While organization design gives your company structure, governance mechanisms are the crucial means by which it functions. They can either hinder or facilitate progress. For the best results, governance should be designed in a way that makes things clear and simple across the entire organization.
The first question to ask (and one of the most difficult to answer) is: who is ultimately responsible for making decisions? As spans of control get looser and teamwork becomes the norm, this can become a challenge for governance mechanisms. In an ideal world, everything would be aligned and decided in a collaborative way, however someone still needs to have the ultimate say when the team is unable to come to a decision. Without clear decision-making power, organizations risk inertia or settling for suboptimal compromises.
Authors: Adithi Raju, Hagen Götz Hastenteufel, Luca Spring, Sarah Helm
Source: Kearney
Subjects: Corporate Governance, Organizational Behavior
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