Analysis Of The New Organisational Forms Business Essay Example

crucial part of the value chain. If digital technologies can easily take over the company's role, then its strategy needs to be reevaluated. This same level of transparency is also noticeable in product reviews which previously depended on input from store staff, traditional media outlets, and personal recommendations. The most reliable information was acquired through personal connections.

The internet has allowed customers to share their opinions on products and services, resulting in a system of rich product reviews. Statistics show that 81% of holiday shoppers read online customer reviews and 86% of customers read business reviews before making purchase decisions. Furthermore, 90% of these customers say they trust these reviews (Bazzarvoice 2009, "Industry Statistics" 23May2009). The introduction of digital technology has caused a shift in how consumers make buying decisions and express their opinions. Managers must be aware of and adapt to this new change.

The Rapid Advancement of Product Development:

In today's rapidly advancing technological landscape, engineering innovation has experienced significant growth year after year. As products become increasingly complex, it has become more challenging for any single company to handle all aspects of product creation. In his article "Rethinking in a Network World," Dan Tapscott emphasizes that many companies have transitioned from being manufacturing industries to becoming system planners. The production process has now become standardized as companies like Mercedes-Benz and IBM no longer manufacture their own products; instead, they rely on expert contractors to produce goods on their behalf.

However, the company is implementing a strategy that centers on traditional manufacturing sources of competitive advantage. They are also adopting an orientation strategy. Like Dell, they recognize that there is no advantage in manufacturing their own

products. The idea of "B-Web" is being applied across industries, with each company concentrating on its core competency. This approach enables them to be more adaptable, innovative, cost-efficient, and profitable compared to their vertically integrated rivals (Don Tapscott, Rethinking in a Networked World).

The primary idea that has revolutionized the way products are designed, manufactured, distributed, marketed, and sold. Employees working in these business functions should be aware of this changing trend.

Rapid Advancement of Technology:

The technological revolution has led to intense competition among electronics industries on a daily basis. What is considered the best and fastest today will become outdated technology tomorrow. It is a global competition to be the top player. Electronics manufacturing companies are engaged in a fierce battle, resulting in both benefits and casualties for us.

E-commerce Today:

E-commerce refers to the use of the internet and the web for conducting business transactions.

E-commerce emerged in 1995 with the advent of netscape.com, which started receiving advertisements from major corporations. This event revolutionized the way organizations and individuals conducted digital commercial transactions, popularizing the internet as a platform for advertising and sales. Similar to past commercial advancements like the telephone, radio, and television, e-commerce experienced remarkable growth initially. However, this rapid expansion also resulted in an e-commerce stock market bubble.

Despite the failures encountered by many e-commerce companies, several prominent ones such as Amazon, Expedia, eBay, and Google have achieved success. These companies have seen substantial revenue growth, established profitable business models, and witnessed an increase in stock values. In general, the e-commerce industry had a successful outcome in 2007. One important change in product development is the accelerated release of new products thanks to technological advancements.

Apple's 2008

annual report acknowledges the rapid advancements in technology within various industries, such as personal computers, consumer electronics, and mobile computing. The report states that a company's success relies on its ability to consistently deliver competitive products, services, and technologies to the market. A new type of organization has emerged with the goal of enhancing administration by meeting stakeholders' needs while remaining adaptable and productive.

These innovative organizational forms possess several key characteristics. Firstly, employee input is crucial as they are closest to desired outcomes and have knowledge about whether preferred results are achieved with stakeholders. Secondly, these organizations have an organic nature with fewer regulations and constantly evolving boundaries. Lastly, authority is based on capability rather than merely serving the organization itself.

To take advantage of economies of scale, associations collaborate through networks and strategic alliances. Additionally, teams are used at lower levels to leverage economies of scale while ensuring full employee engagement. Decentralized administrations result in less middle management and foster direct feedback between top management and product/service providers, thereby reducing overhead costs.The prioritization of reflection and inquiry is crucial for fostering learning organizations that promote awareness of the environment, changes, patterns, and themes. These organizations are embracing new forms of organizational structures which are revolutionizing industries. These include the network structure, where multiple separate administrations are connected to optimize interaction and achieve common goals. Another emerging form is virtual administration, where members primarily or entirely interact through telecommunications without physical meetings. Additionally, self-managed teams consisting of 5-15 individuals with diverse skills have sufficient authorization and access to promptly produce their product. Learning administrations in dynamic environments must quickly identify and rectify errors by receiving ongoing

feedback from internal and external sources. This helps them let go of outdated beliefs and remain open to new information. Similar to biological systems striving for survival and growth, self-organizing systems can adjust their structure and internal processes based on feedback received from the environment.

In response to the increasing complexity, companies adapt their structures and forms accordingly. Eventually, they undergo significant changes to align with the external environment. The current competitive market necessitates a different kind of organization. Companies must consistently deliver innovative products. Those with a hierarchical structure are ill-equipped to meet these demands.

The main challenge with hierarchical structure lies in middle management, which serves as a buffer between quick decision making and timely action. Google serves as a prime example, operating in a rapidly changing market where future success greatly depends on the ability to sustain innovation and regularly update existing products. To address this, Google has embraced perpetual beta, constantly updating their product to maintain a constant state of flux. This sort of environment necessitates a radical shift in organizational structure, making Google an excellent example of a flat administration.

