galbraith-star-model

Galbraith Star Model

The Galbraith star model was developed by American organizational theorist Jay R. Galbraith in 1982. The model provides a framework with which an organization can sustain its value propositions and business model over time. 

Understanding the Galbraith star model

The Galbraith star model is a framework on which an organization can base its design choices.

To do this, the model guides design choices and policies that management can control to influence employee behavior.

Management can also use the model to identify and then overcome any negative aspects of the company’s structure.

Galbraith’s model consists of five interconnected categories which are diagrammatically arranged to form a star shape.

In the center of the star, the organization itself serves as a center of gravity that holds the five different elements together.

In the next section, we will describe each of these elements in detail.

The five categories of the Galbraith star model

The five categories of Galbraith’s model represent levers that can be pulled to institute organizational alignment.

Strategy

Strategy defines how the organization intends to beat its competitors.

This winning formula consists of goals, objectives, core values, vision, and mission.

It also incorporates the products and services to be sold, the markets to be served, and the value to be offered to the customer.

Strategy is a long-term corporate plan for the next three to five years, but a vision that extends beyond five years is not unusual.

Structure

Structure defines how power and authority within the organization are distributed. The structural policy itself is governed by four key areas:

  1. Shape – the number of employees in a department at each level relative to the number of superiors. This is related to the span of control.
  2. Power distribution – at the vertical level, this refers to centralized and decentralized decision-making. At the horizontal level, power distribution refers to the ability of a department to deal with mission-critical issues.
  3. Specialization – the nature and extent of specialization to carry out the work, and
  4. Departmentalization – this clarifies how departments are formed for each structural level and is based on dimensions such as functions, geography, workflow processes, markets, customers, and products.

Processes

Where structure is the anatomy of an organization, it can be helpful to think of processes as its physiology or functioning.

Processes are based on decision-making and information sharing, with management processes having both a vertical and horizontal form. 

Vertical processes relate to fund and talent allocation, budgeting, and planning, while horizontal processes deal with workflows such as order fulfillment or product development.

Rewards

When used effectively, rewards systems align employee goals with organizational goals.

To provide employees with the motivation to complete strategic objectives, incentives such as bonuses, promotions, stock options, and salary increases are used.

Galbraith noted that employee rewards systems must be aligned with the structures and processes of the organization.

That is, they are only effective when consistently used in combination with the other categories.

People

This describes HR policies like recruitment, selection, rotation, development, training, and any other policy that provides talent for the organization to carry out its strategy and maintain its structure.

Similar to the employee rewards category, HR policies work best when there is harmony between them and the other design areas.

Key takeaways:

  • The Galbraith star model is a framework on which an organization can base its design choices. It was developed by American organizational theorist Jay R. Galbraith in 1982.
  • The Galbraith star model clarifies design choices and policies that management can leverage to influence employee behavior and correct negative aspects of the company’s organizational structure.
  • The five categories of Galbraith’s model include strategy, structure, processes, rewards, and people. Each category must be aligned with the others for ideal organizational performance.

Connected Business Concepts

Functional organizational structure

functional-organizational-structure
It is a type of organization where people are grouped according to their area of professional competence and specialization. Typically this kind of organization is very bureaucratic and has a top-down approach.

Divisional organizational structure

divisional-organizational-structure
This structure is more flexible to the hierarchical organization, as each division will run almost as an independent business, that has independent control over resources and money spent.  Each division working as an independent organization can be grouped by product line but also geography.

Matrix organizational structure

matrix-organizational-structure
It is a type of organization that blends elements of a functional and divisional structure. While it sounds appealing in theory, it might be hard to implement.

Read Also: Matrix Organizational Structure In A Nutshell.

Flatarchy organizational structure

flatarchy-organizational-structure
It is a type of organization born from the startup way of acknowledging more independence and autonomy to employees, where they are closer to the chain of command, and the decision-making process.

Read Also: Flat Organizational Structure In A Nutshell.

Other types of organizational structures

holacracy
A holacracy is a management strategy and an organizational structure where the power to make important decisions is distributed throughout an organization. It differs from conventional management hierarchies where power is in the hands of a select few. The core principle of a holacracy is self-organization where employees organize into several teams and then work in a self-directed fashion toward a common goal.

Read Also: What Is Holacracy And Why It Matters In Business.

flat-organizational-structure
In a flat organizational structure, there is little to no middle management between employees and executives. Therefore it reduces the space between employees and executives to enable an effective communication flow within the organization, thus being faster and leaner.
u-vs-m-form-organizational-structure
A U-form (unitary form) organizational structure describes a company managed as a single unit along functional lines such as marketing and finance. Conversely, an M-form (multidivisional) structure describes a company divided into multiple semi-autonomous units. Financial targets from a central authority control each unit.

Read Also: U vs M-form Organizational Structure.

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A decentralized autonomous organization (DAO) operates autonomously on blockchain protocol under rules governed by smart contracts. DAO is among the most important innovations that Blockchain has brought to the business world, which can create “super entities” or large entities that do not have a central authority but are instead managed in a decentralized manner.

Read Also: What Is Decentralized Autonomous Organization? DAO In A Nutshell.

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