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An organization design determines the nature and flow of work, as well as the ways in which employees interact with one another.
In general, organization design is a formal, guided process for integrating the people, information and technology of an organization. It is used to match the form of the organization as closely as possible to the purpose(s) the organization seeks to achieve. Through the design process, organizations act to improve the probability that the collective efforts of members will be successful.
from See http://www.inovus.com/organiza.htm
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