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Organizational design is a process of reshaping the structure of the organization. All organizational elements are necessary to create new capabilities to compete in the market. “Star Model” approach is one of the models that lead better performance of the organization. The organizational design may involve various strategic decisions. In fact many companies implement repeated changes in organization structure to get benefits in the business. The organizational change always effected whenever formal or informal elements associated. The organizational design process will be in different phases that are linked with behavior, function, product, customer, Geography and market. Effective organization design enhances the organization development.
The formal organization designed with the fixed set of rules within the organization. The structure and design of the organization will be in such a way according to the set of rules. On the other hand, informal organizations allow the people to work together. It means there will no strict rules. More flexibility is accessible in such organizations that are designed with the informal setup. Naturally such flexibility allows the organizational change as the staff within the organization able to take immediate decisions. Dynamic set of personal relations, networks, motivation etc is found in the informal organizations. Therefore formal and informal elements influence the organizational change.