From Practical Wholes to Parts and Processes in Organizational Design: Three Roads Away from Practical Formal Organization

Early literature on organizational design focused on the practical design of key organizational elements – e.g. strategy, structure, processes, people and rewards – to affect how the organization functions as a whole. However, Herbert Simon’s work introduced a shift in thinking, casting doubt on the assumptions of rationality that underpinned this practical, formal approach. In this paper, we examine three contemporary approaches to organizational design that reflect this intellectual shift. Influenced by behavioural economics, engineering and process theory, these approaches focus on behavioural design, systems design and design thinking, respectively. We show how they all continue the idea of human fallibility from Simon and how this leads to a rejection of the value and possibility of designing the organization as a practical whole.