21st Century Organizational Trends

There are five key organizational trends that you should be aware of.

Globalization

• Increasingly globalized sales, manufacturing, research, management
• Movement from direct exports to having sales offices in different countries to having manufacturing to all functions spread across the globe
• Increasingly globalized labor market
• Due to:
  • reduced cost and improved quality of international transportation and communication
  • search for unsaturated markets
  • exploit regional cost and expertise differences

Diversity

• Workforce getting more heterogeneous sexually, racially, culturally, individually, etc.
• Source of both innovation and conflict/communication problems
• Need to cope with different styles of interaction, dress, presentation, physical appearance
• Due to:
  • changing demographics
  • globalization of the labor market

Flexible

• Organizational systems and processes and people that can respond differently to different situations
• Fewer detailed rules and procedures
• Greater autonomy, encouragement for initiative
• Customizable employment relationships: telecommuting, job sharing, mommy tracks, pay for skills
• Lifetime employability, not lifetime employment
• Due to:
  • differentiated customer needs -- filling them exactly is source of competitive advantage
  • increasing diversity in workplace
  • increased pace of change in technology and markets

Flat

• Fewer levels of management,
• Workers empowered to make decisions
• Fewer differences in responsibility (not in pay) across levels
• Due to:
  • need for speed, which makes it helpful to empower employees to make decisions, which means fewer managers are needed
  • changes in information technology mean less need for the communication and control functions of middle managers
  • globalization means intensified competition, which increases the need to cut costs

Networked

• Direct communication across unit & firm boundaries, ignoring chain of command
• Cross-unit team structures
• Outsourcing & downsizing
• Strategic alliances with competitors and others
  • Now have firms that are your competitors, customers and collaborators all at the same time
• Close coordination among firms (e.g., JIT systems) and information sharing (open computer systems)
• Across the board contact with customers, not just official boundary spanners
• Customization
• Decentralization
• Due to:
  • new information technologies, especially groupware, client-server, distributed computing
  • fast changing customer needs and competitor offerings
  • more complicated products require better integration of manufacturing, design, and marketing functions

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Here is a diagram linking up all the concepts above.

The dashed arrows with blue heads mean "creates the need for", while the solid arrows with black heads mean "causes" or "enables".