firms, and constantly reassessing trends and risks is needed to fend off competition. Uncertainty is a major fact of life. This potential risk is mitigated by diversifying the business divisions, splitting off risk under certain subsidiary companies to isolate the core services group, and fostering strong integrated teams within the divisions to focus on localized needs ("About us"). 

Looking at the company using the environment space matrix presented in Figure 3.1 of Burton, the company simultaneously operates divisions in each of the four quadrants. However, when the operations are reviewed as a whole, they are relatively "calm." The complexity within each division is relatively low, and operations become predictable within the realm of that division. This diversification and modularity help stabilize the larger company in uncertain times. Each division monitors the threats and market trends while a corporate-level oversight role performs backup analysis with an eye toward strategic acquisitions. Locally stormy environments may present an opportunity despite being disruptive to the division.  

A major downside to public investment in the firm is the need to maintain low overhead in the event of significant market downturns. Reactionary management has seen profits drop by ten percent and made corresponding ten percent reductions in the workforce in direct response. These downsizing events have made the firm unattractive to talent and made recruiting difficult ("Who the hell is AECOM"). The firm has routinely paid suppliers and vendors regularly and has maintained relations with vendors, enabling them to team up and form strategic alliances or joint ventures in response to new opportunities. This exploitation and new work attracts new employees and provides fresh ideas within the company ("FACT SHEET").  

 #8/10: Module 10, Burton Chapter 9

Chapter nine explores incentive plans, their theoretical background, and their potential impact on employee behavior and organizational performance. Throughout the chapter, Burton ties back incentive plans with motivational theory and understanding employee behavior. Incentives help motivate employees, prevent dissatisfaction, provide a sense of belonging, and fuel engagement and performance (Burton et al. 178). While it is easy to state that incentives are crucial to company culture and overall performance, it is much harder to implement an effective plan, a feat only some organizations have mastered.  

Google (Alphabet) has a reputation for uniquely engaging its workforce using different intrinsic and extrinsic methods. First, they offer a competitive base salary, which is crucial to addressing job security and the basic needs of employees (Riberolles). A competitive salary reduces potential dissatisfaction and turnover within the company. Next, the company offers performance-based bonuses, which are meant to reward exceptional performers (Riberolles). The bonus is based on three employee variables: their job position, their performance, and a multiplier rate that can be 15% or more of the fixed payroll (Riberolles). Finally, Google also offers a stock option program in which employees are granted stock as an incentive to help build company value. These stocks will vest over time during the employment period.  

A second element of Google's incentive programs is workplace benefits. These perks include free meals, onsite amenities such as laundry, generous parental leave, and education reimbursement, among many other things (Google). They offer free lunch every day, along with snacks throughout the day. By addressing some non-financial, extrinsic incentives, Google helps enhance employee well-being, satisfaction, and loyalty to the company, which helps drive engagement and productivity.  

In addition to the extrinsic incentives, Google also offers an array of intrinsic incentives to motivate its employees further. First, they have a "20% time" policy, which allows employees to pursue personal projects up to 20 percent of their time, which they think could benefit the company (Murphy). This policy has successfully improved employee satisfaction and helped advance Google with new tools such as Google News, AdSense, and Gmail. This 20 percent policy also helps empower employees' decision-making and foster a sense of control and ownership over their work, which is vital for most employees. 

Another incentive program that Google offers is a peer-to-peer recognition program. This program allows peers to send a small bonus to other employees who have helped contribute to Google's development (Riberolles). This program helps highlight contributions by others and provide feedback to peers, which encourages individual growth and development, another way that Google fosters a motivational environment.  

Google's incentive system is a multifaceted approach that cultivates a highly engaged and productive workforce. It clearly demonstrates how to fuel innovation, motivate employees, and reduce turnover in a highly competitive, challenging market. While none of their approaches are groundbreaking to employee incentives, the combination and consistency of all of them show consistent leadership and a drive to create one of the top companies in the world. They care for their employees and want to cultivate growth and innovation within the company. Because of these incentives, Google has been able to be at the forefront of technological advancements and stay an industry leader. 

#9/10: Module 11, Lecture

Merck is an American pharmaceutical company with a market capitalization of approximately $324B (Merck & Co., Inc.). In North America, the company is known as Merck, while in the rest of the world, it is referred to as MSD. The company deals in biologics, biotherapeutics, and small molecules that cover the health areas of oncology, immunology, infectious diseases, and cardio-metabolic diseases. However, between 2004 and 2005, the company found itself in a critical situation that warranted urgent organizational change. 

