Boundaryless Orgnization

Organizations, by definition, are entities with boundaries. External boundaries separate a company from its suppliers and customers and define its geographic reach. Internal boundaries separate the departments between each other, management from employees. Such lines of differentiation have been necessary. Different departments in the organization work towards the common goal the overall success of the business.

However, companies that thrive within the new environment of global competition, rapidly changing technologies, and shifting markets are characterized by not having many boundaries. The new model of success is defined as “boundaryless” organization, a term created by Jack Welch during his term as CEO of GE. The borders, along vertical, horizontal, external, and geographic dimensions allow for an easy flow of information and ideas in all parts of the organization. The examples of boundaryless organizations would be Boing, and Apple, both of the companies try to remove hierarchy to empower employees and teams. 

In boundaryless hierarchies, employees are empowered to make decisions; therefore decisions are made by people closest to the root of the problem and who have to live with the consequences. Empowering and giving authority to employees allows to have the shortest time between decision and implementation.

The goal in a boundaryless organization is to develop greater flexibility and responsiveness to change and to enable the free exchange of information and ideas. It is made up of selfmanaging and crossfunctional teams that are organized around core business processes. The teams include employees from different functional areas as well as customers and suppliers.

Boundaryless organizations are able to achieve greater integration and coordination. It shows in integration of resources and human capital. They are able to adapt to environmental and technological changes faster.

The biggest change has been from having direct control over resources required for performance toward dependence on others over whom there is no direct control. Under new structures with more dependence, managers are still responsible for company performance. For a manager who is used to a traditional hierarchical approach, it’s hard to adjust and transfer control over to emloyees. Peter Drucker, renowned ‘business thinker’, once noted that the problem with large company managers is that they are used to giving orders and not to working as a team.

Aftereall, companies have to decide what structure would benefit their business. Not all the companies would respond well to the boundaryless organization. For example, organizations that operate under a lot internal control, power and ranks, would not respond well to boundaryless organization structure.

Works Cited:

Anand, N., & Daft, R. L. (2007). What is the right organization design? Organizational Dynamics, , 329–344.

Ashkenas, R. (1999). Creating the boundaryless organization, Business Horizons, Volume 42, Issue 5, September–October 1999,

Ashkenas, R., Ulrich, D., Jick, T., & Kerr, S. (1995). The Boundaryless organization: Breaking the chains of organizational structure. San Francisco: Jossey-Bass.

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9 thoughts on “Boundaryless Orgnization

  1. Great Post Anastasia.

    I think that Google is a good example of a boundaryless organization. It allows their creative team to take a single day a week to focus on what they want to work on. This allows the creative juices to flow and really helps when it comes to innovation of new products.

    The sector of Google that allows such innovation is “called Google Labs and it’s where Google Goggles and Google Maps were developed, (Gods of Advertising, 2011).

    Google Maps is one of my most-used applications on my iPhone, I absolutely love the fact that I have a GPS built into my phone that can provide me with turn-by-turn directions without having to worry. To know this was made by Google staff just working on it casually on their one free day a week blows my mind.

    It really goes to show how far a little brain storming can go. Who knows what kind of Google products will come about next during the brainstorming day.

    Cheers,

    Prabh

    Reference:

    http://godsofadvertising.wordpress.com/2011/01/12/one-day-a-week-google-lets-creative-staff-make-whatever-they-want-oh-if-only-in-adland/

  2. I agree that a boundaryless organization is a successful way to structure an organization. Traditionally, having such a divide between upper management positions and front-line works has proven to be ineffective because (like you mentioned) employees are not involved in decision making process. I think if the hierarchical structure is broken down and all employees are given the opportunity to be empowered and have autonomy in their jobs (whatever the position) the odds of higher productivity and achievement of organizational goals can be achieved. I for one definitely feel a greater sense of motivation and job fulfillment if I am involved in the decision making process at work.

    Here is an interesting blog post that also discusses the benefits to a boundaryless organization:

    http://changingwinds.wordpress.com/2012/03/25/thriving-in-a-boundaryless-organization-how-people-can-make-a-difference/

    • Thank you for your comment Jen. The article you provided is interesting because it describes characteristics for boundaryless individual as well as the company. Therefore the boundaryless company should hire individuals with personalities that would thrive in that kind of environment.

  3. Once again an interesting post Anastasia. I completely agree with the idea of a boundaryless organization. As you mentioned it empowers employees and also adjusts easily to ever changing economic conditions. I was surprised at the different types of boundaryless organizations, and realized that present day we have so many among us, especially with the increase in team based business structures and multilevel marketing organizations that seem to have been increasing over the years.
    I was looking over the disadvantages, and some that I thought are good to consider when determining if a boundaryless structure is ideal are:

    >”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 smallorganizations 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” (Thakar, 8).

    Thakar, C. (2010, September 15). Boundaryless Organizations. Scribd. Retrieved July 17, 2012, from http://www.scribd.com/doc/50419390/Boundaryless-Organizations

    • This is a great comment Clarissa, thank you for pointing out the disadvantages. In my blog I have focused on the positive side of the boundaryless organization structure, however by looking at the types of companies employing this organization style I have to agree it is costly. However, not a single organization is completely boundayless so employing that structure in the departments where innovation and collaboration between employees is absolutely necessary would be most beneficial and cost effective for the company.
      Thanks again!

  4. Great post Anastasia and thanks for your comments on bureaucracy!!

    I believe that the boundaryless organizational setup is the way to go if a firm wants to be competitive and successful in the 21st century. The boundaryless structure encourages creative people to do what they do best and creates an environment which fosters innovation on all levels of the organization.

    However, I do believe that if an organization is going to try the boundaryless structure, the management must have enough confidence in its employees to maintain a certain level of ethical responsibility and accountability. It must instill in its employees the idea of not compromising their ethics for technological breakthroughs. Such was the case during Google’s development of its Street View project. The company collected sensitive ‘payload’ data from various wi-fi networks around the world in the pursue of providing users of Google Maps and Google Earth street-level images. This payload data includes personal information, such as internet usage history and passwords, which were not needed for its location database for the Street View project. Google then went on to impede the Federal Communications Commission’s (FCC) investigation by not handing over the e-mails and names of the employees involved for which they were fined a meager sum of $25,000 (now we know why the U.S. economy is in the dumpster, no serious enforcement of ethical standards) (Reuters, 2012).

    If organizations want to give their employees free reign over projects and assignments then the organization must also hold the same employees accountable for their actions.

    Reuters. (2012). Google fined $25,000 for impeding FCC investigation. Retrieved on July 17, 2012, from http://www.reuters.com/article/2012/04/16/net-us-google-fine-idUSBRE83F00Q20120416

  5. The idea of a boundaryless organization is really great – I cannot imagine a better way to empower the employees of an organization than getting rid of formal hierarchies

    Dana Griffin, of Demand Media, brings up a good point in his post The Structure of a Boundaryless Organization. (found at: http://smallbusiness.chron.com/structure-boundaryless-organization-2764.html). He notes that it is important to be cautious in a boundaryless organization because it can be easy to lose focus. When members of a team don’t have a clearly defined role, details can often get overlooked.

    To help me better understand a boundaryless organization, I drew a comparison to positions on a hockey team. Each member on a line has a role – center, winger, or defence. Their contributions as a whole are what bring success – they all pass, they all hit, and they all (hopefully) score. Yet, when it comes down to it, it would be impossible to put them on a hierarchal chart because one does not rank higher than the other… I hope my understanding is right… 🙂

    Thanks for the info!

    A

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