The applied scientists and interior decorators at Google are organized into cods of approximately 3-6 individuals, with one member being designated as the undertaking director. This group operates in a self-directed manner and can change their direction without needing approval from top management. If a Google employee has a novel idea, all they need to do is convince a certain number of their co-workers to join their cod. Once the threshold of applied scientists is reached, the undertaking is automatically approved. This results in a highly dynamic administration that is self-perpetuating. Google has

capitalized on its most valuable resource, its human capital, and empowered them to rapidly create and offer new products and services.

However, Google still maintains a traditional hierarchical structure in certain aspects. Their Legal, HR, Investment, Financial, Sales, and M sections adhere to this traditional hierarchy. Eric Schmidt recognizes that some business functions are better suited for a nodal structure, while others benefit from a traditional hierarchical structure.

In the new economy, managers must establish an organization that operates organically. Traditional rigid structures can stifle dynamism, while flat or nodal-based organizations are associated with innovative and fast-paced environments. It is crucial for managers to minimize conflicts within the organization and encourage their human capital to contribute and innovate strategically.

In this new economy, employees who aspire to work in highly innovative areas should focus on developing project management skills and gaining a strong understanding of the business world. Candidates who can bridge the gap between executives and pioneers will quickly excel in their careers.

The threat of disruption is ever present in technology, as it aims to replace existing processes with more efficient and cost-effective solutions.Directors must possess awareness of their companies' vulnerabilities and ensure they capitalize on emerging technology. Fred Wilson from Union Square Ventures believes that companies fully immersed in digital operations are the most vulnerable to disruptive technologies. This perspective is reasonable.

However, it offers directors a fundamental guideline for assessing the digital risks of their companies. If someone wants to establish a company with minimal or no investment, the internet provides the simplest approach. The cost of software development is decreasing every year, thereby increasing the potential for new competitors entering the market. Services such as

Google AdSense have allowed businesses with limited advertising budgets to efficiently target a specific market segment.

These low barriers to entry allow ordinary people to easily set up a new concern.
Net Coevals: The "Net Coevals'' as coined by Don Tapscott, presents companies with even more challenges. The N-Gens are a product of technology and have grown up during a period of technological revolution. Due to their experiences and engagement with technology, their brains have developed in a different manner compared to their parents.

The N-Gen individual views a computer as their parent might perceive a calculator. It is simply a device for achieving a desired outcome. However, the N-Gen individual possesses a deeper understanding and appreciation for technology that goes beyond functionality and embraces adaptability. They have an inherent talent for solving technical issues by adjusting to the specific system they are using.

This approach to job resolution is why the N-Gen will be one of the most revolutionary products 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 from those of an older demographic. The N-Gen are eager to collaborate, share information, and challenge the status quo.

They are both individualistic and collectivized while demonstrating lower power different characteristic than older coevalss. This is understandable as the N-Gen grew up during a period where authorization was not respected, illegal downloading of music was becoming the norm, and traditional dictators were losing power.

Decision: Digital technology has not only affected the structure of industries and administrations but has also altered the central environment in which they operate. The internet has given power to the clients

to make informed buying decisions by increasing transparency and enabling the viral spreading of consumer sentiment. Contrary to N. Carr's beliefs, this has added significant value to the economy.

While the impact of cyberspace on profitability may be acknowledged, it is important to recognize that shrinking markets often lead to increased efficiency. Therefore, managers and employees who find themselves in a middle position must adapt themselves or their company within the value chain. Thanks to technology, our perception of product development has been redefined. Engineers are now able to design and release increasingly complex products in shorter time frames.

This progress has been accomplished through technological advancements and significant changes in organizational structure. For example, Computer Aided Manufacturing (CAM) allows engineers to extensively test an airplane wing even before it is physically constructed. Open standards like XML facilitate communication between machines from different manufacturers. Product Life-cycle Management (PLM) software enables companies to oversee the entire lifespan of a product, covering everything from conceptualization and design to manufacturing, service, and disposal.

As organizations are made up of multiple interconnected and interdependent nodes, it is crucial for leaders to have a comprehensive understanding of PLM and its connection to other aspects of the business. By examining Porter's 5 forces model, it becomes evident that advancements in engineering have led to a significantly more competitive landscape across various industries. In order to stay competitive, companies must embrace innovation, agility, responsiveness, and self-sustainability. Exemplary companies like Google demonstrate that a modular, nodal, or hierarchical organizational structure is most effective in advanced environments.

Innovative companies must fully utilize their human resources and empower them to quickly implement and contribute to the company's strategic decisions.

Both managers and employees need to understand that the person at the top can no longer be the sole source of knowledge for the organization, as stated by Peter Senge from MIT Sloan School of Management. Organizations are not only impacted directly by technology, but also face numerous challenges from technological products. The "Net Generation" is a byproduct of technology and will present significant challenges to organizations in the next decade. The N-Gen possess the ability to solve systemic issues by adapting technology in a modular format.

The N-Gen's eagerness to collaborate, adaptability to accept change, and refusal to settle for the status quo present both a challenge and an opportunity for future administrations and directors.