Chapter 2 New Conditions, New Organization

Scope of Chapter 2 The retreat from conventional forms of organization Contrasts between conventional and new organizational forms New conditions for organization Implications for organization

Retreat from Conventional Forms of Organization Bureaucracy has been the most prominent form of conventional organization with an over-2000 year history Bureaucracy has, however, been increasingly criticized since the 1950s Many practitioners and analysts believe conventional organizational forms are insufficiently adaptable to meet present requirements

Contrasts between Conventional and New Organizational Forms See Table 2.3, Chapter 2

New Conditions for Organization Globalization New technologies Knowledge-based society Hypercompetition Social accountability

Globalization Increases complexity in the environment of firms Need both to control and to adapt to local situations Hence requirement to maintain standardization and promote flexibilty within the same global organization

New technologies Open up new organizational possibilities Internally, enable simplification of management structures and better integration within them Externally, ease the management of information flows and transactions across organizational boundaries

Knowledge-based society Increased significance of innovation-based differentiation strategy within the knowledge-based economy Intensive use of inter-disciplinary teams to foster innovation and new projects Devolution of initiative to knowledge workers so as to benefit from their expertise and enhance their motivation

Hypercompetition Places a premium on the ability of firms to adjust to new competitive opportunities and threats Need for ‘the flexible firm’, whose organization promotes rapid and appropriate adjustment Mode of organizing should maximize organizational learning aimed at adjusting to hypercompetition

Social accountability Pressures for better corporate governance, corporate social responsibility, and fulfilling work environment Need for normative rather than coercive forms of control that combine accountability with scope for personal intitiative and development Inter-firm networks have to be organized so as to permit leading firms to ensure socially responsible practices by network sub-contractors and partners

Summary of Implications of New Conditions for Organization See Table 2.2, Chapter 2