The Boundary less Organization General Electric’s former chairman, Jack Welch, PROBABLY coined the term boundary less organization to describe his idea of what he wanted GE to become. He wanted to turn his company into a family grocery store. That is, to eliminate vertical and horizontal boundaries within GE and break down eternal barriers between the company and its customers and suppliers. The boundary less organization seeks to eliminate the chain of command have limitless spans of control and replace departments with empowered teams.
It relies so heavily on information technology ome have turned to calling this structure the T-form (or technology based) organization. Other “boundaryless” CO’s are – Hewlett-Packard, AT&T Motorola and Oticon AIS GE – Current CEO = Jeff Immelt Below is a statement about boundarylessness by Jack Welch. GE’s diversity creates a huge laboratory of innovation and ideas that reside in each of th businesses, and mining them is both our challenge and an awesome opportunity.
Boundaryless behavior is what integrates us and turns this opportunity into reality, creating the real value of a multi-business company the big competitive advantage we call Integrated Diversity. 12 Boundarylessness can be seen along four dimensions: vertical, horizontal, external, and geographic. Vertical boundaries divide management from employees and divide layers ofmanagement from each other. Do the different layers communicate effectively? Horizontal boundaries divide divisions and departments within a corporation from each other. Do different functional areas cooperate with or compete against each other?
External boundaries divide a company from others in its value chain. How well does a company collaborate with its customers and suppliers ? Does it take an “us against them” attitude, or does it view cooperation and collaboration mong members of its value chain as a way to improve everyone’s bottom line? Geographic boundaries are a special form of horizontal boundary. How well does a company cross the national and cultural boundaries that divide its international operations from each other and itself from foreign markets? By removing vertical boundaries management flattens the hierarchy.
Status and rank are minimized. Cross hierarchical teams which include top executives, model managers, supervisors and operative employees participate in decision making practices and the use of 360 degree performance appraisals in which peers and others above and below the mployee evaluate performance are examples of what GE is dong to break down vertical boundaries. Replace functional departments with cross functional teams to organize activities around processes. For instance, Xerox now develops new products through multidisciplinary teams that work in a single process instead of around narrow functional tasks.
Similarly some, AT&T units are now doing annual budgets based not on functions or departmental but no processes such as the maintenance of a worldwide telecommunications net work. Another way management can cut through horizontal barriers is to use lateral transfers, rating people into and out of OITTerent Tunctlonal areas. I nls approacn turns soclallsts Into generallsts wnen Tully operational the boundaries organizations also break down barriers to external constituencies (suppliers, customers, regulators, and so on) and barriers created by geography.
Globalization strategic alliances customer organization links, and telecommunicating are all examples of practices that reduce external boundaries. Coca-Cola for instance sees itself as a global corporation, not as a U. S or Atlanta company. Firms such as NEC Corp, Boeing and Apple Computer each have strategic alliances or Joint partnership with dozens of companies. These alliances blur the distinction between one organization and another as employees work on Joint projects. And some companies are allowing customers to perform functions that previously were done by management. Finally, telecommunicating is blurring organizational boundaries.
The security analyst with Merrill Lynch who does his Job from his ranch in Montana or the software designer who works for a San Francisco company but does her Job in Boulder Colorado. HOW does GE do it ??? EG 1. In a town meeting, employees with a common goal or purpose (serving the same customer, working on the same product or process, etc. but from different areas and different levels of management come together to discuss new ideas. Groups work for a few days before town meetings to generate and refine new ideas, and the ideas are presented, discussed, and either killed or implemented at the meetings.
The town meeting format provides “safe ways” for anyone’s ideas to be challenged by anyone else, without regard to position or authority. Town meetings have two purposes. First, of course, is to generate and implement change ideas. Second however, is to educate people on their “real degrees of freedom,” to let employees know what decisions they an make on their own and to encourage them to do so. This creates an atmosphere where change, i. e. recombination, is not only encouraged at town meetings, it is encouraged throughout the organization whenever and wherever it is necessary EG 2. ix sigma council – composed of quality experts from different businesses. The council met quarterly to share information about what worked and what didn’t in the quest for quality. Through the council, good ideas in use in one area of GE would quickly be incorporated into other areas. EG3. HRM At all stages – attraction & recruitment, training & development, maintenance EG 4. Quality Workout (pto…. ) GE Workout: Quality Culture Change Process Created in 1988 as part of the ongoing drive for better productivity and efficiency.
