Human Resource Knowledge

There decades ago, the business historian Alfred Chandler proposed a way of thinking that has been widely adopted in American business (and that this text has presented) an organizational structure logically follows from and facilitates an organizational strategy.

Over the years, as managers have tried to make structure fit strategy this approach has resulted in managers building larger and larger ‘semi-permanent’ structures for their organizations. Those structures logically followed strategies designed to make companies bigger and more dominant in the marketplace. Today, many mangers are experimenting with very different looking organizational structures because they are experimenting – and succeeding –with radically different kinds of organization all strategy. James Brian Quinn calls these organizations, intelligent enterprises because their most important product is knowledge packaged as valuable services. And once you see organization as in the ‘service business’ Quinn and Tom Peters say, you’ll never organize like you did.

Three innovative kinds of organizational structures have evolved from this new approach to organizational strategy: (1) what Peters calls necessary disorganization, (2) the so-called virtual corporation and (3) what Quinn calls disaggregated organizations.

Necessary Disorganization: Tom Peters, powerful voice for business change for more than a decade is a leader in the charge against traditional organizational designs and structures. Indeed, in his latest book, he argues that disorganization is necessary in what he calls today’s “bonkers” organizational environment: How do you deal with a bonkers world other than with bonkers organizations peopled wt bonkers folks? My answer in short: You can’t!

Peters advocates organizational design processes that result in flexible and short lived arrangements of work activities; he predicts Tomorrow’s effective organization [deliberately in quotes] will conjured up anew each day.

What Peters asks managers to do is pay much less attention to organizational structures ad much more attention to working through problems jointly with people who bring different talents to the task, and who may even come from different organizations to work on that task . In this way, Peters claims mangers and non- managers can work much more creatively to deliver prompt service to their customers.

You can already see examples of the kind of temporary organizational arrangements that Peters describes and promotes. Take the construction of a new house, for example. A general contractor, in addition to overseeing the entire project for the customer might do the framing, siding, and windows work. The contractor might then arrange for plumbers, electricians, and painters to do their specialized parts of the job. Together all these people form a kind of temporary ‘ad hoc’ organization. Once the house is built, the temporary organization disbands – unless construction flaws appear –and these people go their separate ways probably to be part of other such ad hoc organizations. What is novel and potentially revolutionary about what Peters describes and promotes is its application in the mainstream corporate world, in the United States and beyond.

Characteristics of a New Corporate Model

The virtual Corporation

Today’s joint ventures and strategic alliances may be an early glimpse of the business organization of the future: The virtual Corporation. It’s a temporary network of companies that comes together quickly to exploit fast changing opportunities. In a Virtual Corporation, companies can share costs, skills and access to global markets, with each partner contributing what it’s best at. Here are the key attributes of such an organization.

Technology: Informational networks will help far flung companies and entrepreneurs link up and work together from start to finish. The partnerships will be based on electronic contracts it keep the lawyers away and speed the link ups.

Opportunism: partnership will be less permanent less formal and more opportunistic. Companies will band together to meet a specific market opportunity and, more often tan not, fall apart once the need evaporates.

Excellence: Because each partner brings its ‘core competence’ to the effort, it may be possible to create a ‘best-of-everything’ organization. Very function and process could be world class something that no single company could achieve.

Trust: These relationships make companies far more reliant on each other and require far more trust than ever before. They’ll share a sense of ‘co-destiny’ meaning that the fate of each partner s dependent o the other.

No Borders: This new corporate model redefines the traditional boundaries of the company. More cooperation among competitors, suppliers and customers makes it harder to determine where one company ends and another begins.