Organizational Architecture Definition

The organizational architecture is a description of the systems existing in the organization. Each organization has a lot of systems in place, some of them are extremely formal and many are informal and they are not described in any official document. The organizational architecture describes the systems, which make the organization living organization. The ability to design, develop, integrate and use such organizational systems is the basis for the efficient organization.

The organizational architecture is about creation of roles in the organization, processes to handle inputs and outcomes and formal reporting lines in the organization for the management purposes. Traditionally, Human Resources is expected to play a significant role in the organizational architecture and for HR Business Partnering concept, the organizational architecture is extremely important as the HR Business Partner can provide the regular consultancy to the business leaders and managers.

There are many models describing the organizational architecture around us. The most classical ones are the Star Model by Jay Galbraith and 7-S organizational architecture description by McKinsey.

The Galbraith’s Star Model describes 5 most important factors of the efficient organizational architecture:

  1. Strategy
  2. Structure
  3. Business Processes and Lateral Links
  4. Rewards Systems
  5. Human Resources Management

The McKinsey’s 7-S organizational architecture model describes 7 factors of the successful organizational architecture:

  1. Strategy
  2. Structure
  3. Systems
  4. Staff
  5. Style
  6. Skills
  7. Super ordinate Goals/Shared Values

In both models, there is a huge responsibility of Human Resources as in both models, HR Role is significant and has a significant impact on the efficient organizational architecture and operation of the whole organization. The competitive advantage always starts with the winning organizational architecture and HR Business Partner is a key player in the setting of such an organizational architecture.

The HR Team has to understand the theory of the organizational design as they can play a useful role in the creation and design of the new architecture. Without the theory behind, the advices given are just based on the gut feeling and they cannot be respected by the internal clients.