IBES2260 Organizational Design (5 cr)

The organizational design course will help students understand how to gain and sustain a competitive advantage by configuring organizational designs in innovative ways. Rather than focusing only on structures, reporting lines, or organizational charts, the course asks how organizations can be designed so that people cooperate effectively, decisions are made responsibly, risks are governed fairly, and waste is reduced without undermining long-term value creation.

The course is based on Ketokivi and Mahoney’s Efficient Organization: A Governance Approach. The book introduces a governance-based approach to organizational design, including the Efficiency Lens of management, oversight, and risk. Key topics include sustainable efficiency, organizational coordination, decision rights, oversight and accountability, organizational boundaries, contracting within and across organizations, stakeholder relationships, nonprofit and public organizations, startup governance, organizational growth, and the persistence of inefficient routines in mature organizations. Students will learn how these topics are connected and how design choices shape the viability and effectiveness of organizations.

The course is completed as a book-exam-based independent study course. Students are expected to read the assigned book carefully and prepare for a three-hour essay-based examination. The exam assesses students’ ability to explain key concepts, apply them to organizational situations, compare governance alternatives, and critically evaluate the strengths and limits of efficiency thinking. 

After completing the course, students should be able to:

• Diagnose why organizations work well or break down by analyzing coordination, decision rights, oversight, and risk.
• Explain how good organizational design supports effective cooperation, responsible decision-making, and sustainable value creation.
• Analyze make-or-buy decisions by assessing whether activities should be organized internally or contracted externally.
• Evaluate how risk is distributed among key organizational constituencies and how their cooperation can be safeguarded.
• Compare how governance problems differ across startups, expanding organizations, nonprofit/public organizations, and mature institutionalized organizations.

Enthusiasm and desire to explore new topics and ways of learning

Ketokivi, M., & Mahoney, J. T. (2023). Efficient organization: A governance approach. Oxford University Press.