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Information Technology (IT) in determining the shape and character of modern organizations

Efficiency and Competitive Advantage

Traditional boundary

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• Internal boundaries or barriers
• External boundaries or barriers

External boundaries

Internal Constraints

Organisational Structures

These structures enable managers and employers assess the tasks, functions and goals of the business, enabling them to make decisions about how to group people together best and in the most efficient way to achieve company objectives.

The hierarchical: Large companies usually run their business on levels of power, so that employees usually concentrate on delivering task assigned and report through an upwards management system.

However this style presents slow communication and delays in decision making process since subordinates have narrow control over issues as they present what is expected of them and wait to do as they are told.

So what then is the "boundaryless organisation"?

Structure not defined by, or limited to, the boundaries imposed by traditional structures

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Implementations of the "boundaryless organization"

The network organization

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• outsources or subcontracts some its functions to other organizations and co-ordinates their activities from its own central headquaaters

Characteristics

• central headquarters
• numerous subcontracted firms
• have solid infrastructure and the internet access

Advantages

• no geographical constraints on outsourcing functions
• increased competetiveness on a global scale
• flexibility in workflows
• flexibility in dealing with changes in market conditions
• cost savings in minimal supervisory

Disadvantages

• relinquishing of control is a draw back
• loyalty is likely to be weakened
• economic drawbacks

The virtual organization

grouping of units of different organizations that have formed a temporary partnership to achieve the same strategic objectives

Characteristics

• no physical structure
• emphasis on knowledge creation and sharing
• reliance on electronic communications
• geographically dispersed and mobile workforce
• no organizational boundaries
• temporary working relationships

Advantages

• offering the scope for firms to access a wide range of skills, experience and knowledge
• increasing the flexibility and responsiveness of firms to meet changes in the enivronment
• helping firms grow by allowing them to compete on a global scale
• increasing competitiveness

Disadvantages

• collaboration with partners necessarily means relinquishing some control
• need for strong management
• virtual organizations can easily fail with miscommunication