According to some management experts, boundaryless organizations are the best for the 21st century innovative economy.
Credited for coining the name term, Jack Welch strived to ensure this organizational structure during his time in General Electric. And for the most part, it proved to be successful.
But what does the boundaryless organization entail?
Stick me through this article to learn about the characteristics of boundaryless organizations, the nature of their design, types, pros and cons, and more!
Let’s dive in!
1. Virtual Collaboration
Boundaryless organizations allow collaboration with other sectors of the business as vertical, horizontal, and external barriers of communication are done away with.
Due to this widespread free flow of information, face-to-face communication while exchanging ideas is impossible. Therefore, these companies rely on remote collaboration through various technologies for efficiency.
A boundaryless organization would collaborate virtually through:
- Video calls where face to face communication can be done remotely
- Central content storage for easy access and sharing of files
- Online visual boards where co-workers can contribute ideas
Virtual collaboration tools are at the heart of a boundless organization since they might be partnering with other physically distant teams and companies as far as the furthest corner of the globe.
2. Tech Savvy
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For virtual collaboration and other tech-reliant activities to take place efficiently, the workers of the company are generally tech-savvy. From the CEO to the janitor, basic teleconferencing and automation knowledge is a necessity.
A boundless organization embraces most technology inventions that make work easier. It rids outdated procedures and equipment to make way for better infrastructure friendly to employees, customers, and suppliers.
Collaboration software like Slack, GoogleDocs, Teamwork Projects, ConceptBoard, and Wrike are highly used in a boundaryless organization. Furthermore, devices like phones, tablets, servers, printers, and computers are vastly interconnected which calls for basic tech knowledge among co-workers for smooth operations.
3. Liberal Decision Making
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A boundaryless organization uses decentralized management where the senior management leaves the subordinates to make decisions on the carrying out of the projects as they handle bigger resolutions like expanding the business.
Here, employees own their projects and make decisions based on their insight. This is contrary to traditional organizations where you’re told what to do and the way you should do it.
In the organization without borders, the employee gets an overview of the project’s contribution to the company mission and figures out how they can deliver the expected results. What matters is that the worker stays true to the vision and follows company ethics.
This organizational design promotes self-motivation and individual thinking, boosting the self-confidence of workers as they, each in their unique way, contribute to the company’s vision.
In an era where freedom of expression is much desired, many enjoy the fact that they can spread their wings and stay innovative in the boundaryless workplace. Adventurous, entrepreneurial, and visionary personalities thrive in such organizations.
4. Flexible Working Schedules
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Along with the freedom to make decisions, a boundaryless organization is also characterized by flexible working hours. As long as they fulfill company objectives, workers are left to manage their own time.
Flexible working schedules might be in the form of:
- Telecommuting: Part-time remote working and some days in the office
- Remote working: All work is done from home mostly to overcome geographical barriers
- Customized working hours: To suit each worker’s varying energy levels during different times of the day, borderless companies offer diverse working timelines
- Condensed workweeks: To promote employee productivity, some companies introduce a 4-day workweek, a customized 40-hour workweek, and so forth.
5. Limited Supervision
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The effect of removing vertical manager-employee borders in a boundaryless organization leads to limited supervision.
Since workers own their projects, work flexible working hours, and make most of the decisions for the effective completion of projects, they mostly self-supervise.
As mentioned earlier, the boundless organizational design promotes self-motivation driven by vision and ethics. So while the employees experience little supervision, they strive to fulfill the objectives they collaboratively came up with.
While some employees wasting time and resources, the boundaryless organizational structure calls for high-quality recruitment to ensure a vision-invested workforce. This may be the reason why Jack Welch had to oversee around 120,000 layoffs while expanding GE which earned him the nickname “Neutron Jack.”
He used to say, “If we get the right people in the right job we’ve won the game.”
6. Minimized Corporate Hierarchy
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Traditional organizations comprise many hierarchies in various departments. Everyone has a boss who also has a boss and the chain continues.
But in a boundless organization, corporate hierarchies are minimal.
Instead of power, departments are defined by their function. So instead of having a plethora of managing committees, the company is divided into functionality-defining sectors or teams like finance, advertisement, and legal.
7. Horizontal Career Paths
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Since the boundaryless organizational system focuses more on functionality than titles, most career moves are horizontal. What does this mean?
Instead of employees focusing on climbing the corporate ladder to earn more income and status, the structure promotes bridging of skills to be more functional in the business.
Moving across departments or training on an additional skill to be more equipped in a job within a department is more applicable than seeking a more executive level.
This benefits long-term corporate growth in any company. After all, if you are multi-skilled, it’s easier to climb up the corporate ladder.