In 1999, Merck introduced Vioxx as a safer alternative to the non-steroidal anti-inflammatory drugs for treating osteoarthritis (Krumholz et al.). By 2004, however, it was discovered from a series of studies that the drug doubled the chances of heart attack and stroke in patients who had been taking the drug for almost two years (Krauskopf). It is worth mentioning here that during the clinical trials of Vioxx, it was found that the drug reduced the urinary metabolites of prostacyclin, a chemical that inhibits platelet activation in healthy volunteers, by half (Krumholz et al.). Unfortunately, Merck did not stop any further clinical studies from taking place, and the company did not disclose this information to the government regulator. Following this, Merck was forced to pull Vioxx from the market, and the company was hit with lawsuits from regulators, patients, and their families. As the New York Times reported, Merck’s stock had fallen by 40% since Vioxx had been recalled two months earlier. This lowered the company’s market value by $50B (Berenson et al.). Owing to these happenings, the company was in a full-blown organizational crisis, and organizational change was needed.  

According to Lewin’s Theory of Change, leaders at Merck had to increase forces for change in the company. To this end, in May 2005, Merck’s board of directors appointed Richard Clark as Chief Executive Officer (CEO) and President. This forced Raymond Gilmartin into retirement (Smith). Six months later, Mr. Clark announced various strategies he would implement in the company to mitigate the consequences of the Vioxx crisis Merck was facing. These strategies included reducing Merck’s workforce by 11%, closing five manufacturing plants, restructuring Merck’s salesforce, and implementing a new supply strategy (Merck’s hard choices).  

The Vioxx crisis forced Merck to undergo organizational change to enable the company to deal with the consequences that ensued. As presented by Lewin’s theory of change, the forces for change at Merck during this period were ethical, economic, and political/regulatory forces. Merck did this by appointing a new CEO who, in turn, implemented new strategies that were aimed at helping the company overcome the Vioxx recall crisis.  

#10/10: Module 12, TED Talk by Adam Grant

3M is a company that has been celebrated for its innovation and has received awards and recognition for its innovative structures for decades. How does 3M create and sustain innovation at such a consistent pace? Adam Grant shares his interpretation of the habits of original thinkers in his TED talk “The Surprising Habits of Original Thinkers.” These three habits are procrastination, embracing doubt, and embracing failure (Grant). Each of these habits can be seen in the approaches and structures that 3M has created to encourage and incentivize innovation at their company. 

Adam Grant says, “Originals are late to the party.” He discusses that those who take time to think, explore, and leave space for breakthrough ideas are more likely to develop innovative creations. (Grant) The practices employed by 3M to incentivize procrastination focus on providing the time and space to think, engage with product users, and iterate on designs to ensure innovation thrives. One of these structures is offering employees seed capital to develop company ideas. Grant says that “original thinkers are fast to start and slow to finish” (Grant). 3M inventors can pitch ideas to product managers in different divisions for their work or access a “Genesis Grant” to fund their work (Govindarajan 7). These funding sources provide the resources needed to explore, think, test, and design breakthrough innovations for the company.

Grant also discusses self-doubt versus idea-doubt. He says that original thinkers motivate themselves by doubting ideas (Grant). “The Innovation Mindset in Action: 3M Corporation” discusses the innovation strategy at 3M and states that “3M also has a rich tradition of telling the stories of famous failures that subsequently created breakthrough products” (Govindarajan 7). One of these stories is about the development of the Post-it note. After the failed development of a strong adhesive to attach airplane parts, an engineer watched a man who would always lose his bookmarks struggle to keep his page. The engineer doubted the idea that a weak adhesive had no use and moved forward with testing and developing the Post-it note (Govindarajan 7). This narrative and storytelling within the organization creates a culture of doubters that any failure is the end of a product. This cultural feature at 3M encourages original thinking by building the habit that employees should not doubt themselves but doubt ideas. According to Grant, this keeps original thinkers moving forward, not paralyzed and sitting on the sidelines (Grant).

Finally, Grant discusses that original thinkers embrace the fear of failing and try many ideas to find breakthrough ideas (Grant). At 3M, “engineers and scientists can spend up to 15% of their time pursuing projects of their own choice, free to look for unexpected, unscripted opportunities, for breakthrough innovations” (Govindarajan 7). By providing all employees with opportunities to try and, in many cases, fail, the company expands the opportunity to find breakthrough ideas. The more being tried at 3M, the more chances the organization has to find the next breakthrough product that will move it forward. 

3M’s commitment to innovation is impressive. It is an example of how a commitment to innovation can drive the structure and design of an organization, from its incentive structures to its coordination and control strategy and beyond. 3M demonstrates a strong fit between its goals of exploration and exploitation and its strategy of being an analyzer with innovation. This means that the organization has a more centralized and formalized structure but also has structures to decentralize decision-making and deformalize rules to ensure that innovation is thriving in the company (Burton). These are supported by creating systems and structures to incentivize innovation and create a culture of innovation by supporting the habits of original thinkers.  

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