Chapter 4. Set the Design Criteria

CAPABILITIES ARE AN ESSENTIAL CONCEPT IN organization design. They are the link between the strategy and the organizational requirements that the strategy demands. Capabilities represent sources of competitive advantage. They are built through a well-considered blend of structure, process, talent, and reward systems (Kates and Galbraith, 2007) that is unique to the organization and difficult for others to easily copy. Capabilities serve as the design criteria for evaluating design options.

It is difficult to develop more than a handful of capabilities in any given company, so it is useful to think beyond fixing today's problems and to build organizational muscle that will be critical two, three, or more years ...

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