In today’s ever-shifting business environment, it is fundamentally important for modern organizations to develop structures that will enhance fast information turnover to facilitate equally fast decision-making processes aimed at sustaining the competitive advantage of these organizations.
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To achieve this important feat, organizations have turned away from maintaining rigid structures and embraced the creation and internalization of permeable structures and processes that facilitate the free movement of information across all levels of the organization.
Such organizations are known to be boundaryless, not because they have done away with the hierarchies of authority and curtailed separation of tasks, processes, and places, but for the reason that they have allowed existing boundaries to become more permeable for greater fluidity of movement of information, knowledge, decisions, ideas, actions, and concepts throughout the organization.
This kind of arrangement has also served to enhance an organization’s capacity to respond to the changes arising in the environment since information flows much faster and freely to all levels of the organization where it is critically needed to make sound decisions.
It can be revealed that some contemporary organizations such as IBM and GM failed to remain competitive in the global market due to their stiff and calcified organizational structures.
Modern successful organizations such as Wal-Mart and GE Capital have created their structures based on speed, flexibility, integration, and innovation as opposed to the old-school management thought, which lay focus on organizational size, role-clarity, specialization, and control.
These modern structures, which are characteristic of a boundaryless organization, have enabled companies to cope with fast information turnover witnessed in the 21st century, thus enhancing their success and effectiveness.
For instance, flexibility has enabled decision-making processes to be decentralized, while investments in newer technologies have made it possible to design fast and flexible organizational processes for gathering and utilizing competitive intelligence.
These capabilities inarguably offer modern organizations the capability to have the right type of information and synthesize it as it comes for purposes of achieving the intended business and organizational outcomes.
Modern organizations focused on being at the top of the game have significantly reduced their levels of vertical boundaries to necessitate faster information flow from the senior managers to the frontline employees. These organizations are no longer interested on levels of authority or rank; rather, they are interested in who has the innovative ideas that are critically needed to drive the organization’s agenda forward.
These organizations are also interested in creating structures and processes that enhance faster information flow between functions, roles, product lines, or units through the development of permeable horizontal boundaries.
In addition, the organizations have realized that creating fixated external boundaries, especially between themselves and their suppliers and customers diffuses effectiveness and proper flow of essential information.
As such, these modern organizations have resulted in creating thinner permeable boundaries in the hope that the confluence of interests and information shared between the organization and its customers, suppliers, and other interested parties would generate much more efficient operations and growth. This has worked extremely well for Wal-Mart, the leading supermarket retailer.
Lastly, these organizations are actively engaging in mechanisms that will continually open up geographic boundaries to enable more innovative practices and good ideas to pass on to the organizations in anticipation of using these new practices and information to further their business goals and maintain their competitive advantage.
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The convergence of technology and workforce mobility has enabled these organizations to create more permeable geographic boundaries.