Sie sind auf Seite 1von 7

New Organisational Forms:

Digital Technologies are changing the structure of many industries and the organisations
operating within them. Identify and debate the opportunities and challenges for managers
and employees operating within these new forms of organisations.

By: Mark Regan


Table of Contents

New Organisational Forms ........................................................................................2

1. Introduction .............................................................................................................................2

2. Transparency & The Empowered Customer ......................................................................2

3. Rapid Product Development ................................................................................................3

4. New Organisational Form .....................................................................................................3

5. Threat of Disruption ...............................................................................................................4

6. Conclusion ...............................................................................................................................5

Bibliography ................................................................................................................6

1. Reports .....................................................................................................................................6

2. Webpages .................................................................................................................................6

M A R K R E G A N 1 / 7

COMMENTS

New Organisational Forms


1. Introduction
Technology is not only changing the structure of industries and organisations, it is changing
almost every aspect of how consumers live their lives. The environment in which businesses
operate is changing rapidly. The ability for companies to embrace technology and use it to
create sustained competitive advantage is more important now than ever before.

This report will look at some of the changes that have been cause by digital technology, and
identify the challenges and opportunities that employees and managers are likely to face.

2. Transparency & The Empowered Customer


The advent of the internet and mobile technology has shifted the power from the seller to
the buyer. Never before have consumers been so empowered when making purchasing
decisions. Price comparison sites like GoCompare.co.uk, MoneySuperMarket.com &
kelkoo.co.uk have enabled customer to instantly compare prices of products and services
across a wide range of industries. Creating this level of transparency has had a profound
effect on many industries.

In particular, the “middle men” have suffered the most. As consumers use the internet to
find the best value deals, wholesalers, agents, brokers and retail stores have suffered. One of
Tapscott’s twelve themes of the new economy is “Disintermediation”. Tapscott makes the
valid point that middle men are “in the business of executing transactions, brokering, or
boosting communications in a pre-digital economy”. As technology standards become more
commonplace, the need for intermediaries will diminish.

Both managers and employees need to be aware of this trend as it is likely to affect the
future of the company in which they work. In particular, managers need to ensure that the
company remains part of the value chain. If the purpose of the company can be easily
replaced by digital technologies, then the company’s strategy need to be analysed.

This level of transparency can also be seen when looking at product reviews. Prior to the
internet, purchasing decisions were primarily based on information from store employees,
traditional media & personal recommendations. Often the most trustworthy information
you could receive was through personal contacts. The internet has enabled customers to
share their opinions about products and services; resulting in an information rich product
review system. Statistics show that 81% of online holiday shoppers read online customer
reviews and 86% of consumers read online business reviews before making purchasing
decisions; 90% of whom say they trust these reviews.1

No longer are companies able to hide behind the corporate facade of public relations.
Customers now place more emphasis on user generated customer reviews than information
from media reviews, mass marketing or in store sales teams2. Companies need to focus on
the cost of negative publicity on the internet. Platforms such as Twitter and Facebook have
enabled the viral spreading of consumer sentiment.

Digital technology has caused a paradigm shift in the way in which consumers make
purchasing decisions and voice their opinion. Managers need to both embrace and be

1 BazaarVoice.com 2009, “Industry Statistics”, 23 May 2009,


http://www.bazaarvoice.com/industryStats.html.

2 Social Media Marketing: The Right Strategy for Tough Economic Times" Awareness, 2008
M A R K R E G A N 2 / 7

COMMENTS

cautious of this new movement. As Nicholas Carr suggests, the Internet may not necessarily
be a blessing.

3. Rapid Product Development


Reflecting Moore’s Law, technological innovation has accelerated year on year. As products
have become increasingly complex, the ability for any one company to create all aspects of a
product have diminished. In Dan Tapscott’s paper “Rethinking in a Networked World”, he
acknowledges that many blue chip companies are no longer manufactures, they are systems
integrators. The process of manufacturing has almost become commoditized. Companies
like Mercedes-Benz and IBM no longer manufacture their own products; but rather they
find expert contractors to manufacture their products on their behalf. The process of
outsourcing is a classic double edged sword. On one hand, the company is benefiting form
the contractors expertise in manufacturing, ability to scale & their supply chain.
Additionally, the contractee can distance themselves from the contentious area of
“sweatshop” labour in the middle east. However, the company is sacrificing a traditional
source of competitive advantage; manufacturing. In doing so, they are adopting a new
network orientated strategy.