8. Customer Focused
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Borderless organizations esteem the philosophy of “customer is king” highly. This is why they pull down external barriers to communication by allowing continuous feedback from customers straight to workers.
In fact, customers make most of the decisions the senior management traditionally made.
For instance, customers can ask the factories to increase inventory, a request that is left to executive management in traditional organizations. Also, the customer can rate services and give feedback directly to employees that they may improve.
9. Emphasis on Company Values
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With no boundaries, an organization can be chaotic. However, one element that minimizes that is the sensitization of company values in every process.
When recruiting employees, a boundaryless organization focuses on individuals whose values match those of the company. This way, they weed out those in need of constant supervision.
In a nutshell, boundaryless organizations aren’t for everyone. They’re for those who desire to advance the company’s vision especially if it matches their interests.
What Is a Boundaryless Organizational Design?
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A boundaryless organizational design operates without vertical, horizontal, and external barriers of communication to create a free flow of information and ideas among workers, customers, suppliers, and other stakeholders for continuous innovation and growth in this constantly changing world.
The characteristics of a boundaryless organization include:
- Virtual collaboration
- Heavy use of technology,
- Employee freedom to make decisions
- Flexible working hours
- Limited supervision
- Minimal corporate hierarchies,
- Horizontal career growth
- Customer focus
- Emphasis on company values.
Types of Boundaryless Organization
Although they marry a lot in their characteristics, there are five types of boundaryless organizations. They include:
Modular barrierless organizations focus on fulfilling their core purpose and outsource other necessary functionalities such as accounting, legal, and data processing.
The absence of distraction by supporting functions helps them produce products and services of high quality and quantity while saving on costs.
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These types of organizations are mostly made up of visionaries allowed to exercise their creativity by learning and experimenting with their ideas to fulfill the vision of the company.
This is by far the most boundaryless organization type since the connection of different specialists is highly encouraged for the exchange of ideas and subsequently, continual innovation.
In this organizational structure, the tasks (whether central or supporting) are distributed according to who will do the task most cost-effectively and efficiently.
Network boundless organizations make it easy for partners to work together towards one goal since all resources required to perform the tasks are available across the whole network.
Virtual organizations use technology to operate with other independent organizations, each contributing to tasks depending on their expertise.
Also known as dynamic organizations, these highly adaptable firms share their skills, costs, and even market access which maximizes the flexibility of each independent firm.
Strategic alliance organizations
These are similar organizations (mostly in the same industry) that form a partnership to work towards a similar goal greater than each of their functions.
They share various resources to fulfill their mutual purpose, whether in the short term or long term. Examples of strategic alliance organizations include Louis Vuitton & BMW, Spotify & Uber, Starbucks & Barnes & Noble, and Hewlett-Packard & Disney, among others.
What Is an Example of a Boundaryless Organization?
Organizations that have strived to incorporate the boundaryless organizational structures include:
- General Electric: While things have changed after Welch’s term as CEO, GE is still quite boundaryless
- Apple: Although it has hierarchical components, Apple is largely a learning boundaryless organization
- Boeing: Having divided the organization into borderless units like Boeing Global Services, this company features a boundaryless structure
- Airbus Industries: Striving to bury Boeing their competition, this organization formed strategic alliances with European firms to develop and market commercial jets
- Toyota: While managing various relationships with manufacturers and suppliers, Toyota features virtual and modular boundaryless organizational structures
What Are Some Advantages and Disadvantages of a Boundaryless Organization?
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This organizational structure is amazing, especially in this boundaryless era. But it also has its challenges. Check out the pros and cons of a borderless organizational structure below:
Advantages of a boundaryless organization
- Highly flexible
- Exceptionally responsive with all internal and external participants exchanging ideas and feedback.
- Uses skills efficiently
- Empowers workers to be self-driven and deep thinkers
- Promotes innovation
- Provides space to create work-life balance on workers’ standards
Disadvantages of a boundaryless organization
- Communication difficulties due to expansive diverse collaboration
- Limited control as everyone is left to handle tasks uniquely
- The chain of management may be confusing
- Compensation matters become puzzling
How Did Jack Welch Create a Boundaryless Organization?
To build a boundaryless organization, Welch created a GE Work-Out process made up of successive structured forums that brought together people of different expertise, geographies, and management levels to make problem-solving decisions in real-time.
Closing Thoughts on Boundaryless Organizations
Borderless organizations focus on creating one identity among all participants in an organization — a people invested in the fulfillment of the company’s vision. While such firms still have some boundaries/chains of management, they ensure as much free flow of ideas for innovation and expansion.
Do you think boundaryless organizational structures are effective? Why? Let’s chat in the comments!