At the beginning of the 20th century, scientific management prevailed. The organization was conceived as a well-functioning machine that was carefully designed to achieve well-understood goals. Today, we realize the organization is composed of people and success is often tied to the articulation of the work of many in organizations. Globalism and new, more porous conceptions of the organization characterize this new postmodern millennium (Schmidt & Gardner, 1995). The organization per se is less important, as workers create and recreate new organizations, invent new products and services, and adapt to an evolving environment. In this redefined organizational context, trust will matter much more because the informal dimensions of the organization will be where the action is (Froggatt, 2001). To succeed, we will have to develop new mindsets and work habits for a radically changing world. We need to be pre- pared for almost anything and be willing to give up some of the attitudes and postures that have limited our thinking and constricted our behavior. In Future Shock, Alvin Toffler (1970) keenly observed that “never before has the future so rapidly become the past [and] we need to open our minds to more distant futures, both probable and possible” (p. 27).
The current organizational restructuring frequently seen in downsizing and the establishment of network organizations are only the starting point for the many newly reconfigured organizations preparing to launch global opera- tions. Several major corporations have delayered, outsourced, and created business-to-business supply-chain partnerships and ad hoc project teams that have emerged to address the task at hand. Jack Welch, former CEO of General Electric, coined the term “boundarylessness” to describe these new organiza- tional structures that seek to remove typical communication barriers to the traditional hierarchy. However, this term has taken on new meaning and has expanded beyond just communication barriers. Tung (1997) argues that the four essential boundaries to be spanned to achieve increased organizational speed, flexibility, integration, and innovation are “vertical (hierarchical levels), horizontal (specialization and compartmentalization), internal/external, and geographical/cultural” (p. 166). She further suggests that “specialization and compartmentalization, which were characteristic of efficient organizations in the past, will prove dysfunctional in the future” (p. 182). Moran and Riesenberger (1997) also confirm these observations when they note that this new paradigm shift “requires organizations and managers to continuously be a part of a seemingly endless adaptive process involving both functional and cross-functional expertise” (p. 14).
These transformed and reconfigured organizations still continue to strug- gle with the timeless issue of centralization versus decentralization as they seek to become global players. This is one of the most difficult dilemmas to resolve for those who hope to manage across cultures. Sullivan (1996) refers to this as “the art of being local worldwide.” Peter Schwartz (1991) notes more specifi- cally that multinational organizations must possess the ability to coordinate and control their operations while responding to local needs and maximizing organizational learning. Centralization does impose rules and procedures that might challenge local cultures, and decentralization brings issues of consis- tency and core values into question. Still, the advantages for decentralization include maximizing economies of scale, flexibly competing at a global level, and reducing transportation and communication costs for products produced locally. However, the challenges are also greater—protectionism, trade barriers, local competitors, local distribution concerns, and cultural differences. Stan Shin (1998), founder and CEO of the Acer Group, explains two productive strategies they use for directing and managing a global business. One strategy is referred to as “global brand, local touch.” It develops local shareholder majorities around the world as well as local management teams. The second strategy he labels the “fast-food business model.” Similar to a franchise, each unit of the company in every location is independent and has different share- holders. In this way, the entire company is both virtual and networked. These strategies have proven beneficial to the Acer Group as they attempt to balance centralization and decentralization and cope with the challenges of globalism. Stan Shin would quickly note, however, that each corporation must discover and design its own international business plan.
Successful global organizations need to assess their own distinctive corpo- rate postures and strategically locate themselves along the power continuum of centralization/decentralization. Peter Schwartz (1991) states that “just as power is universally less centralized, so are information and culture” (p. 94). Decentralization is easier for some organizations and cultures than others. Trompenaars and Hampden-Turner (1998) note that organizations with a clear task and high context orientation are better equipped to delegate effec- tively, resulting in specific responses. Certainly, there is no master plan and no one organizational structure that can solve all the problems. What is clear is that over-centralizing or over-decentralizing can lead to failure (Lawrence & Lorsch, 1967). Therefore, each multinational organization must locate itself on this influence scale on the basis of how best to meet its own unique global strategic vision.
Subject: The Reconfigurable Organization and Globalism 
Thu Apr 24, 2014 9:45 am