Companies like Dell realise that there is no competitive advantage to be gained by


manufacturing their own products. Establishing “B-Webs across industries, in which each
business focuses on it’s core competence, are proving to be more supple, innovative, cost-
efficient and profitable than their vertically integrated competitors” (Don Tapscott,
Rethinking in a Networked World). It is this very thinking that has changed the way in
which products are designed, manufactured, distributed, marketed & sold. Employees
operating within these business functions must be aware of this changing trend.

One of the most noticeable changes in product development is the speed at which new
products are released. Apple notes in it’s annual report 2008 that “because the personal
computer, consumer electronics, and mobile computing industries are characterised by
rapid technological advances, the company’s ability to compete successfully is heavily
dependent upon it’s ability to ensure a continual and timely flow of competitive products,
services and technologies to the marketplace.” This trend can be seen across the board and is
in a large part due to advancements in technology.

4. New Organisational Form


The competitive nature of today’s marketplace requires a different type of organisation.
Companies need to be agile and responsive in order to create innovative products on a
regular basis. Companies that have a hierarchal structure are not well positioned to meet
these needs. One of the problem associated with hierarchal structures are middle
management. In order for a company to be agile, decisions need to be made as fast as
possible. The existence of middle management creates a buffer layer between decision and
action.

Google is a company that operates in a rapidly changing marketplace, and much of it’s
future success depends on it’s ability to sustain innovation and update existing products on
a regular basis. In fact, Google has adopted a strategy known as perpetual beta; updating a
product so often that is remains in a constant state of flux. Competing in such an
environment requires a radical change in organisational structure. Google is a good example
of a flat organisation. It’s engineers and designers are arranged into pods of about 3-6
people whereby one member is appointed project manager. The group is self directed and
has the flexibility to change direction at any stage without the approval of senior
management. Additionally, if a Google employee has an innovative idea, he is only required

M A R K R E G A N 3 / 7

COMMENTS

to convince a certain number of his colleagues to join his pod. When the threshold of
engineers is reached the project is automatically approved. This results in a highly dynamic
organisation which is self propagating. Google has taken advantage of it’s main asset -
human capital - and empowered them to innovate new products and services at a rapid
pace. However, there are aspects of Google that have retained the traditional hierarchal
structure in lieu of the former. Their Legal, HR, Investment, Financial, Sales and M&A
departments have a traditional hierarchal structure. Eric Schmidt acknowledges that certain
business functions are suited to nodal structures and some business functions are suited to
traditional hierarchal structures.

Managers in this “New Economy” need to create an organisation that acts organically.
Traditionally, rigid structures have been placed on organisations; often stifling their
dynamism. Flat or nodal based organisation are often associated with innovative, fast paced
environments. As a manager, it is essential to reduce friction within an organisation as much
as possible; allowing your human capital to innovate and contribute to strategic direction.

Employees that plan on working in highly innovative areas, should try and hone their
project management skills whilst developing a keen appreciation for business. Candidates
that can bridge the gap between executive and innovator will excel quickly through the
ranks.

5. Threat of Disruption
Never before has the threat of disruption been so great. Technology is essentially disruptive;
it aims to replace existing processes with more efficient and cost effective solutions.
Managers must be aware of their companies vulnerabilities and ensure that they take
advantage of emerging technology. According to Fred Wilson of Union Square Ventures,
companies that are end to end digital are most susceptible to disruptive technologies. This is
a logical statement, but it provides managers with a basic rule of thumb for assessing their
companies digital vulnerabilities.

The internet has made it easier for individuals to setup companies with little or no capital
investment. The cost of software development is reducing every year, and with it the threat
of new entrants to the market increases. Services such as Google AdSense have enabled
businesses with limited advertising budgets to effectively target a specific market segment.
Ultimately, these low barriers to entry enable ordinary people to easily setup up a new
business.

Additionally, the “Net Generation” - as coined by Don Tapscott - present companies with
even more challenges. The N-Gen are by products of technology; they have grown up
during a period of technological revolution. Because of their experiences and contact with
technology, their brains have developed in a different manner to their parents. An N-Gen
individual looks at a computer in the same way their parent might look at a calculator. It is
simply a tool for achieving an end goal. However, the N-Gen individual has an appreciation
for technology that goes beyond function and towards adaptation. N-Gen individuals have
the innate ability to solve technological problems by adapting the system they are using.
This modular approach to problem solving is why the N-Gen will be one on the most
disruptive by products of technology in the next decade.

