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What is meant by the concept of organization design?

The following suggested response draws largely on the text material, with some more formal integration of the internal versus external assessment dimensions and more explicit statements about their joint importance.

Organization design is the process of assessing and selecting the structure and formal system of communication, division of labor, coordination, control, authority, and responsibility necessary to achieve an organization's goals. Organization design decisions often require the diagnosis of multiple factors both internal and external to the organization. Organization design represents the outcomes of an assessment and decision-making process that includes environmental factors, strategic choices, and technological factors. An effective organization design should do three things: 
(1) ease the flow of information and decision making in meeting the demands of customers, suppliers, and regulatory agencies; 
(2) clearly define the authority and responsibility for jobs, teams, departments, and divisions, and 
(3) create the desired balance of integration (coordination) among jobs, teams, departments, and divisions, with fast response to changes in the environment. 
To achieve these beneficial results, the external environment must be systematically assessed (including characteristics of the present and possible future environments and their demands on the organization). Organization design decisions often involve the diagnosis of multiple factors, including an organization's culture, power and political behaviors, and job design.
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