Trends in Organizational Structures

Trends in Organizational Structures

It is increasingly apparent that the long-favoured vertical model is, by itself, no longer capable of meeting all the different needs of business. It has been rendered inadequate for today's demanding competitive, technological, and workforce environments by its inherent shortcomings.

Frank Ostroff, The Horizontal Organization

Movement towards… More horizontal structures Decrease hierarchy Increase empowerment Better mobilize:

Technology Talents of people

Team Structures Uses permanent and temporary cross- functional teams to improve lateral relations

Team Structures▪Advantages

▸Increase in communication▸Boost moral▸Improve speed and decisions

▪Disadvantages▸Conflicting loyalties among members▸A lot of time spent in meetings

Network Structures• Uses I.T. to link with networks of outside

suppliers and service contractors

• Own only the most essential or core components – Outsourcing

• Strategic Alliance – partners do things of mutual value for one another

Network Structures

Business Core

Warehouse and Distribution Company

Marketing Firm

ManufacturingCompany

Accounting and Financial Management

Firm

Information Technology

Network Structures▪Advantages

▸Can operate with fewer full-time employees

▸Streamlined▸Cost Competitive

▪Disadvantages▸Difficult to control and coordinate▸If one part breaks down or fails to deliver

the entire system suffers the consequences

Boundaryless Organizations▪Combination of the team and

network structures just described, with the addition of “temporariness”

▪There are no formal assignments and there are not job titles or job descriptions

▪People with talent work together as needed to get the job done

Boundaryless Organizations▪Key Requirements:

▪Absence of Hierarchy▪Empowerment of team members▪Technology utilization▪Acceptance of impermence▪Focus is on talent for the task

Boundaryless Organizations▪Advantages

▸Empowerment of team members▸Technology Utilization▸Increase in creativity, quality,

timeliness, flexibility

▪Disadvantages▸Task confusion▸Conflict may arise among members

Boundaryless Organizations

▪Virtual Teams:A virtual team is a group of people who

work interdependently with a shared purpose across space, time, and organization boundaries using technology.

People do not routinely see one another when they are in different places, spread out around the world, or even housed in different parts of the same city. Motorola, for example, has some 20 locations just in the Northwest Chicago area, each of which has multiple buildings. Many teams today never meet face-to-face but work together only online. Such is the case with the 1250 employees of Buckman Laboratories in Memphis, Tennessee, who form and disband numerous situation-specific virtual teams on a daily basis - even though the people in them are spread all around the globe.

Jessica Lipnack and Jeffrey Stamp

Trends in Organizational Design Structure

Shorter Chain of CommandLess Unity of CommandWider spans of ControlIncreased Delegation and Empowerment

Centralization (IT)Reduced use of staff