FLAT AND BOUNDARYLESS STRUCTURES

A Lesson in the "Leadership for the 21st Century" Course

Prepared By Dr. Les Pang

Problems with Traditional Organization Structures

Flat Organizations:

Definition: Reducing layers of an organization in the hope of achieving organizational efficiency and effectiveness

Boundaryless Organization:

What are the boundaries?

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

What is a boundaryless organization?

Examples: Private Sector

General Electric/Jack Welch, CEO

Global enterprise - body of a classic big-company while having the soul of a small company

    Big-Company advantages - reach/strength, resources

    Small-Company advantages - thirst to learn, compulsion to share, the bias for action (speed, hunger, urgency)

Demise of "not-invented-here" attitude; learn from each other

Learned from ideas coming from great companies

Benefits - meet the needs of customers today by gaining:

Ikea

Works closely with suppliers by providing technical assistance, leasing them equipment, giving advice on bringing production up to world class standards

Refined the role of the customer -- minimal salespeople, cart it home and assemble it themselves, provides car carrier racks, tools/instruction including tape measures and clipboards

Result: Lower prices for customers, growth for Ikea

Saturn

Plants are run by semi-autonomous teams of 6-15 people, each of which are responsible for every aspect of their area on the line

Relationship with customer redefined - no-pressure sales/no haggling (similar to buying a small gift in a local shop)

Suppliers have access to its production schedule

Wal-Mart/Procter & Gamble

Wal-Mart approached P&G regarding diaper warehousing and distribution

P&G gained access to WM's daily sales information and delivered optimal quantity to each specific store the very next day or as needed

Examples: Government

Federal Health Care Administration, Medicaid Bureau (now called "Centers for Medicare & Medicaid Services")

Federal Aviation Administration

NASA

USDA's Field Office of the Future

How to Loosen Barriers

How to Loosen Barriers - By T.K. Ram

Organizational Processes Required by Flat and Boundaryless Structures

Other Implementation Issues and Overcoming Them

Are You A Boundaryless Leader?

One Who Breaks Down Vertical Boundaries

One Who Breaks Down Horizontal Boundaries

One Who Breaks Down External Boundaries

One Who Breaks Down Geographic Boundaries

One Who Has the Overall Leadership Skills to make it happen!

Role of IT in Enabling Flat and Boundaryless Structures

"The 21st century leader will need to understand information technology and supply chain management" -- Dr. Albert Vicere, Director, Institute for the Study of Organizational Effectiveness

"In re-engineering, information technology acts as an essential enabler." -- Michael Hammer, Re-engineering the Corporation

IT Which are Enabling and Driving New Organizational Forms:

Top Ten Leadership Competencies: The 21st Century Leader Must...

Selected by 1,450 managers and executives world wide

1. Be able to articulate a tangible vision and strategy.

2. Empower others to do their best.

3. Act as a catalyst and manager of strategic change.

4. Get results. Turn strategy into action.

5. Exhibit a strong customer orientation.

6. Communicate effectively on a day to day basis.

7. Be a catalyst of cultural change.

8. Think integratively about the total business.

9. Be flexible and adaptive.

10. Take risks and initiative.

"Leaders will have to be very good at influencing people whom they have no direct authority" - Dr. Vicere


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