ORAGANISATIONAL THEORY, STRUCTURE AND DESIGN

TOPIC: BOUNDARYLESS ORGANIZATIONS

PROF. CHANDRASHEKAR THAKAR

GROUP- 3

NAME ROLL NO.

Trupti Bane 99

Sujata Bhat 100

Akshata Chodankar 104

Nitisha Parkhi 113

MMS-HR
IMCOST (Thane)

DATE: 15/09/2010
 BOUNDARYLESS ORGANIZATION

• Introduction

Initially the tem was coined by Jack Welch, former CEO GE.
Boundary less organization means absence of walls i.e. absence of functional walls &
turfs.
The design of such type of organizations is not defined but flexible.
There are plenty of boundaries one can find in the organization such as door of office is
closed to inputs from employees. This attitude literally shut down window for new
innovation.
Ex. & J took into consideration the suggestion given by its foreman regarding machinery.

• Definition
An organization that seeks to eliminate the chain of command, have unlimited span
of control, replaces departments with empowered teams, is called as boundary less
organization.
E.g. GE has dispatched its people to Wal- mart to learn about their management practices
in retail.
For quality focused culture it has collaboration with Motorola.
This was possible because of removal of boundaries between the organizations.
• There are four types of boundaries that organizations may possess viz.

1) Vertical : Boundary between layers of an organization

2) Horizontal : Boundary between functional units of an organization
3) External: Between an organization & environment outside i.e. customers, suppliers,
government agencies etc.
4) Geographic: among different units of an organization located in different countries.

• A boundary less organization seeks to remove vertical, horizontal, and external barriers
so that employees, managers, customers, and suppliers can work together, share ideas,
and identify the best ideas for the organization.

E.g. Wal-Mart has approached P & G regarding warehousing & distribution, where as P& G
gained access to Wal-Mart’s daily sales information.

• Types of boundary less Organizations:

1) Network Organizations

 In a network organization, various functions are coordinated as much by market

mechanisms as by managers and formal lines of authority.
 Emphasis is placed on who can do what most effectively and economically rather than
on fixed ties dictated by an organizational chart.
 All of the assets necessary to produce a finished product or service are present in the
network as a whole, not held in-house by one firm.

2) Virtual Organizations

 The most interesting networks are dynamic or virtual organizations.

 In a virtual organization an alliance of independent companies share skills, costs, and
access to one another’s markets.

 It consists of a network of continually evolving independent companies.

 Each partner in a virtual organization contributes only in its area of core competencies.

 The key advantage of network and virtual organizations is their flexibility and
adaptability.

3) The Modular Organization

 A modular organization is an organization that performs a few core functions and

outsources noncore activities to specialists and suppliers.
 Services that are often outsourced include the manufacture of parts, trucking, catering,
data processing, and accounting.
 Thus, modular organizations are like hubs that are surrounded by networks of suppliers
that can be added or removed as needed.
 By outsourcing noncore activities, modular organizations are able to keep unit costs low
and develop new products more rapidly.
 They work best when they focus on the right specialty and have good suppliers.
 As an Hr in boundary less organization while doing job analysis, recruitment, selection
and training the HR should be able to articulate the core values of the organization

 It should understand the culture of boundary less organization and train others.
 The job description should be worker related and not work related, the employees should
be flexible, adaptable, open minded, motivate others, etc.
The main disadvantage of these types of boundary less
organization is arising of ego problem between the members.

• Salient features of Boundary less Organization:

1) Empowered Teams
 a. In a boundary less organization the individual or authority does not play any role.
It is the team which has the whole responsibility and control to obtain the goal.

b. E.g. General electrics have empowered teams.

2) Innovation

a. Boundary less organizations makes it possible to gain, understand and collaborate

ideas implemented within departments of organization or other organizations to
innovate a new process or technique for getting the job done.

3) Collaboration / integration

a. It is intra or inters collaboration among organizations leading to synergy to get the

work done.

b. E.g. Quick Market Intelligence - direct customer feedback from Wal-Mart taken
by GE

4) Customer Relations
a. Boundary less organization gives higher importance to client service. More
emphasis is placed on respond quickly to client needs, and makes every effort to
anticipate them as well.
b. e.g. AT&T units are receiving bonuses based on customer evaluations of the
teams that serve them.
c. Vodafone also uses customer evaluations for incentives.

5) Foreign Market
a. Enter foreign markets that have entry barriers to foreign competitors by
collaborations with organizations and using their expertise to understand the
markets.
6) Manage expensive technology
a. Boundary less makes it possible for small organizations to obtain the expertise
and technology which is expensive and otherwise not affordable for them.

7) Flat Structure
a. Another important feature of boundary less organization is decentralization. The
boundary less organization seeks to eliminate the chain of command and control
and replace departments with empowered teams thus removing boundaries
leading to a flat structure.

8) Cross Functional Team

a. Boundary less organizations removes horizontal boundaries by creating cross
functional teams where individuals with different expertise come together to
achieve goals.
b. E.g. NASA brought in scientists, engineers and experts from different countries to
research on climate variations.

9) Participative decisions
a. In such an organizations decision making is done taking in consideration points
and views of different individuals in team rather than a central authority.

10) Communication / Information Sharing

a. In boundary less organization importance is placed on seeking inputs and
communicating and sharing information with team members and other members
of the organization.

11) Technology
a. Boundary less organization relies more on technology for sharing information like
intranet, e-mails, fax, video conferencing and other facilities.
12) Trust and Interdependency
a. Trust and interdependency are the core values of boundary less organizations as
the employees have to trust co-workers and be willing to support when required
and also fall back on them for information and data.

Example: employee experience to work on multiproject with multi team members so as

result the employee is ready to cope with various project team work in the
organization
13) Mutual Accountability
a. Employees as team members have to share when credit is given, and also stand
for mistakes made than pointing fingers.

14) 360-degree appraisals

a. As there are no vertical, horizontal or external boundaries in the boundary less
organizations performance is evaluated by peers and others above and below the
employee.
b. Example: Coca Cola

• Disadvantages:

• People issue:
 Since it is Cross hierarchical teams which include top executives, model managers,
supervisors and operative employees who participate in decision making practices and
the use of 360 degree performance appraisals in which peers and others above and below
the employee evaluate performance.

 Many times this creates ego hassles amongst the employees which lead to problems.

• Resistance:

 Functional departments create horizontal boundaries.

 And these boundaries stifle interaction between functions, product lines, and units.

 So there are chances that while working in this type of organization people resist to this
change.

• Cost:

 It relies heavily on information technology which involves cost; so many small

organizations find it very difficult to implement this type of organization.

• Co-ordinate and control:

 Organization seeks to eliminate the chain of command, have limitless spans of control,
and replace departments with teams.
 This creates a problem of co-ordination and control among the employees.
 Team-based structures and boundary less organizations have minimal formalization and
centralization.
 This could also create some coordination and control problems for managers.

Conflict- above all these problems creates conflicting situations in an organization

• How to remove vertical, horizontal, external boundaries?

 By removing vertical boundaries through such structural approaches as cross hierarchical
teams and participative decision making, the hierarchy is flattened.
 Managers can remove horizontal boundaries by using cross functional teams and
organizing work activities around work processes instead of around functional
departments.
 Here instead of structure we can use multiskill job rotation with information sharing and
360 degree appraisal to make an impact
 An external boundary can be minimized or eliminated by using strategic alliances with
suppliers, or value chain management customer organization linkages.
 Example of AT&T & Vodafone service center

• Conclusion:

Complete or 100% boundary less organization is not possible. Not even GE has achieved
it yet.

There is some hierarchy or geographic division exist within organizations.