Question

Using examples, define and describe the advantages and disadvantages of the boundaryless organization. (8)

Answer 1

Boundaryless organizations are new approach to organization structure where the barriers of horizontal and vertical approach are eliminated. Jack Welsh coined the term in 1990 to explain the future he wanted to see in corporate culture. If we consider a traditional hierarchy structure they have following limitations:

• Multiple vertical boundaries between levels

• Huge barriers in horizontal functional levels

• External barriers between suppliers, vendors and customers

• Geographic boundaries between locations and people working in silos

To reduce and gradually remove all these barriers, the concept of boundary less organization was discussed. Having such an approach enables the following:

• Higher levels of trust within all stakeholders

• Higher collaboration between internal teams

• Transparent and higher visibility to data and information flow within the system

• Enable outsourcing of non-key activities

• Increase collaboration with external parties

Two major examples of boundary less originations are Boeing and Apple. Both of them have empowered the employees to take key decisions, involvement of cross functional teams in all projects and data sharing with external suppliers for end to end supply chain.

Few advantages of such an organization are:

• Helps in optimal use of all resource talents

• Enables quicker response to crisis situations

• Helps in promoting a win-win situation with external partners

• Helps in freeing up the higher management to take key decisions

• Encourages collaborative teamwork

• Increased data transparency

• Enables sharing of costs and skills

Few disadvantages of such an organization are:

• Difficult to overcome the political barriers within the organization

• Needs strong leadership vision and ethics to make it happen

• Time consuming if not properly implemented

• Will not work in areas where high trust in not involved

• Diminishes future planning if teams work collaboratively all the time

• Decreases operational and furcation control of senior leaders