Page 203 - Fundamentals of Management Myths Debunked (2017)_Flat

202 Part 3 • Organizing
Instead of a matrix structure, many organizations are using a project structure, in which
employees continuously work on projects. Unlike the matrix structure, a project structure
has no formal departments where employees return at the completion of a project. Instead,
employees take their specific skills, abilities, and experiences to other projects. Also, all work
in project structures is performed by teams of employees. For instance, at design firm IDEO,
project teams form, disband, and form again as the work requires. Employees “join” project
teams because they bring needed skills and abilities to that project. Once a project is com-
pleted, however, they move on to the next one. 33
Project structures tend to be more flexible organizational designs.

• Advantages:
• Employees can be deployed rapidly to respond to environmental changes.
• No departmentalization or rigid organizational hierarchy to slow down decisions or actions.
• Managers serve as facilitators, mentors, and coaches and work to eliminate or minimize
organizational obstacles and ensure that teams have the resources they need to effectively
and efficiently complete their work.
• Disadvantages:
• Complexity of assigning people to projects.
• Inevitable task and personality conflicts that arise.

whaT is a Boundaryless orGanizaTion? Another contemporary organizational
design is the boundaryless organization, which is an organization whose design is not
defined by, or limited to, the horizontal, vertical, or external boundaries imposed by a pre-
34
defined structure. Former GE chairman Jack Welch coined the term because he wanted
to eliminate vertical and horizontal boundaries within GE and break down external barriers
between the company and its customers and suppliers. Although the idea of eliminating
boundaries may seem odd, many of today’s most successful organizations are finding that
they can operate most effectively by remaining flexible and unstructured: that the ideal
structure for them is not having a rigid, bounded, and predefined structure. 35
What do we mean by “boundaries”? There are two types: (1) internal—the horizontal ones
imposed by work specialization and departmentalization and the vertical ones that separate
employees into organizational levels and hierarchies; and (2) external—the boundaries that
separate the organization from its customers, suppliers, and other stakeholders. To minimize or
eliminate these boundaries, managers might use virtual or network structural designs.
A virtual organization consists of a small core of full-time employees and outside
36
specialists temporarily hired as needed to work on projects. An example is when Second
Life, a company creating a virtual world of colorful online avatars, was building its software.
Founder Philip Rosedale hired programmers from around the world and divided up the work
into about 1,600 individual tasks, “from setting up databases to fixing bugs.” The process
37
worked so well, the company used it for all sorts of work. Another example is Nashville-
based Emma Inc., an e-mail marketing firm with 100 employees who work from home or
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offices in Austin, Denver, New York, and Portland. The biggest challenge they’ve faced is
project structure creating a “virtual” culture, a task made more challenging by the fact that the organization
A structure in which employees continuously work is virtual. The inspiration for this structural approach comes from the film industry. There,
on projects
people are essentially “free agents” who move from project to project applying their skills—
boundaryless organization directing, talent casting, costuming, makeup, set design, and so forth—as needed.
An organization whose design is not defined by, Another structural option for managers wanting to minimize or eliminate organizational
or limited to, boundaries imposed by a predefined boundaries is a network organization, which is one that uses its own employees to do some
structure
work activities and networks of outside suppliers to provide other needed product compo-
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virtual organization nents or work processes. This organizational form is sometimes called a modular organiza-
An organization that consists of a small core of full- tion by manufacturing firms. This structural approach allows organizations to concentrate
40
time employees and outside specialists temporarily
hired as needed to work on projects on what they do best by contracting out other activities to companies that do those activities
best. Many companies are using such an approach for certain organizational work activi-
network organization ties. For instance, the head of development for Boeing’s 787 airplane manages thousands of
An organization that uses its own employees
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to do some work activities and networks of employees and some 100 suppliers at more than 100 sites in different countries. Sweden’s
outside suppliers to provide other needed product Ericsson contracts its manufacturing and even some of its research and development to more
components or work processes 42
cost-effective contractors in New Delhi, Singapore, California, and other global locations.