A

boundary less organization is a

contemporary approach in organizational
design. It is a organization that is not defined
by or limited to, the horizontal, vertical, or
external boundaries imposed by a predefined
structure.

boundary less organization seeks to remove

vertical, horizontal, and external barriers.so
that employees, managers, customers, and
suppliers can work together, share ideas,and
identify the best ideas for the organization.
E.g. Wal-Mart has approached P & G
regarding warehousing & distribution, where
as P&G gained access to Wal-Marts daily
sales information

There are four types of boundaries that

organizations may possess viz.
Vertical : Boundary between layers of an
organization.
Horizontal : Boundary between functional
units of an organization.

 External:

Between an organization &

environment
outside
i.e.
customers,
suppliers,government agencies etc.

Geographic:

among different units of an

organization located in different countries.

 NETWORK
VIRTUAL

ORGANIZATIONS.

ORGANIZATIONS.

MODULAR

ORGANIZATIONS.

 In

a network organization, various functions

are coordinated as much by market
mechanisms as by managers and formal lines
of authority.
Emphasis is placed on who can do what most
effectively and economically rather than on
fixed ties dictated by an organizational
chart.

 All

of the assets necessary to produce a

finished product or service are present in the
network as a whole, not held in-house by one
firm.

 The

most interesting networks are dynamic

or virtual organizations.
In a virtual organization an alliance of
independent companies share skills, costs,
and access to one anothers markets.
It consists of a network of continually
evolving independent companies.

 Each

partner in a virtual organization

contributes only in its area of core
competencies.
The key advantage of network and virtual
organizations is their flexibility and
adaptability.

modular organization is an organization

that performs a few core functions and
outsources noncore activities to specialists
and suppliers.
Services that are often outsourced include
the manufacture of parts, trucking, catering,
data processing, and accounting.
Thus, modular organizations are like hubs
that are surrounded by networks of suppliers
that can be added or removed as needed

 By

outsourcing noncore activities, modular

organizations are able to keep unit costs low
and develop new products more rapidly.
The job description should be worker related
and not work related, the employees should
be flexible, adaptable, open minded,
motivate others, etc.

Empowered teams
Innovation
Collaboration/integration
Customer relation
Foreign market
Manage expensive technology
Flat structures
Cross functional team
Participative decisions
Trust and interdependency
Mutual accountability
360-degree appraisals

 People

issues:

Since it is Cross hierarchical teams which

include top executives, model managers,
supervisors and operative employees who
participate in decision making practices and the
use of 360 degree performance appraisals in
which peers and others above and below the
employee evaluate performance.
Many times this creates ego hassles amongst the
employees which lead to problems.

 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 small
organizations 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.

The concept of Boundryless organizations

began at G.E.
Jack Welch ,former CEO ,coined the term.
Jack joined GE in 1960.
Despite the fast and exciting work
environment, there was too much of
bureaucracy .
He almost quit the organisation due to this
reason.
In 1980,he became the 8th CEO of GE .

 He

believed that rigid organizations were

poorly structured to compete in the fastmoving, competitive environment .
Hence ,in 1990 he introduced WORKOUT,GEs boundary breaking program.
In

1992, he described boundarylessness

this way:
GE's diversity creates a huge laboratory of
innovation and ideas that reside in each of the
businesses, and mining them is both our challenge
and an awesome opportunity. Boundaryless behavior
is what integrates us and turns this opportunity into
reality, creating the real value of a multi-business
company -- the big competitive advantage we call
Integrated Diversity

 Jack

believed that too many business would

hamper productivity.
Focused on business that are No 1 in market.
He believed that G.E would prosper if it
acquires and divest companies and remains
focused.
Currently,GE is the 3rd largest in the world as
per Forbes Global 2000.

G.E.s core competency was sharing

ideas across businesses .
Revamped as a laboratory that shared ideas,
financial resources and managers.
Converted GE into an open learning
organization.
An idea can be from any source. So, we will
search the globe for ideas. We will share
what we know from others to get what they
know.

 It

was necessary to make the company more

competitive.
Bureaucracy led to chocking initiative and
enthusiasm.
Led to lot of downsizing which was met with
criticism.
He removed those layers of management
that he believed, were clogging GE
Thus, he removed the entire 2nd and 3rd
levels of management.

He gave employees right and responsibility to

come up with their own idea for solving
problems.
Everyone has a say in the way the organization
was managed.
He decided that the best way to give a sense of
stability was to let them take part in company
decision making to make employees more
productive
By getting more involvement on the side of the
employees, Jack argued that they would be
helping to strengthen G.E and healthy growing
businesses were the best guarantee for job
security.

 Boundary

less organizations communicate

mainly through email, phone and other
virtual methods rather than more traditional
face-to-face communication.
This freedom of telecommunication with
international employees removes
geographical barriers and enhances
productivity.

Jack Welch made General Electric leaner,

tougher, more competitive with fewer people,
fewer business units and fewer management.
He lead a series of revolutions at General
Electric, seeking to recast a highly
bureaucratic, labor- intensive corporate giant
into a highly productive machine that would
function with the speed and simplicity of a
small entrepreneur company.
Jack Welch, Americas most successful
C.E.O, had transform General Electric from a
25$billion company into a 90$ billion
corporate giant.
-HARWARD BUSINESS REVIEW