Managers must be aware of this fundamental change in human resource management. The
expectations of the N-Gen are fundamentally different to that of an older demographic. The
N-Gen are eager to collaborate, share information and change the status quo. They are both
individualistic and collectivist whilst showing lower power difference characteristics than
older generations. This is understandable, as the N-Gen grew up during a period where

M A R K R E G A N 4 / 7

COMMENTS

authority was not respected; illegal downloading of music was becoming the norm and
traditional authoritarian institutions were loosing power (Church, Schools, Police).

6. Conclusion
Digital technology has not only affected the structure of industries and organisations; it has
altered the fundamental environment in which they operate. The internet has empowered
consumers to make informed purchasing decisions by increasing transparency and enabling
the viral spreading of consumer sentiment. Contrary to N. Carr’s beliefs, this has added
considerable value to the economy. It may be true that the internet has corroded profitability,
but the very nature of “shrinking the market”3 is synonymous with increased efficiency.
Managers & employees that find themselves in an intermediary position, need to reposition
themselves or the company within the value chain.

Technology has redefined what we understand product development to be. Technology has
enabled engineers to design and deploy products of increasing complexity, in shorter
periods of time. This has been achieved through a series of technological advancements and
fundamental changes in organisational structure. For instance, Computer Aided
Manufacturing (CAM) has enabled engineers to stress test the wing of an aeroplane before it
is even built. Open standards such as XML have enabled machines from different vendors to
communicate with one another. Product Life-cycle Management (PLM) software enables
companies to manage the entire life cycle of a product; “from conception, through design
and manufacture, to service and disposal.” 4 As organisations consist of multiple
interconnected and interdependent nodes, managers must have a holistic appreciation of
PLM and it’s relationship with other aspects of the business.

By analysing Porter’s 5 forces framework, one can see that technology has resulted in a
dramatically more competitive environment across many industries. Companies need to be
innovative, agile, responsive and self propagating in order remain competitive. Innovative
companies such as Google show that a modular, nodal or flat organisation is best suited to
innovative environments. Innovative companies need to take full advantage of their human
capital; enabling them to rapidly innovate and contribute to the companies strategic
decisions. Both managers and employees must realise that “the person at the top can’t learn
for the organisation anymore”. (Peter Senge, MIT Sloan School of Management)

Organisations are not only being affected by technology directly - by products of technology
are presenting many challenges too. The “Net Generation” are a by product of technology
and will pose significant challenges to organisations over the next decade. The N-Gen have
the ability to solve systemic problems by adapting technology in a modular format. Their
eagerness to collaborate, ability to lead and refusal to accept the status quo, make the N-Gen
both a challenge and an opportunity for future organisations and managers.

3 AtGoogleTalks,
http://www.youtube.com/watch?v=mAk1MX3ES_g&feature=channel_page, 23 May 2009.

4 Product Lifecycle Management,


http://en.wikipedia.org/wiki/Product_Lifecycle_Management, 23 May 2009.
M A R K R E G A N 5 / 7

COMMENTS

Bibliography
1. Reports
Nicholas G. Carr 2003, IT Doesn’t Matter, Harvard Business review.

Don Tapscott 2001, Rethinking Strategy in a Networked World (or Why Michael Porter is Wrong
about the Internet), Strategy+Business.

Don Tapscott 1999, Minds over Matter, Business 2.0.

Don Tapscott 2004, The Engine That Drives Success, CIO Magazine.

Rodger Clarke 2004, The Path of Development of Strategic Information System Theory, Xamax
Consultancy Pty Ltd.

Don Tapscott, Alex Lowy, David Ticoll 2006, Blueprint to the Digital Economy.

Hind Benbya, Bill McKelvey 2006, Towards a complexity theory of information systems develop-
ment, UCLA Anderson School of Management.

Joy McGovern 2001, Creating a Knowledge-Based Organisation, The Manchester Review.

Don Tapscott 2004, The Engine That Drives Success, CIO Magazine.

Apple Inc, 2008, Form 10-K, Apple Inc.

2. Webpages
BazaarVoice.com 2009, Industry Statistics, 23 May 2009,
http://www.bazaarvoice.com/industryStats.html.

Wikipedia 2009, Product Lifecycle Management,


http://en.wikipedia.org/wiki/Product_Lifecycle_Management, 23 May 2009.

Google 2009, AtGoogleTalks, 22 May 2009,


http://www.youtube.com/watch?v=mAk1MX3ES_g&feature=channel_page.

M A R K R E G A N 6 / 7

Das könnte Ihnen auch gefallen