Initially, GE Work-out was intended to identify and eliminate unneeded processes and tasks that were left over from previous years, when management had more layers. After restructuring, many groups did more work with fewer people, rather than making comprehensive operational changes It involves identifying an area in need of improvement and bringing people together from all sides of the process (design, marketing, production, sales, etc. ) to identify a better method. The GE Work- out team meets outs10e 0T Its normal work envlronment to Olscuss tne Issues ana develop recommendations.
EXAMPLES OF VIRTUAL ORGANIZATIONS An industry that is known for its use of partners and alliances is the entertainment industry, which has partnered with the computing, communications, consumer electronics, and publishing industries to convert movies, textbooks, and other software into digital formats. Increasing numbers of firms are moving to these new organizational forms. Corning, the glass and ceramics maker, is one such firm known for making partnerships work to their advantage. Corning has partnered with such firms as Siemens, Germany’s electronics conglomeration, and Vitro, Mexico’s largest glassmaker.
Alliances are so important to Corning’s business strategy that the corporation has defined itself as a network of organizations. Computer organizations that have successfully implemented forms of this new structure include Apple Computer and Sun Microsystems. When Apple Computer linked its easy-to-use software with Sony’s manufacturing skills in miniaturization, Apple was able to get its product to market quickly and gain a market share in the notebook segment of the PC industry. Sun Microsystems has been considered another highly decentralized organization comprised of independently operating companies.
Sun positions information systems as a top priority, trying to achieve faster and better communication. With numerous “SunTeams,” members operate across time, space, and organizations to address critical business issues. Sun managers identify key customer issues and then form teams with the critical skills and knowledge needed to address the issue. This team might include sales people, marketing personnel, finance, and operations from various places around the globe; customers and uppliers may become episodic members as necessary. Weekly meetings may take place via conference calls.
Critical to the team’s success is the selection of talent from the organization, defining a clear purpose for the team’s efforts, and establishing communication links among the team members. Sun has been working on further development of technologies such as EDI (Electronic Data Interchange) and RFID (Radio Frequency Identification technology). Both EDI and RFID will impact information exchange globally and across numerous industries. Les Pang offers a list of best practices, based on a review of successful implementations of virtual rganizations. Foster cooperation, trust and empowerment.
Ensure each partner contributes and identifiable strength or asset. Ensure skills and competencies are complementary, not overlapping. Ensure partners are adaptable. Ensure contractual agreements are clear and specific on roles and deliverables. If possible, do not replace face-to-face interaction entirely. Provide training that is critical to team success. Recognize that it takes time to develop the team. Ensure that technology is compatible and reliable. Prov10e tecnnlcal asslstance FURTHER READING: tnat Is competent ana avallaDle. Camarinha-Matos, L. , H. Afsarmanesh, and M.
Ollus, eds. Virtual Organizations: Systems and Practices. New York, NY: Springer, 2005. Davidow, W. H. , and M. S. Malone. The Virtual Corporation: Structuring and Revitalizing the Corporation for the 21st Century. New York, NY: Harper Collins Publishers, 1992. Greiner, R. , and G. Metes. Going Virtual: Moving Your Organization into the 21st Century. Upper Saddle River, New Jersey: Prentice Hall, Inc. , 1995. Hilty, L. M. , E. K. Seifert, and R. Treibert, eds. Information Systems for Sustainable Development. Hershey, PA: Idea Group Publishing, 2005. Kirkman, B. L. , B. Rosen, P. E.
Tesluk, and C. B. Gibson. “The Impact of Team Empowerment on Virtual Team Performance: The Moderating Role of Face-to- Face Interaction. ” Academy of Management Journal 47, no. 2 (April 2004): 175-192. Levary, R. R. , and R. Mathieu. “Supply Chain’s Emerging Trends. ” Industrial Management 46, no. 4 Ouly/August 2004): 22-27. Lipnack, J. , and J. Stamps. Virtual Teams: Reaching Across Space, Time and Organizations with Technology. New York, NY: John Wiley and Sons, 1997. Pang, Les. “Understanding Virtual Organizations. ” Information Systems Control Journal 6 (2001): 42-47. Taylor, F. W.
The Principles of Scientific Management. New York, NY: Harper, 1911. Vakola, M. , and I. E. Wilson. “The Challenge of Virtual Organization: Critical Success Factors in Dealing with Constant Change. ” Team Performance Management 10, no. 5-6 (2004): 112-120. Read more: Virtual Organizations – strategy, organization, levels, examples, advantages, definition, model, company, hierarchy, business, New demands alter organizational forms, The new business form, Characteristics of a virtual organization http://www. referenceforbusiness. com/managementnr-zmrtual- Organizations. html#ixzzOwdUfBoC5