Organization Design vs. Manager Effectiveness

by: Dwight Mihalicz

When your organization wants to step things up a notch, it can be difficult to define the type of assistance that would best suit your needs. How do you distinguish if your organization needs an organization design consultant or a management effectiveness consultant? The answer is that while they are closely related; it really comes down to approach.


Organization design deals with the vertical and functional alignment of positions within an organization. It concerns the spine of the organization, and how positions are aligned, both vertically, and cross-functionally. Organization design helps to define and focus employees on the important and essential aspects of their roles; it creates efficiencies by eliminating duplication or overlap, and increases productivity. Research shows that better organization design is related to better employee satisfaction, customer satisfaction and financial performance.

By embarking on an organization design review, your management systems will likely be more effective because your positions will be aligned. When you have the right number of layers, the right functions, and the right people in positions, managers will be able to work more effectively.

Your organization may need organization design if some of the following occur:

  • There are changes in the marketplace that require the organization to change significantly, in order to remain competitive
  • Customers’ or suppliers’ needs change
  • You need to reduce costs
  • You need to increase your output
  • Your business is growing, perhaps by creating a new company or division
  • There are major changes in the business strategy

Management Effectiveness

In management effectiveness consulting, the CEO probably feels that the company’s organization design is OK, but feels that there is room for improvement in the way work is done. Effective Managers Inc. examines the manager-subordinate relationship, identifies ways to improve the effectiveness of that relationship, and how that relationship ensures that all things in the organization are coming together to support the most effective managers possible.

Your organization may need management effectiveness consulting if some of the following occur:

  • Top-level decisions are not being consistently implemented through to the front line
  • There is conflict between managers in different parts of the organization
  • A silo mentality is predominant instead of a company-first mentality
  • The company wants to create efficiencies
  • There are inconsistent work practices or workflow
  • Accountabilities and authorities are not clear
  • Projects are consistently running behind or over-budget

Sometimes in conducting manager effectiveness studies, it becomes apparent that a root cause of the issues is a faulty organization design, in which case I recommend an organization design review to the CEO. In other cases, the design is sound, and improvements to manager effectiveness can yield excellent results.

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