1. Theoretical Background
A boundaryless organization is a modern approach in organization design. It is an organization that is not defined by, or limited to, the horizontal, vertical, or external boundaries imposed by a predefined or traditional structure. This term was coined by former General Electric chairman Jack Welch because he wanted to eliminate vertical and horizontal boundaries within the company and break down external barriers between the company and its customers and suppliers. Traditional companies with boundaries, rules, and extensive plans are at a supreme disadvantage in today’s globalized world, where technology changes daily and the value chain commands changes of its own. In a traditional company where people are categorized into neatly defined positions with their job descriptions filed in three copies in the human resources department, the way a company plans its business can cause it to sink or swim. Bad planning can mean lost opportunities, being overtaken by the competition, loss of revenues, or watching its position slip away because of a new technology, an alteration in the global marketplace, or simply a failure to market its product effectively. When changes occur, they happen too quickly for its organizational processes to meet them.
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As a result, opportunities are quickly lost, problem situations take over rapidly, and before the company can respond appropriately, it has lost customers, opportunities, and market share. Although that company likely has more than enough talent within its walls to offset all of those disasters, the talent is never put to use, because employees are constrained to operate within the confines of their job descriptions, where only the prescribed talents can be put to good use. The answer to this dilemma lies in boundaryless organizations. The boundaryless organization does not operate according to volumes of planning documents, job descriptions, or tradition, instead it regroups and innovates. The boundaryless organization has developed primarily due to the widespread distribution of information and the presence of information technology. But if you have great innovative companies such as Newskool Grooves that is always ready and ahead of the game, with a little guidance, the company can make it through. The company has to always be alert of impacts of every decision made. Boundaryless organizations communicate mainly through email, phone and other virtual methods rather than more traditional face-to-face communication. The freedom to telecommute with international employees removes geographical barriers to productivity and allows for schedule flexibility. By organizing expert employees in groups and giving them decision-making authority, these companies can change quickly to meet needs and function efficiently in an ill-defined hierarchy.
2. Facts of case
Employees no longer work in isolation but work as part of a team on broad, company-wide projects, quality management, just-in-time methods, lean production, and supply-chain management. The advantages of a boundaryless organization are that it is highly flexible and responsive and draws on talent wherever it is found. The disadvantages are that there is a lack of control and it presents communication difficulties. As in the case study, we can find that Newskool Groove has a decentralized culture and a company which reinvents itself 2 to 3 years; the bigger fight is a constant war against stagnation and rigidity. In boundaryless organization developers had a major communication breakdown about their hardware DJ controller, which required many hours of discussion to resolve. The boundaries of an organization can be divided into following four types: Vertical – Boundaries between layers within an organization
Classic Example: Military organization
Problem: Someone in a lower layer has a useful idea; “Chain of command” mentality Horizontal – Boundaries which exist between organization functional units. Each unit has a singular function.
Problem: Each unit maximize their own goals but not the overall goal of the organization External – Barriers between the organization and the outside world (customers, suppliers, other government entities, special interest groups, communities). Customers are the most capable of identifying major problems in the organization and are interested in solutions. Problem: Lose sight of the customer needs and supplier requirements Geographic – Barriers among organization units located in different countries Problem: Isolation of innovative practices and ideas
Many companies are crossing lines that have set boundaries linking them to communication. All over the world healthcare facilities are requiring employees the opportunities to connect through a wide variety of networking resources. Contact methods that expand knowledge, ideas, sharing, and finding solutions are all trigger points. Environments that provide healthcare are responding with other organizations through networks that promote social media. Companies are responding to other organizations by relaxing barriers that keep them from communicating with others. Organizations in healthcare are providing boundaryless organizations encouraging and managing a blur of boundaries to provide a better knowledge and understanding of a situation characterized by uncertainty. Organizations are promoting a resourceful outflow of information through the exchange of authority. Barriers that divide groups and isolate individuals from communicating are allowing leaders the cooperation to become more involved. A boundary organization allows businesses the opportunity to express their concerns. Boundary organizations are formed to manage meetings in distinct areas and encourage the production of knowledge.
These organizations are eliminating the older ways of communication done through the traditional one-way flow. They are effectively changing the hypothesis that supports the existence of boundaries. The exchange of transferred knowledge has been a great challenge for many organizations. Boundaryless organizations communicate mainly through email, phone and other virtual methods rather than more traditional face-to-face communication. The freedom to telecommute with international employees removes geographical barriers to productivity and allows for schedule flexibility. By organizing expert employees in groups and giving them decision-making authority, these companies can change quickly to meet needs and function efficiently in an ill-defined hierarchy. The four main types of boundaryless organizations are modular organization, strategic alliance, network organization, and virtual organization. Modular and virtual organizations outsource all non-essential functions. When two companies collaborate to form a partnership that is beneficial to all parties, they are a strategic alliance. A network organization is one in which companies outsource their major business functions in order to focus more on what they are in business to do.
The boundaryless organization is a paradigm shift that recognizes the limitations inherent in separating people, tasks, processes, and places, and emphasizes the benefits of moving ideas, information, decisions, talent, and actions where they are most needed (Ashkenas, Ulrich, Jick, & Kerr, 1995). Companies often use a boundaryless organizational structure when they (1) collaborate with customers or suppliers to provide better-quality products or services, (2) are entering foreign markets that have entry barriers to foreign competitors, or (3) need to manage the risk of developing an expensive new technology. The boundaryless organization is appropriate in these situations because it is open to change, it facilitates the formation of joint ventures with foreign companies, and it reduces the financial risk to any one organization.
1. URL: http://mysite.verizon.net/lpang10473/web/ldc_flat.htm 2. URL:http://www.slideshare.net/AnujSharma4/presentation-on-boundaryless-organization 3. URL: smallbusiness.chron.com › … › Organization Structure